Short answer: a triple net (NNN) lease quotes you a base rent and then bills you separately for property taxes, building insurance, and common-area maintenance. Those extras commonly add $3–5 per square foot per year. An all-in or gross lease folds those costs into one number.
Neither is automatically better. But a $13/SF NNN quote and a $17/SF all-in quote can cost the same, and only one of them is predictable. Compare loaded numbers.
What the three Ns actually are
"Triple net" refers to three cost categories passed from landlord to tenant, on top of base rent:
1. Property taxes
Your proportional share of the building's property tax bill, usually allocated by the square footage you occupy relative to the building. This matters more in Texas than in many states: with no state income tax, property taxes carry a larger share of public funding, and assessed values in growing North Texas counties have moved substantially. A reassessment can raise your rent mid-lease without the base rate changing at all.
2. Insurance
The landlord's property and liability insurance on the building, passed through proportionally. Note this is not your business insurance. You will still carry your own general liability and contents coverage, which the lease will typically require.
3. Common-area maintenance (CAM)
The catch-all, and the least predictable. CAM typically covers parking lot upkeep and striping, landscaping, exterior lighting, shared plumbing and utilities, snow or storm cleanup, trash service, security, property management fees, and sometimes roof and structural reserves. What counts as CAM is defined by the lease, and the definitions vary more than people expect. It is worth reading that clause specifically.
The main lease types you will encounter
| Lease type | Who pays taxes, insurance, CAM | Predictability |
|---|---|---|
| Triple net (NNN) | Tenant pays all three, on top of base | Low, varies annually |
| Double net (NN) | Tenant pays taxes and insurance, landlord keeps some maintenance | Medium |
| Modified gross | Split, negotiated case by case | Medium, read carefully |
| Industrial gross | Landlord covers most, some items passed through | Medium-high |
| Full service / gross | Landlord pays all three | High, one number |
| Absolute net | Tenant pays everything, including roof and structure | Lowest, and a real risk |
Terminology is used loosely in practice. Two landlords can both say "modified gross" and mean different things. The label matters far less than the specific list of what you pay for, which is why the questions further down are the part worth memorizing.
The annual true-up
Under NNN you do not pay actual costs monthly, you pay the landlord's estimate. After the year closes, the landlord compares estimates against what was actually spent and reconciles the difference.
If the estimate was low, you receive a bill for the shortfall, sometimes months into the following year, and sometimes for thousands of dollars on a small unit. If it was high, you get a credit. In practice, underestimates are more common than overestimates, because estimates are set before costs are known and rising costs are the norm.
Two things worth negotiating if you sign NNN:
A cap on controllable CAM increases, often 3–5% per year. "Controllable" excludes taxes and insurance, which the landlord genuinely cannot control, but does cover management fees, landscaping, and similar discretionary items.
Audit rights. The ability to request documentation supporting a reconciliation. You may never use it, but having it changes how carefully the numbers get prepared.
A worked comparison
Two 2,000 SF flex units. One quoted triple net, one all-in.
| Line item | Unit A, NNN | Unit B, all-in |
|---|---|---|
| Quoted rate | $13.50/SF/yr | Quoted monthly |
| Base rent, monthly | $2,250 | — |
| Property taxes (~$2.00/SF) | +$333 | Included |
| Insurance (~$0.75/SF) | +$125 | Included |
| CAM (~$1.50/SF) | +$250 | Included |
| Water / lot maintenance | Often billed back | Included |
| Electricity + internet | Tenant | Tenant |
| Real monthly cost | ~$2,958 + utilities | $2,850 + utilities |
| Effective $/SF/yr | ~$17.75 | $17.10 |
| Year-end true-up risk | Yes | None |
Unit A advertises at $13.50 and costs about $17.75 loaded. That is a 31% gap between the headline and reality. And the reason comparing advertised rates leads people to the wrong decision.
The pass-through figures above are illustrative. Ask any landlord for their actual last two years of pass-throughs; if they cannot or will not produce them, treat that as information.
Rentable vs. usable square feet
One more place the numbers move. In multi-tenant buildings, rent is often charged on rentable square footage, which includes a share of common areas, hallways, shared restrooms, lobbies, not just the space inside your walls. The difference between rentable and usable is the load factor, commonly 10–20% in office buildings.
You can be paying for 2,200 rentable square feet while occupying 1,900 usable. Single-tenant industrial units with their own entrance and bathroom typically have little or no load factor, which is one quiet advantage of that format. Ask directly: "Is the quoted square footage rentable or usable, and what is the load factor?"
Questions to ask before signing
- "What is my total monthly payment, including every pass-through?" One number. Start here.
- "What were the actual pass-through charges for each of the last two years?" History beats estimates.
- "Is there a cap on controllable CAM increases?" If not, ask for one.
- "Which utilities are separately metered to my unit?" Pooled and reallocated utilities can be a hidden variable cost.
- "Is the square footage rentable or usable?" And what is the load factor.
- "Who is responsible for HVAC repair and replacement?" On small industrial units this is a frequent dispute and an expensive one.
- "What are the annual rent escalations?" Fixed percentage, CPI-linked, or flat.
- "What is my restoration obligation at the end of the term?" You may be required to undo improvements at your cost.
- "Is my intended use permitted?" Get it in writing in the lease, not verbally.
Why Triple C quotes all-in: our 1,950 SF units are quoted as one monthly number covering water, common-area maintenance, and lot upkeep. Tenants pay their own electric and internet, with fiber available from Frontier starting around $49 a month. There is no CAM reconciliation and no year-end true-up. That is not automatically the cheapest structure in every market, but it is the easiest to budget and to compare. See current units and pricing.
Common questions
Can I negotiate NNN charges?
You generally cannot negotiate taxes or insurance, but you can often negotiate a cap on controllable CAM, exclusions for capital expenditures, and audit rights. All three are common asks.
Does all-in rent mean I pay no utilities?
Almost never. Electricity metered to your unit is nearly always the tenant's. "All-in" typically refers to taxes, insurance, and maintenance, confirm exactly what is included.
Should I have a lawyer review a commercial lease?
For a multi-year commitment, generally yes. Commercial leases are not standardized and carry few of the tenant protections residential leases do. This guide is general information, not legal advice.