What operating expenses remain with the tenant under a triple net lease?

In a Triple Net Lease (NNN) structure, the tenant is responsible for nearly all ongoing property-related expenses, beyond base rent. This lease format is common in industrial real estate, especially for build-to-suit (BTS) or single-tenant assets, as it transfers operational and financial risk from the landlord to the tenant.

Below are the primary categories of operating expenses that remain with the tenant under a triple net lease:

1. Property Taxes

• Responsibility:
  
  • Tenant pays 100% of applicable local, municipal, or state taxes levied on the land and structure.
    
• Includes:
  
  • Real estate taxes
    
  • Assessment charges
    
  • Any increase due to reassessment or development

2. Insurance Premiums

• Responsibility:
  
  • Tenant obtains and maintains all required insurance policies, often with the landlord named as additional insured.
    
• Typical Coverage:
  
  • Property insurance (replacement cost)
    
  • Commercial general liability
    
  • Fire and casualty insurance
    
  • Business interruption insurance (optional but common)

3. Property Maintenance and Repairs

• Responsibility:
  
  • Tenant covers all expenses for routine upkeep, repairs, and replacements of:
    
    • Roofing
      
    • HVAC systems
      
    • Electrical and plumbing
      
    • Paved surfaces, loading docks, and building interiors
      
• Scope: Includes both preventive and corrective maintenance.

4. Utilities and Service Charges

• Responsibility:
  
  • Tenant pays directly for all consumption-based utilities, such as:
    
    • Electricity
      
    • Water and sewage
      
    • Gas or fuel (if applicable)
      
    • Internet, telephone, and data services
      
• Additional Charges:
  
  • Garbage disposal, landscaping, pest control, and snow removal (if applicable)

5. Common Area Maintenance (CAM) – if in a multi-tenant park

• Responsibility:
  
  • In shared industrial parks, tenants pay pro rata CAM charges, which may include:
    
    • Internal road maintenance
      
    • Drainage systems
      
    • Security and fire hydrant upkeep
      
    • Lighting and signage