Single Net Lease
Contents
Unlocking the Mystery of Single Net Leases in Commercial Real Estate
Understanding the intricacies of commercial real estate leases is essential for both landlords and tenants. Among the various lease structures, single net leases stand out for their unique arrangements regarding property taxes. Let's delve into the details of single net leases, comparing them with other lease types and exploring the considerations for landlords and tenants.
Deciphering Single Net Leases
A single net lease represents a specific type of net lease agreement where the tenant assumes responsibility for paying property taxes in addition to rent. Unlike gross leases where landlords cover all property-related expenses, single net leases transfer the burden of property taxes to the tenant while the landlord retains responsibility for other operating expenses.
Navigating Lease Variations
Single net leases are part of a broader category of net leases, including double net leases and triple net leases. While single net leases involve tenants covering one operating expense (typically property taxes), double net leases and triple net leases extend to two and three operating expense categories, respectively, such as taxes, insurance, and maintenance.
Comparing Lease Structures
In contrast to gross leases commonly found in non-commercial properties, where tenants pay a fixed rent amount and landlords handle property expenses, net leases distribute financial obligations differently. Tenants in net leases share some or all of the property-related costs, providing landlords with alternative lease structures to consider.