Compare gross, modified gross, and NNN lease structures side by side. See actual occupancy cost for each type to pick the best commercial lease.
Commercial leases come in several structures, each with different cost implications. A gross (full service) lease includes all operating expenses in the quoted rent. A NNN (triple net) lease quotes a lower base rent but passes taxes, insurance, and CAM to the tenant. A modified gross lease falls in between, including some but not all expenses.
Comparing these directly is essential because a $30/sq ft gross lease may actually be cheaper than a $20/sq ft NNN lease once you add $12/sq ft in NNN charges. This calculator standardizes the comparison by computing the total all-in cost for each lease type.
Understanding these structures is critical for tenants negotiating office, retail, or industrial leases. The "cheapest" advertised rate is meaningless without knowing what's included.
Homebuyers, investors, and real-estate professionals all benefit from precise commercial lease type comparison figures when evaluating properties, negotiating deals, or planning long-term investment strategies. Save this calculator and revisit it whenever market conditions or your financial situation changes.
Different lease types make apples-to-apples comparison impossible without a calculator. This tool normalizes all structures to a single all-in cost per square foot, revealing the true winner. Instant recalculation lets you compare scenarios side by side, so every buying, selling, or investment decision is grounded in solid financial analysis. No sign-up is required, and you can instantly re-run scenarios as interest rates, property values, or your financial goals evolve. No sign-up is required, and you can instantly re-run scenarios as interest rates, property values, or your financial goals evolve.
Gross Total = Gross Rate × Square Footage NNN Total = (NNN Base + Tax + Insurance + CAM) × Square Footage Modified Gross Total = (MG Rate + Tenant Expenses) × Square Footage
Result: Gross: $96K | NNN: $93K | Mod Gross: $90K — best deal
For 3,000 sq ft: Gross at $32 = $96,000/yr. NNN at $20 + $11 charges = $31 total = $93,000/yr. Modified gross at $27 + $3 expenses = $30 total = $90,000/yr. The modified gross lease saves $6,000/yr versus gross.
Gross leases dominate Class A office markets. NNN leases dominate retail and industrial. Modified gross is common in suburban office parks and mixed-use buildings. Each has its place, and the "best" type depends on your industry, cash flow predictability needs, and negotiation leverage.
Gross leases include a risk premium. Landlords price in expected expense increases plus a buffer. Over a 5-year term, a NNN lease may save 5–15% total compared to gross because you pay actual expenses rather than the landlord's inflated estimates.
Over a 10-year lease, NNN expense growth (3–5%/year) can significantly increase your occupancy cost. A $12/sq ft NNN cost in year 1 could reach $16–$19/sq ft by year 10. Gross leases with fixed escalations (2–3%/year) provide better long-term predictability.
A gross lease includes property taxes, insurance, and maintenance in the quoted rent. The tenant pays one predictable amount. The landlord assumes the risk of operating expense increases. Common in office buildings.
A modified gross lease includes some operating expenses in the base rent (often taxes and insurance) but passes others to the tenant (often CAM or utilities). It's a compromise between gross and NNN, common in multi-tenant office buildings.
It depends on your risk tolerance. Gross leases provide budget certainty. NNN leases often have the lowest total cost but expose you to expense fluctuations. Modified gross is a middle ground. Compare the all-in cost for your specific situation.
Sometimes. In a tenant's market, you may be able to convert a NNN proposal to gross at a reasonable premium. Landlords may also offer modified gross structures with expense stops to limit your exposure.
In a gross lease with a base year stop, the landlord includes operating expenses at the base year level but passes through any increases in subsequent years. This hybrid structure is common in multi-year office leases.
A percentage lease, common in retail, charges base rent plus a percentage of the tenant's gross sales above a breakpoint. This aligns the landlord's income with the tenant's success and is most common in shopping centers.