If you want to move to a triple net (NNN) lease, then you need to take extra care to find the right commercial property. Your company will commit to paying more than rental costs here, so be prepared to do some work to ensure you get the right deal. What do you need to think about before you sign an NNN lease?

1. Property Age And Condition

If you sign an NNN lease, then you cover some property costs as well as your rent. For example, you might commit to paying some or all of the building's maintenance, insurance, and property tax expenses.

The age and condition of the property can affect these costs. If you move your business into an older building that hasn't had much work done on it in recent years, then you'll probably have higher costs. You have an increased likelihood that something will go wrong with the building early in your lease agreement.

However, if you move into a new building or one that has been recently refurbished, then you reduce the chances that you will have to pay early maintenance, repair, or upgrade costs. If you prefer to move into an older building, then check its refurbishment schedule. For example, a building with a new roof is a better bet than one with roofing materials that are coming to the end of their useful life.

2. Tenant History

If you will share NNN leasing space in a building with other companies, then you'll also typically share any extra expenses. For example, if the building is home to five businesses, then any NNN expenses over and above rent will be split five ways.

If you share these costs, then you pay less overall. However, if one business leaves the building and isn't replaced quickly, then you, and the remaining tenants, have to cover the shortfall. Here, you might be liable for a quarter of maintenance, insurance, and tax costs until a fifth tenant is found.

Look for buildings with long-standing tenants who show no inclination to move. To be on the safe side, look for properties that will easily attract new tenants if a company does move on.

3. Potential Discounts

The extra financial commitment you make on a triple net lease does help reduce your costs in other ways. For example, you should get a lower monthly rental rate for the space you lease. Make sure to shop around to find the best deal, and don't be afraid to try to negotiate a rental amount that suits you.

To find out more about NNN properties and how their lease agreements work, contact commercial real estate agents, like Income Realty Advisors Inc.

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