Types of Commercial Real Estate Leases | ||
Type of Lease | Rent Basis | Often Used In |
Percentage Lease | Base Rent + Percent of Monthly Sales | Retail Businesses; Malls |
Net Lease | In additional to rent, tenant pays some or all of taxes, insurance, or maintenance. | Any commercial lease; usually favors landlord’s interests. |
Double Net Lease | Tenant pays rent + taxes and insurance. | Any commercial lease; usually favors landlord’s interests. |
Triple Net Lease | Tenant pays rent + taxes, insurance, and maintenance. | Any commercial lease; usually favors landlord’s interests. |
Fully Serviced Lease (Gross Lease) | Landlord directly pays all or most usual costs. These costs are often passed on to tenant in rent as a “Load Factor.” | Office, Some industrial and retail leases. |
Chart Notes:
Load Factor is a method of calculating total monthly rent costs to a tenant that combines usable square feet and a percentage of square feet of common areas which can include restrooms, lobby, elevators, stairwells, and hallways.
Usable square feet + percentage of common area square feet = rentable square feet.