Types of Commercial Leases
Navigating commercial leases can be tricky as there are many different types. Leasing is a great option if you are not ready to purchase a property or if you want to make passive income on a property you do own. Here in Northwest Arkansas, there are three types of commercial leases we see more than others: Gross, Modified, and Triple Net.
Gross Lease
A Gross Lease requires tenants to pay the following in a single payment: base rent plus utilities, common area maintenance, insurance, and taxes.
Triple Net Lease
Triple Net Leases (NNN) require tenant to pay base rent plus a direct payment to the respective provider for real estate taxes, insurance, and pro rata amounts for common areas and maintenance.
Modified Lease
A Modified Gross (MG) Lease is a hybrid of a Triple Net and Gross Lease. It requires the tenant to pay base rent and a direct payment for some of the agreed upon expenses such as utilities, insurance, maintenance, etc.
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