The following chart can be used to help you identify the type of commercial lease you are being offered. Remember that types of commercial leases can overlap. What is most important to focus on is how rent and other fees are calculated.
Related Articles:
- Average Percentage Rents Charged in Commercial Leases
- Leasing Commercial Office, Retail and Industrial Spaces
- Subleasing Commercial Spaces
Chart 1
| 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.
