NNN stands for Triple Net. With this type of lease a tenant will pay for rent and three additional costs associated to the property. (1) the proportional property taxes, (2) the proportional property insurance and (3) proportional common area maintenance charges.
On the other end of the spectrum, some property owners/mangers offer Gross Leases which typically include all of these costs (and sometimes more, like utilities). Any variation between a Triple Net lease and a Gross lease is called a Modified Gross lease.
The rent should reflect the type of lease. For example, the rent charged in a Gross lease should be higher than the rent charged in a NNN lease (for a comparable space, in the same market) since the Gross lease offers more.
*Submitted by: Chuck Maloy, Coldwell Banker Commercial Pinnacle, Rochester, NY
Apr 14, 2014