If you’re comparing commercial properties, you may come across two common lease structures: double net leases and triple net leases.
Both require the tenant to pay more than just base rent. But they don’t shift the same costs to the tenant.
The main difference is simple: under a double net lease, the tenant generally pays property taxes and insurance. Under a triple net lease, the tenant generally pays property taxes, insurance, and maintenance or operating expenses.
That extra responsibility can make a meaningful difference to your total occupancy costs and financial risk.
Double Net vs. Triple Net Lease at a Glance
Here’s the basic difference:
| Expense | Double Net Lease | Triple Net Lease |
|---|---|---|
| Base rent | Tenant | Tenant |
| Property taxes | Usually tenant | Usually tenant |
| Property insurance | Usually tenant | Usually tenant |
| Building maintenance | Usually landlord | Often tenant |
| Operating expenses | Depends on lease | Often tenant |
| Tenant’s expense exposure | Moderate | Generally higher |
These are general characteristics. Commercial leases can be negotiated differently, so the actual contract always matters more than the label.
What Is a Double Net Lease?
A double net lease, also called an NN lease, is a commercial lease where the tenant generally pays the base rent plus two additional property expenses:
- Property taxes
- Property insurance
The landlord typically remains responsible for building maintenance and repairs.
For example, imagine a commercial property with a base rent of $6,000 per month. The tenant also pays $800 per month for property taxes and $250 for insurance.
The estimated monthly cost would be:
$6,000 + $800 + $250 = $7,050
The tenant isn’t simply paying $6,000 in rent. The taxes and insurance bring the estimated occupancy cost to $7,050 per month.
However, other expenses may still apply depending on the lease.
What Is a Triple Net Lease?
A triple net lease, commonly called an NNN lease, goes one step further.
The tenant generally pays:
- Base rent
- Property taxes
- Property insurance
- Maintenance and operating expenses
The third category is what distinguishes a typical triple net lease from a double net lease.
Suppose the same property has a $6,000 monthly base rent, $800 in property taxes, and $250 in insurance. If the tenant also pays $600 per month in maintenance and operating expenses, the estimated monthly cost becomes:
$6,000 + $800 + $250 + $600 = $7,650
The difference may look small in this example, but maintenance and operating costs can vary significantly depending on the property.
The Key Difference: Maintenance and Operating Costs
The biggest difference between double and triple net leases is who pays for maintenance and operating expenses.
In a typical double net lease, the landlord generally retains responsibility for building maintenance.
In a typical triple net lease, many of those expenses are passed on to the tenant.
This could include expenses such as landscaping, common-area maintenance, repairs, and other operating costs, depending on the lease.
That doesn’t mean every NNN lease makes the tenant responsible for every possible repair.
The actual contract determines the responsibility.
This distinction is especially important when you’re dealing with an older property. A building that requires frequent repairs can create much greater expense exposure for an NNN tenant than for an NN tenant.
Double vs. Triple Net Lease Example
Imagine two otherwise similar commercial properties.
Property A uses a double net lease.
- Base rent: $7,000 per month
- Property taxes: $900
- Insurance: $300
- Maintenance: paid by landlord
Estimated tenant cost:
$7,000 + $900 + $300 = $8,200 per month
Property B uses a triple net lease.
- Base rent: $6,500 per month
- Property taxes: $900
- Insurance: $300
- Maintenance and operating expenses: $800
Estimated tenant cost:
$6,500 + $900 + $300 + $800 = $8,500 per month
The NNN property has a lower base rent, but its estimated total cost is higher.
This is why comparing commercial leases based only on advertised rent can be misleading.
Which Lease Has the Lower Base Rent?
A triple net lease may have a lower base rent because the tenant is accepting more property-related expenses.
A double net lease can also have a lower base rent than a gross lease because the tenant is paying taxes and insurance.
But you shouldn’t assume that an NNN lease will always have a lower base rent than an NN lease.
Commercial rents depend on many factors, including the property, location, market conditions, lease term, tenant, and negotiated terms.
The better comparison is the total expected cost rather than the base rent alone.
Which Lease Gives the Tenant More Expense Risk?
Generally, a triple net lease gives the tenant greater exposure to changes in property expenses.
Under a double net lease, the tenant is generally exposed to changes in property taxes and insurance.
Under a triple net lease, the tenant may also be exposed to changes in maintenance and operating expenses.
For example, if insurance premiums rise, both types of tenants may face higher costs.
If the property’s maintenance expenses suddenly increase, the NNN tenant may bear more of that increase.
This doesn’t make a triple net lease automatically worse. It simply means the tenant is accepting more responsibility.
Double Net vs. Triple Net for Tenants
For tenants, the choice often comes down to cost, control, and risk.
A double net lease may be attractive if you want the landlord to retain more responsibility for the physical property.
