Triple Net Lease (NNN) Calculator

A triple net (NNN) lease requires the tenant to pay base rent plus all three "nets": property taxes, building insurance, and Common Area Maintenance (CAM) charges.

A Single Net (N) lease passes only property taxes to the tenant. A Double Net (NN) passes taxes and insurance. A Triple Net (NNN) passes taxes, insurance, and CAM expenses.

CAM (Common Area Maintenance) charges are the fees billed to tenants for the upkeep of shared spaces, including parking lot maintenance, landscaping, snow removal, and exterior lighting.

Divide the total annual property taxes, insurance, and CAM expenses by the building's total rentable square footage. Multiply this per-square-foot rate by your specific leased square footage to determine your pro-rata share.

A CAM reconciliation is the annual audit where landlords compare the estimated CAM charges billed to tenants throughout the year against the actual expenses incurred. Tenants either receive a credit or are billed for the shortfall.

Institutional landlords use accounting software like Yardi to automatically track pro-rata expense pools, enforce base year stops, and generate tenant reconciliation statements to avoid manual calculation errors.

Investors utilize 1031 exchanges to defer capital gains taxes. Absolute NNN properties with long-term, corporate-guaranteed tenants are favored because they offer passive income with zero landlord responsibilities.

Evaluating NNN deals requires analyzing the tenant's corporate credit rating, the length of the remaining lease term, periodic rent escalations, and the underlying real estate fundamentals.

While industrial and retail properties strictly use NNN, office spaces frequently use a Modified Gross lease with a "Base Year Expense Stop," though institutional offices may pass through expenses similarly to a NNN structure.

In a standard NNN lease, the landlord may still be liable for "roof and structure" repairs. In an Absolute Net lease, the tenant assumes 100% of all financial obligations, including structural replacements.

Yes. Commercial tenants often negotiate "CAM caps" (limiting annual increases to 3-5%) or exclude capital expenditures (like replacing a roof) from operating expense pools.

Your pro-rata share is the percentage of the building you occupy. If you lease 2,500 square feet in a 10,000 square foot building, your pro-rata share of taxes, insurance, and CAM is exactly 25%.