Commercial Triple Net NNN Lease vs Gross Lease Calculator
Compare landlord effective income under Triple Net (NNN) vs Gross lease structures for commercial property. Models pass-through expenses, vacancy risk, and NOI predictability.
| NNN: Base Rent Total | — |
| NNN: Pass-Through (Tenant pays) | — |
| NNN: Landlord Effective NOI (post-vacancy) | — |
| Gross: Total Rent Total | — |
| Gross: OpEx (Landlord absorbs) | — |
| Gross: Mgmt Fee | — |
| Gross: Landlord Effective NOI (post-vacancy) | — |
| NNN vs Gross NOI Difference | — |
Under a Triple Net (NNN) lease, tenant pays base rent PLUS property tax, insurance, and CAM (common area maintenance) — landlord receives net rent free of operating risk. Under a Gross lease, tenant pays one all-in rent; landlord absorbs OpEx volatility. NNN dominates retail and freestanding commercial (Walgreens, Dollar General, FedEx). Gross is common in office and industrial. Source: ICSC, NAIOP Lease Survey 2026.
NNN vs Gross Lease Structures
Triple Net (NNN): tenant pays base rent + property tax + insurance + CAM (common area maintenance). Landlord receives 'net' rent. Common in retail single-tenant: Walgreens, Dollar General, FedEx, Starbucks freestanding. Gross/Full Service: tenant pays one rent; landlord absorbs all OpEx. Common in office buildings, urban Class A. Modified Gross splits — tenant pays utilities only.
Why NNN Cap Rates Are Lower
NNN properties trade at 50-100 bps below comparable Gross properties because landlord assumes no operating risk. A 6.5% Gross becomes 5.5% NNN for the same tenant quality. Walgreens/CVS pad sites trade at 5.0-5.75% NNN cap rates — institutional safety. Investors pay up for income predictability. The 'absolute NNN' (tenant even pays roof and structure) trades tightest.
Pass-Through Reconciliation
NNN landlords estimate annual tax+ins+CAM, charge tenant monthly 1/12, then reconcile actuals at year-end. If actual OpEx exceeds estimate, tenant gets a 'true-up bill.' If estimate exceeded actual, tenant gets refund/credit. Tenant audit rights typically allow 1-3 year lookback. Always include CAM-cap clauses limiting year-over-year increases to 5-7%.
Last updated May 2026. Sources: ICSC Lease Standards, NAIOP Industrial/Commercial Lease Survey 2026.