The Auto Parts Segment as a Net Leased Investment Strategy

At this point in the economic cycle it’s good to look for more recession proof businesses as your tenant in a net lease investment. Specifically, with regards to the auto parts segment, the last recession took a huge bite out of new car sales and the next one will do the same.

Typically, the economic cycles run 12 -14 years peak to peak and trough to trough so we’re about due for another downturn. I don’t think the next one will be anywhere close to the viciousness of the last mostly because credit markets have been restrained throughout this recovery.

High unemployment and stringent credit markets decimated new car sales during the recession. As a result, the average vehicle age increased year after year. Older vehicles need parts replaced, and with limited income most car owners are forced to buy the part and replace it themselves.

There are four major and one smaller players in the segment. First is Advance Auto, founded in 1929. Second is Auto Zone.  Third is NAPA, founded in 1928.  Fourth is O’Reilly’s, founded in 1957.  And the fifth slightly smaller player is Pep Boys.

The players in this segment of triple net retail investments have targeted a more low to middle income, working class, blue collar type areas and neighborhoods. Also population growth will increase the number of cars on the road and continue to drive demand for auto parts

Net lease assets such as these fill a highly desired price range, generally trading between $1.0M – $2.0M. Additionally, the typical big four Auto parts store lends itself to a wide array of reuses in the unlikely event of a vacancy as these are a big rectangular box on one to two acres of land. Pep Boys tend to be even larger and with service bays which allows so advantages concerning depreciation with cost segregation.

Whether it is a Columbus Ohio triple net retail opportunity, Santa Monica triple net retail or anywhere in between, It’s time once again to take a serious look at this segment.

For triple net retail, nnn, net lease commercial real estate for sale for 1031 exchange or purchase

If you’re in a 1031, these are relatively easy to locate on short notice (within the 1031 exchange 45 day identification period). If you’re interested in pursuing this segment as a NNN net lease buying opportunity, I would be happy to help.  Contact Scott Harris Realtor at 614-905-6614

New Mega Development for Los Angeles In South LA

It wouldn’t be a new day without another announcement of a large new mixed use project in Los Angeles, and this project won approval already from the City of Los Angeles Planning Commission. This one is a little different given that it’s slated for South LA, just south of the 10 bordered by Washington Blvd on the north, 21st on the south, Main on the east, and Hill St on the west. South Broadway runs through the middle of the project.

The project, West Block and East Block, will encompass two full city blocks that are now mostly surface parking lots.

The West Block will keep the existing structure named the Reef, which is a 12 story building that serves as a creative space for artists and entrepreneurs. Next to it will be a new 20 story hotel with 208 rooms with typical amenities.  Also a nine story structure with 100 apartments will be built.  The West Block will have a public paseo named “The Exchange” running between Broadway and Hill with triple net Los Angeles restaurants and net lease retail space for lease.

The East Block will feature two medium rise structures with a 32 story building with 428 condos and 14 live / work spaces. The taller of the two buildings, a 35 story tower, will feature 453 apartments.  The block will also have a paseo named “The Strand” stretching from Main to Hill.

Net lease Los Angeles retail shop space for lease plus cafe and restaurant space will line Broadway, Washington, Hill and 21st.

It’s just one more amazing project for the City of Los Angeles with plenty of retail and restaurant space for lease to keep local Los Angeles commercial real estate agencies happy. So potential tenants or buyers, if you’re interested in Los Angeles commercial property for sale or lease, give me a call, Scott Harris Realtor, 310-473-4789 and we’ll see what we can do.

Los Angeles Exposition Park Mixed User – Retail Hotel and Apartments

I think I’ve started hundreds of posts with ‘large Los Angeles retail mixed use’ because I probably have. Well, here’s another one.

Across the street from the future Exposition Park soccer stadium will be a new mixed use complex named the Fig, that will include 55,000 square feet of triple net Los Angeles retail and restaurant space, 20,000 square feet of incubator / accelerator / co work space. Also planned will be a 21 story hotel and two seven story structures, one with 222 student apartments and the other with 186 mixed income apartments. 82 of the units will be moderate income.

