Whether you’re a new renter or simply new to the world of real estate, you’ve likely come across a plethora of confusing acronyms and terms — “NNN” being one of them.
What does “NNN” mean, you ask? We’ll tell you.
Read on as we explore “NNN” to uncover its definition, usage, and more.
What Is the Definition of NNN?
According to the Collins Dictionary, NNN — aka “triple net,” “NNN lease,” or “triple net lease” — refers to a rental type in which the tenant pays monthly rent to the landlord and assumes all costs regarding the operation taxes (such as the real estate taxes), building insurance, and maintenance of the property.
Simply put, NNN means “net, net, net” and describes lease agreements that are net of property taxes, insurance premiums, and maintenance expenses for the landlord. In other words, renters (aka tenants) are required to pay all of these expenses.
Overall, this is considered to be a simple and turnkey investment. Why? Because the landlord — or owner of the property — isn’t responsible for the property taxes, insurance, or operating expenses.
That said, it’s important to note that there are many different types of commercial real estate leases out there, including the single net lease.
What Benefits Do Triple Net Leases Provide?
In addition to the landlord not being responsible for property taxes, insurance, or operating expenses, other benefits of triple net leases include:
- Investment stability
- Hands-off approach for investors (reduced landlord duties)
- Attracts dependable, long-term renters
- Tax benefits
What Is the Single Net Lease?
Single net leases — aka “net lease” or “N” lease — are not as common as NNN in the rental world, but they are still used from time to time. In short, a net lease refers to a commercial real estate agreement in which the tenant agrees to pay rent in addition to property taxes.
This leaves the landlord with the cost of any other expenses, such as maintenance, repairs, insurance premiums, and utilities.
What Is the Double Net Lease?
Unlike a single net lease, a double net lease — aka “net-net” or “NN” — is quite popular in the realm of commercial real estate. Simply put, an NN is a rental agreement where the tenant agrees to cover the costs of two of the three main property expenses: taxes, insurance premiums, or utilities.
The maintenance costs, on the other hand, remain the sole responsibility of the landlord.
Related Words You Should Know
As you continue on your journey towards understanding the meaning of NNN, you’ll likely come across several puzzling words that may bring about confusion if you’re unsure of their meaning.
Not to worry — here is a short list of related terms for you to review below:
- Operating Expenses — The costs associated with operating and maintaining a commercial property such as retail space, warehouse, office space, or office building.
- Base Rent — The set rental rate a tenant will pay the landlord before any additional operating expenses or revenue percentages each month.
- Gross Rent — Base rent + operating expenses = gross rent
- Tenant Improvement Allowance — A type of incentive landlords offer to encourage tenants to sign a lease.
- Free Rent — A type of incentive that landlords sometimes offer on long-term leases.
- Percentage — The tenant agrees to pay a base rent and operating expenses, in addition to a variable monthly cost related to the tenant’s monthly revenue.
- Gross Lease — A commercial lease where the tenant pays a flat rental amount that encompasses rent and all costs associated with ownership.
- Common Area Maintenance (CAM) — One of the net charges billed to tenants in a commercial NNN lease and are paid by tenants to the landlord of a commercial property.
- Lease Rate — An amount paid by the tenant to the landlord for use of an asset for a set period of time (generally expressed as dollars per month.
- Modified Gross Lease — A type of lease that usually requires the tenant to cover a portion (or sometimes all) of the expenses after a term.
- Absolute NNN Lease — A type of lease that absolves the landlord of all responsibility for the building in all scenarios, leaving the tenant required to cover all expenses, including repairs to the building’s roof, parking lot maintenance, and other types of upkeep.
Does NNN Stand For Anything Else?
In addition to triple net, the acronym NNN can also stand for the following words:
- Nippon News Network (Japan)
- New Nordic Norm (Skiing)
- No New News
- Newspaper National Network LP
- Non-Nuclear Nation
- Natural News Network (Online magazine in Rhode Island)
- Novy-MacNeal-Nicolle (Culture medium)
- Notes Named Network (Domino)
- Net News Now
- Next Navy Network
- No Nut November (Internet slang)
- Normal No Noobs (Gaming community)
The abbreviation NNN can stand for a number of words, including “No New News” and “Non-Nuclear Nation.” More often than not, NNN refers to “triple net,” which is a method of computing real estate costs among commercial rental properties.
In short, NNN expenses usually include property taxes, insurance premiums, and maintenance expenses. The net-net-net fees are added to the base rental fee, which is usually calculated as a dollar-per-square-foot number.
Now that you understand all there is to know about triple net leases (aka NNN), we invite you to check out our website, where you can learn about more interesting terms.
Whether you’re looking for information on various real estate terms, slang words, or complex phrases and expressions, you can always count on The Word Counter to have your back when it comes to grammar.
Check us out to start enhancing your existing vocabulary today!
Definition of Triple Net | New Word Suggestion | Collins Dictionary
triple net lease | Wex | US Law | LII / Legal Information Institute
NNN – What does NNN stand for? | The Free Dictionary
net lease | Wex | US Law | LII / Legal Information Institute