What is the difference between ground lease and triple net (NNN) lease?

In Leasing Property - Asked by Tony K. - Dec 15, 2014
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Answer(s)

Todd M.
Owner/Investor
Huntington, NY

Ground lease
A "ground lease" is another variation of a net lease. Under a ground lease, the landowner leases the land to the lessee which gives the lessee the opportunity to construct a building. The lessee will then have a leasehold interest in the property. Under a ground lease the tenant will typically pay for the same items they pay for under a Triple Net Lease or Bondable Lease. Generally, ownership of the building will revert to the landowner at conclusion of the lease
Triple net lease - NNN Lease
A triple net lease (Net-Net-Net or NNN) is a lease agreement on a property where the tenant or lessee agrees to pay all real estate taxes, building insurance, and maintenance (the three "Nets") on the property in addition to any normal fees that are expected under the agreement (rent, utilities, etc.). In such a lease, the tenant or lessee is responsible for all costs associated with the repair and maintenance of any common area.
This form of lease is most frequently used for commercial freestanding buildings. However, it has also been used in single-family residential rental real estate properties.
Hope this clarifies - Todd McIndoo, Commercial Team, Daniel Gale Sotheby's International

Dec 16, 2014
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Jient L.
Tarzana, CA

Ground Lease is you have to lease the ground on which the Building sits; and, Triple Net Lease is you have to pay for all if not most the expenses the Building owner incur besides the Rent you pay.

Dec 16, 2014
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Jason Y.
Broker/Agent
Phoenix, AZ

Ground Lease: You leasing only the ground after lease expires anything on that ground belongs to owner usually ground leases are 20-99 year leases, it keeps cost down and its 100% tax write off.
Triple NET: lease requires the lessee to pay for NET real estate taxes on the leased asset, NET building insurance and
NET common area maintenance

Dec 24, 2014
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