The 21 story hotel would include 298 rooms. I haven’t heard anything yet on branding.

Developer, Spectrum Group Real Estate plans to tear down eight multiunit residential buildings on the 4 1/2 acre site.

This will be a great addition to the south side of the USC campus in Los Angeles and the newly available net lease retail / restaurant space with make Los Angeles commercial real estate agents very happy.

It’s probably a little early for lease up, but if you’re interested, feel free to contact me, Scott Harris Realtor at 310-473-4789, and I’ll see what i can do.

Los Angeles Commercial Properties for Sale or Lease

Pacific Palisades’ New Retail and Office Grove Ready To Groove

New Retail and Office Grove

Rick Caruso, developer of the Grove and Americana at Brand received final approval yesterday from Los Angeles City Council to start immediately on the rebirth of downtown Pacific Palisades to be named Palisades Village. And what I mean by immediately is that they’re starting on relocating storm drains on the 27th of this month, June 2016.

There’s no question that the retail restaurant section of downtown Pacific Palisades is looking pretty bad so according to the Palisades News support is running about 9 to 1 in favor.  Generally NIMBYs are automatically opposed to something this.  No question that the current Pacific Palisades has lost its mid century charm and need a reboot and refresh.

The Project with Sunset on the south and then Monument, Albright and Via de La Paz on the east north and west will encompass three acres.

Included will be eight new buildings and a park, net leased retail, restaurants, offices, community room, specialty grocery, bank, plus restoration of the Bay Theater. There will be three levels of underground parking with 560 spaces.

This is a hugely useful and needed project and I expect a great result given who is the developer. If you’re a retailer or restaurateur and interested in triple net retail or restaurant space, give me a call, Scott Harris Realtor at 310-473-4789

New Los Angeles Rams Stadium Spurring Major New Los Angeles Triple Net Retail and Residential Development

New Los Angeles Triple Net Retail and Residential Development

The new Rams stadium at Hollywood Park in Inglewood is stimulating massive new development such as 3,000 new residential units and 620,000 square feet of new nnn retail and net leased Los Angeles restaurant space.

Talk about a way to keep Los Angeles commercial real estate agents happy! It’s nice to have addition new net leased retail and restaurant space available.

The Los Angeles area hasn’t had a NFL team for 20 years, but the new Rams arena is isn’t all that’s happening at the old Hollywood Park site. The residential and retail component of the development has been in the planning stages for over a decade.  Like most projects, it was delayed by the great recession due to the lack of construction financing.

The 238 acre Hollywood Park site was acquired by developers Wilson Meany and Stockridge back in 2005, but construction didn’t begin until 2014. The Rams arena is the newest addition to the project.  The project is expected to be completed in 2023 with a possible Super Bowl in 2020.

The development and arena will be mighty cool when flying into LA at night if you’re on one of those 1,500 flight coming into LAX daily, especially the giant billboard on top of the arena. The developers are doing everything they can to see that this will be a very special welcome into Los Angeles.

It’s likely a little early to be looking for Los Angeles net lease restaurant or retail space in the development, but if you’re interested, I’ll do what I can to get the process moving. Call me, Scott Harris Realtor, 310-473-4789 for more information.

Commercial Real Estate Agent – Santa Monica, California

What’s Going to Happen to the Old Ikea Retail Site in Burbank

Big plans are underway for the old site now that the new 458,000 Square feet Ikea retail store is under construction. The new store will be the largest in the United States.  They will leave the old site at the net lease retail site at Burbank Town Center at about this time in 2017. So what’s underway for the old site?

Developer, Crown Realty and Development and CAPREF LLC have big plans:  .  The plans are to add 765 apartments at 600 N San Fernando Blvd. and 70 condos for sale at 800 N San Fernando Blvd to the Burbank net lease retail center.  The center will also feature an open air plaza and 40,000 square feet of net retail space for lease for fresh retail tenants and maybe a farmer’s market.

