By Belinda D. Schuster, CCIM, Northwest Indiana Commercial Real Estate

Definitions for commercial leases can vary from market to market, location to location and broker to broker. When it comes to NNN net leases in the investment arena it may be worth understanding the differences.

Each type of lease has it’s own inherent risks. The characteristics of NNN leases, NN leases and Bond Leases have a specific risk profile, debt and equity structure and impact on property valuation. The following definitions are based on industry publications, and my experience, to help you understand the differences.

NNN Bond Lease (Absolute)

NNN Lease

NN Lease or Double Net

By understanding basic risks, operating expense responsibilities, the financial impact, and liabilities in a commercial lease will aid in negotiating terms. When analyzing commercial leases always advise your clients to seek legal and financial counsel.

Leave a Reply

Your email address will not be published. Required fields are marked *