Net lease

Glossary

A net lease requires a tenant to pay rent plus certain property expenses, often used in commercial or mixed-use multifamily settings.

Definition

A net lease is a lease where the tenant pays base rent plus some or all property expenses, such as property taxes, insurance, utilities, maintenance, or common-area maintenance. Net leases are often described as single net, double net, or triple net depending on which expenses the tenant must pay. In multifamily operations, they are less common for standard apartment homes but may apply to commercial spaces in mixed-use communities.

Example

A multifamily community has ground-floor retail below apartments. The retail tenant signs a triple net lease, paying monthly base rent plus its share of property taxes, insurance, and common-area maintenance, while apartment residents continue paying standard residential rent under separate lease terms.

Why It Matters?

Net leases matter because they change who is responsible for operating costs. For operations leaders, that affects budgeting, expense recovery, lease administration, and how property performance is reviewed against revenue and operating expenses.

‹ Net amount

Net Operating Income ›