Ricky.... I will take a stab at answering your question, "What is NNN add up cost to the (lease), eg: $23 sf year"?
I believe you are either asking what are the components that make up a $23 sf per year, triple-net cost? Or, you are asking simply, "What is this"?
Your NNN charges: property taxes = N1; property insurance = N2; and, common area maintenance = N3 comprise the three parts of NNN. In a triple net lease, you pay a base rent, plus your proportionate share of the building's operating costs. This extra charge is usually estimated and collected on an annual basis, with a reconciliation at the beginning of each new year for the year just ended. A new monthly collected amount is then provided based on the new year's budget.
For the other side of this answer, the example of $23 sf year would be separated with the three components making up the full $23 sf year. Let's say that you have 1,000 sf in a 10,000 sf building. You may in this situation be responsible for 10% of the NNN charges. Your total annual charge for NNN would then 10% of $23,000 or $191.67 per month. This then would be an add-on to your base rent of $.192 each month.
If this example runs true, I believe nineteen cents per month is quite reasonable for NNN. However, You should ask your prospective landlord to provide you with a full actual operating result for the previous year's NNN and the current year’s budget before signing a lease. This could be done after you have submitted the LOI and during the due diligence period prior to going hard with any deposit funds. You should also be sure that your lease shows you paying only your proportionate percentage share of the properties NNN and that the lease lists the full extra collected charge you will be making on a monthly basis to NNN. Good luck Ricky…. Rob Baird, CA RE License #544165 (One of the oldest, active licenses in CA) 951 515-5855 Email: firstname.lastname@example.org
Mar 4, 2011