Lease Types
Commercial lease types, explained in plain English.
A straight-talking guide from a firm that manages thousands of them.
A plain-English guide
Who pays for what, decoded.
Commercial leases come in more flavors than most people expect, and the structure determines who pays for what. Here's a straight-talking guide from a firm that manages thousands of them.
Lease structures
The six you’ll actually encounter
- Gross Lease
- The tenant pays one flat rent; the landlord covers property taxes, insurance, and maintenance out of that rent. Simple for tenants, more risk on the landlord if costs rise.
- Net (NN) Lease
- The tenant pays base rent plus two of the three main expenses — typically property taxes and insurance — while the landlord keeps maintenance.
- Triple Net (NNN) Lease
- The tenant pays base rent plus all three nets — taxes, insurance, and maintenance/CAM. Common for retail and standalone commercial; predictable for landlords, which is why accurate pass-through accounting matters.
- Modified Net (MNNN) Lease
- A negotiated middle ground where landlord and tenant split the nets in a custom way — flexible, but it lives or dies on clear accounting.
- Land / Ground Lease
- The tenant leases the land and typically owns or builds the improvements on it, often on a long term. Common where an owner wants to retain the dirt.
- Shopping Center Lease
- A retail-center structure that often layers in CAM charges, percentage rent tied to sales, and co-tenancy clauses — specialized terrain we navigate daily.