No new Burbank residential multiunit housing has been permitted or built in the last 15 years, which added to the housing availability crisis. Not that it’s not the same all over Southern California.  I’ll wager that all of these new apartment and condo units will be sold or rented long before the construction is complete.

Looks like another solid project and we sure need the housing and new Burbank triple net retail space. The new net leased reatil space will sure make Los Angeles commercial real estate agents and brokers happy.

We’re still a ways off, but if you’re looking for nnn retail or restaurant space for lease, I’ll do my best to help.  Contact me, Scott Harris Realtor at 310-473-4789

Gallery Approval of Ohio State University Retail and Residential Development at 16th and High

The first major segment of the long awaited renewal of the east side of High Street across from the OSU main campus entrance received approval from the University Area Review Board. The new development encompass the entire block bordered by 16th on the south and 17th on the north with Pearl Street on the east and will require the demolition of eight existing buildings. The building that housed the former Bernie’s Bagels & Deli and Johnny Go’s House of Music (The Wellington Building) will be one of them. The Sigma Nu building at 22 East 16th is another.

The much revised plan got unanimous approval of the University Area Review Board and board members were satisfied with the architectural changes made over many months of meetings.

The redeveloped block will include 50,000 square feet of net lease retail and restaurant space, which will make potential tenants who have been looking for space for years and Columbus commercial real estate agents very happy. We’ve had virtually nothing new come on the market for years in the OSU retail and restaurant areas.

There will be 164 new apartments with a total of 448 new beds and a 171 space parking garage.

There will be existing tenants who will want to relocate into the new building so no one is certain at this time how much truly new space will be available for additional new net lease retail and restaurant tenants. I’m staying closely in touch with all involved so if you have interest, give me, Scott Harris Realtor a call at 614-905-6614.

I expect the process to be quite competitive so it’s best to start early. Occupancy will be the start of fall semester 2018 so you have plenty of time to prepare, but the triple net retail and restaurant spaces will long be leased up. So again, start now.Columbus OSU retail restaurant development

Santa Monica Mixed Use NNN Triple Net Retail and Apartments Approved

Santa Monica Triple Net Retail Restaurant

Santa Monica California Planning Commission voted 6 – 1 to recommend that the full city council approve this seven story 249 market rate apartment with ground floor triple net retail restaurant complex at 5th and Broadway on the old Fred Segal property.

This is sure to upset the fierce Santa Monica commercial real estate NIMBYs who want anything over 32′ in height to go to a public vote so the 6 – 1 vote from the planning commission is quite a surprise. That being said, it hasn’t passed the full city council yet. However, a 6-1 vote from the planning commission is a real good indication that it will.

I think the two factors that helped with the Santa Monica commercial real estate vote was the proximity to the soon to open Santa Monica Expo Line station and the agreement to provide 64 offsite affordable housing units at 1626 Lincoln.

The new complex, 500 Broadway, will include 68,000 square feet of nnn triple net leased retail and restaurant space and the possibility of a grocery store, 249 market rate apartments and an underground parking garage with 524 spaces.

Architects are Koning Eizenberg.

The project is still a ways off, but if you want to get in line for some of the 68,000 square feet of net nnn leased retail space for lease in Santa Monica or restaurant space, I would be happy to help. Contact me, Scott Harris Realtor, at 310-473-4789.

NNN Net Leased Retail Restaurant and Green Space For Glendale California 134 Freeway Cap

The Glendale California Community Development Department has released new detail website regarding its plans to build 24 acres of park land on top of the trenched section of the 134 through downtown Glendale.

The new ¾ mile freeway cap, estimated to cost $150 million, will stretch from downtown from Central to Balboa. The segment of the park between Central to Louise Street will serve downtown Glendale and provide a venue for outdoor concerts, farmers’ markets, and new nnn net leased space for restaurants.

