what is the difference in Industrial Gross and any other type of Gross Lease ?

In Leasing Property - Asked by Sandy V. - May 12, 2011
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Answer(s)

Chris R.
Broker/Agent
Denton, TX

Gross lease: A property lease in which the tenant pays the base rent and the landlord agrees to pay all expenses which are normally associated with ownership, such as utilities, repairs, insurance, and (sometimes) taxes.
Modified Gross lease would be where the above is modified to whatever extent the 2 parties to the lease can agree upon.
Industrial Gross Lease: An industrial gross lease means that the tenant pays rent plus a share of services. Taxes and insurance are included in the base rent; however, at the end of the year any increases in taxes and insurance are passed on to the tenant as additional rent. If someone is confusing a gross lease for a fully serviced lease when in fact it is an industrial gross lease, that tenant may be looking at 20-25% added costs in paying for services assumed to be included in rent.
So the primary difference between typical Gross Lease and Industrial Gross Lease is that a typical Gross Lease calls for Tenant to pay base rent and Landlord to pay most all other costs as indicated whereas a typical Industrial Gross Lease calls for Tenant to pay base rent and Landlord to pay most all other costs as identified but where the Tenant may be expected to cover any increases in specified costs such as taxes, maintenance, insurance and/or utilities over the initial year of the lease.

May 12, 2011
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JOHN R.
Broker/Agent
Tampa, FL

A GROSS LEASE, THE LANDLORD PAYS THE RE TAXES, INSURANCE, MAINTENANCE. A TRIPLE NET LEASE, THE TENANT PAYS THE RE TAXES, INSURANCE, MAINTENANCE. JOHN REAVES

May 13, 2011
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Michael E.
Broker/Agent
Houston, TX

A gross lease is where the tenant pays rent that will include the taxes, insurance, and common area maintenance. You will see other forms of gross leases (aka modified gross). A modified gross lease is where the tenant will pay the rent in addition to some of the taxes, insurance, and/or maintenance. You will have to read the lease to know exactly what is in addition to the rent.
A triple net, net, or NNN lease (all the same) is where the tenant will pay a base rent in addition to the taxes, insurance, and CAM (common area maintenance).
Tenants tend to prefer gross leases and landlords tend to prefer NNN leases.

May 13, 2011
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Theodore B.
Broker/Agent
Houston, TX

Great Question. Since there is no standard I believe it is important to read and understand the terms of each lease individually because every lease is different.

May 24, 2011
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