When leasing property remember, there are a myriad of lease types and terms. One Broker may call a lease where the tenant pays “base rent” and his portion of all the operating expenses, a “triple net” lease while another calls it a “net lease”. Class A office leases usually include all operating expenses and utilities and is referred to as a “full-service lease”, however it is also sometimes called a “gross” lease. A “modified gross” lease could have the tenant paying some operating expenses in addition to base rent, like utilities. However, they might be required to pay for cleaning or real estate taxes. An “absolute net” lease is also referred to as a “bond type” lease because the tenant is responsible for all property expenses including the building structure, so it’s like buying a bond to an investor. But I’ve heard it called a “pure net” lease. This is commonly used when a developer is erecting a building to a tenant’s specifications. The point to remember is, you need to ask what’s included in the rent and what isn’t. I’ve been in this business for 30 years and I still ask; “what are the nets” or, who pays utilities and operating expenses?” If you don’t, you may get some unexpected charges.
Different Lease Terms