East of Louise it will be a neighborhood park with a focus on recreational facilities, community garden, dog park, children’s play area.

The cap will also reunite long divided parts of the city that have been divided since the 134 was built 40 years ago.

This will be a long time coming as construction is not expected to begin until 2020. The City of Glendale California will be funding the project with the help of public and philanthropic resources. It will be a couple of years before lease up of the nnn triple net retail or restaurant lease spaces begins.

1031 Exchanges – The Four Basic Rules

1031 Exchanges

Given the glut of triple net retail, single tenant, S&P BBB rated or higher, replacement properties that have come on market over the last couple of weeks, we have plenty of net leased Walmarts, Walgreens, CVSs, 7-11s, etc. available, and at decent cap rates with long 10+ year leases.

These are as perfect a 1031 replacement (upleg) property as we find so I thought it might be a good time to go over the four primary 1031 rules.

  • Rule # 1 Both the relinquished property and replacement property must be held for investment purposes or used in a business and be ‘like kind’.
  • Rule # 2 The IRS requires the investor to identify the replacement property or properties within the 45 ‘identification period’. The identification period begins the day of closing of the relinquished property. The replacement properties must be properly identified by the Exchanger.

There are two more identification rules under Rule #2. The exchanger may identify up to three replacement properties regardless of market value (Three Property Rule). Or they may identify unlimited number of properties provided that the total value not exceed 200% of the relinquished property (200% Rule). The minimum requirement is 95% of the value of the relinquished property

  • Rule #3 You must close on the replacement property the earliest of within 180 days of the closing of the relinquished property or the due date of the tax return or file an extension. And this is 180 calendar days … no time off for weekends or holidays.
  • Rule #4 On a delayed exchange, you must work with an IRS approved Qualified Intermediary.

For more detail regarding a 1031 exchange replacement properties, or referral to a Qualified Intermediary, contact me, Scott Harris, 310.473.4789 or 614.905.6614

Searching For a Single Tenant, Triple Net Retail, Credit Tenant 1031 Upleg?

There is a real bumper crop of new opportunities on the market right now for net leased retail 1031 uplegs. These are all new opportunities that have come on market in the last week.

It’s not unusual to see many triple net retail single tenant properties come on the market at this time of the year, but this year it’s unusually strong. Plus, it’s very high quality net lease properties as we’re talking Walmart, Walgreens, CVS, all credit tenants, S&P BBB or above.

Are you in your 45 day identification period? Have you closed your down leg yet?  If you have a 1031 downleg about to close and you need a replacement property, now is a great time.

If you have any questions, you can reach me, Scott Harris, at 310-473-4789 or 614-905-6614

Los Angeles Convention Center to Get Redesign of the Redesign.

Los Angeles retail restaurant for leaseThe current Los Angeles Convention Center. although not that old compared to many in the country, is badly out of date. The convention business is big money and very competitive.

Plans to update the current convention center never seemed to work out in the past. The latest was an plan for LA Live developer, AEG, to do a massive remodel and expansion as part of the NFL stadium that was to built nearby.  When that failed, Los Angeles decided to hold a design competition to do it themselves.  They selected a design team headed by HMC Architects and Populous.  LA also approved a $470 Million bond funding plan.

Now they’re considering shelving that plan and going much bigger through a public / private partnership. The City of Los Angeles will hand over the project to a well qualified private developer to finish it off.

This will breed more Los Angeles downtown net lease retail and restaurant development. That’s where we Los Angeles commercial real estate agents and brokers come in.  It also means even more hotels and high rise multi unit development as if LA doesn’t have plenty of that in the pipeline already.

Los Angeles has turned into one great development after another. This is exciting stuff.

Los Angeles Ram’s New Stadium YouTube Fly through

On the LA Rams YouTube page is a video fly through of the new NFL stadium that I thought might be of interest to a few of my readers.

