The NNN is whatever the expenses are: property/casualty insurance, property taxes, maintenance, trash collection, water/sewer, etc. -- whatever expenses are paid by the landlord, allocated to each leased space by its percentage of total rented square feet. This will include maintenance of the actual space rented, plus a percentage of maintenance of the common areas (lobby, parking area, restrooms outside the rented area, elevators, etc). If utilities are paid by the landlord, then they are allocated to each tenant; if tenants pay the utilities for their space directly (because they are separately metered), then those utilities are not part of the NNN fee. You can check with a local licensed commercial broker who specializes in the type of property you are leasing. S/he can tell you the average cost per sq foot that is being charged on NNN for the type and class of building in that submarket. Tenants, if their leases are drawn correctly (and you should require this as a tenant), have the right to audit the landlord's expense claims and tax records for the property. It's amazing what bogus "expenses" landlords will tack on to a property -- boats, family automobiles, vacation homes.
Dec 11, 2009