An NNN lease may make sense if you are comfortable taking on more operating responsibility and want a lease structure where those costs are more directly tied to the property.
Consider the condition of the building, too.
A newer property may have different maintenance needs from an older building. A tenant leasing a standalone building may face a different expense structure from one leasing space in a shopping center.
Double Net vs. Triple Net for Landlords
The difference matters to landlords as well.
With a double net lease, the landlord generally remains responsible for more property maintenance and operating costs.
With a triple net lease, more of those costs can be transferred to the tenant.
This can reduce the landlord’s direct exposure to certain expenses and may make an NNN property attractive to investors looking for a more hands-off ownership structure.
However, the landlord may still have responsibilities under an NNN lease.
Again, the contract controls.
What About Repairs and Major Replacements?
This is an area where tenants should be especially careful.
It can be tempting to think that a double net lease means the landlord pays for all repairs while a triple net lease means the tenant pays for everything.
That’s too simplistic.
The lease may distinguish between:
- Routine maintenance
- Repairs
- Major repairs
- Capital expenditures
- Replacements
- Structural components
- Building systems
For example, the lease might make the tenant responsible for routine HVAC maintenance while assigning major replacement costs to the landlord.
Another lease could allocate those costs differently.
If you’re evaluating an NNN or NN lease, don’t rely on the label. Look at the actual repair and replacement clauses.
Double vs. Triple Net Lease: Which Is Better?
Neither structure is automatically better.
The better option depends on the property and the tenant’s priorities.
A double net lease may be preferable if you want to limit your exposure to maintenance and operating expenses.
A triple net lease may be attractive if the overall economics are favorable and you’re comfortable taking on more responsibility.
The right comparison should include:
- Base rent
- Property taxes
- Insurance
- Maintenance
- Operating expenses
- Utilities
- Repair obligations
- Replacement costs
- Expense increases
- Lease term
- Renewal provisions
A lease with higher base rent could still be cheaper overall if the landlord pays most operating expenses.
Likewise, a lease with lower base rent could become more expensive once additional costs are included.
Questions to Ask Before Choosing Between an NN and NNN Lease
Before signing either type of lease, ask the landlord or property manager:
What were the property’s actual taxes and insurance costs last year?
What were the maintenance and operating expenses?
Which expenses can increase during the lease?
Who pays for major repairs?
Who pays for building-system replacements?
How are shared expenses calculated?
Are there caps on any operating expense increases?
Can you review historical expense statements?
What happens to the expenses when the lease is renewed?
These questions can help you estimate the real financial commitment rather than relying on the advertised rental rate.
Common Mistakes When Comparing NN and NNN Leases
Comparing Only Base Rent
This is one of the biggest mistakes.
A lower base rent doesn’t necessarily mean a lower total cost.
Always add the expected pass-through expenses before comparing properties.
Assuming the Lease Label Tells You Everything
“Double net” and “triple net” describe general structures.
They don’t replace the actual contract.
Read the provisions covering taxes, insurance, maintenance, repairs, and replacements.
Ignoring Future Expense Increases
Taxes, insurance, and maintenance costs can change.
If you’re signing a long-term lease, consider how rising expenses could affect your budget.
Overlooking Major Repairs
A major repair can cost much more than routine maintenance.
Find out exactly who is responsible for major building components before signing.
Treating Estimated Expenses as Fixed
An expense estimate isn’t necessarily a guarantee.
Ask how the estimate was calculated and whether historical figures are available.
Double vs. Triple Net Lease: Which One Should You Choose?
If you’re a tenant, start with the total cost rather than the lease name.
A double net lease may provide a useful middle ground. You pay property taxes and insurance but may leave more building maintenance responsibility with the landlord.
A triple net lease shifts more expenses to you. That can mean greater cost exposure, but it may also come with a different rent structure or other terms that make the arrangement worthwhile.
Look closely at the property itself.
For a well-maintained building with predictable expenses, an NNN structure may be easier to manage. For an older property with uncertain maintenance needs, the additional expense exposure may deserve more scrutiny.
If the lease represents a significant financial commitment, having a qualified commercial real estate attorney review the agreement can help you understand the obligations before you sign.
The Bottom Line
The main difference between a double net lease and a triple net lease is the third category of expenses.
A double net lease generally requires the tenant to pay property taxes and insurance in addition to base rent.
A triple net lease generally adds maintenance and operating expenses to those responsibilities.
That doesn’t mean one is always cheaper or better.
When comparing the two, calculate the full expected occupancy cost and examine who is responsible for repairs, replacements, taxes, insurance, and operating expenses.
The most useful rule is simple: don’t choose between an NN and NNN lease based on the base rent alone. Compare the complete cost and every responsibility assigned to the tenant.