The new $2.5 billion stadium is supposedly the most expensive in the world. It features a see through roof and seats for over 70,000 plus standing room only for 100,000.

It will be another couple of years before the stadium is complete so the video will have to do for now. Stadium was scheduled for completion in 2018, but due to El Nino they are considering delaying construction until May or June of 2016, delaying completion until 2019.

A big benefit, in addition to the first NFL team in LA in a very long time, will be a major increase in commercial development in the area, from new single family residential to condos and apartments, and of course new Los Angeles triple net retail and restaurant space for lease.

It’s a little too early to start thinking about lease-up for retail or restaurant space at the stadium, but if there’s is anything else I can help you with near the future stadium, call me, Scott Harris Realtor at 310-473-4789.

New Tax News for 2016 Regarding FIRPTA

FIRPTA increases from 10% to 15%.

Currently if a foreign person sells United States real estate the buyer is required to withhold 10% of the gross sales price and remit this to the IRS. However pursuant to the Protecting Americans from Tax Hikes Act of 2015 closings as of February 16, 2016 the FIRPTA will increase in most instances from 10 to 15%.

Congress created FIRPTA based on reports that foreign investors were purchasing U.S. real estate and then selling it at a profit without paying any U.S. taxes. Consequently, FIRPTA created a requirement forcing buyers to withhold 10 percent of the purchase price and remit it to the Internal Revenue Service at the time of closing, subject to a few exceptions.

The settlement agent is the party that withholds and remits the funds to the IRS, but the buyer is legally responsible.

A few exceptions are noted in the below. First is that at a sales price of $300,000 or less and buyer acquires as a principal residence there is no withholding.  Second is a sales price of $300,000 to $1,000,000 and the buyer acquires as a principal residence the withholding is 10%.

Other exceptions are:

No withholding is required under the following additional circumstances:

•    Seller provides Non-Foreign Affidavit

•    Seller  provides a Withholding Certificate from the IRS which excuses the withholding

•    The amount realized by the seller is zero

•    The property is acquired by the United States or a political subdivision thereof

Downtown Los Angeles South Park Car Wash to be 60 Story Mixed Use Tower

Los Angeles commercial real estate agentsLos Angeles South Park | 60 Story Mixed Use Tower

We’ve been hearing rumors for a very long time, and now that plans have been filed with the City of Los Angeles, we’re seeing the first illustrations of the planned 60 story mixed use monster. It’s to be built on the old car wash site across from LA Live and will include hotel, residential condos, office, retail and restaurants.

Although the building looks so thin that a good wind could blow it over, it will house 374 residential units, 373 hotel rooms, 33,000 square feet of office space and more than 65,000 square feet of downtown Los Angeles retail and restaurant space. Could there be a floor for some Los Angeles coworking space? Once again, making Los Angeles commercial real estate agents very happy to have new inventory available.

Car wash owner, Robert Bush, sold for $25 million in 2014 to developer Ben Neman who was the buyer and is the developer. Car wash owner paid $515,000 for the site back in the 80s.

Plans were just filed with the City of Los Angeles by architectural firm Nardi Associates.  Illustrations show how this is going to look.  Nardi describes it as a giant urban tree with its diagonal grid like design complete with open air atrium, LED signs and live plantings.

Preliminary lease up will begin as soon as they get final approval so if you’re interested in the retail or restaurant space, feel free to give me a call, Scott Harris Realtor, 310-473-4789.

Massive Mixed Use Project Coming for Olympic and Bundy in West Los Angeles.

new west los angeles triple net retail restaurant space for leaseThe five acre Martin Cadillac GMC dealer that’s been on the corner of Olympic and Bundy for 40 years will soon be replaced by a big new seven story 516 residential unit, apartment and or condo complex, and 10 story office with 81,000 square feet of net lease retail restaurant space plus three levels of underground parking for 1,876 parking spaces.

Los Angeles and Santa Monica commercial real estate agents will be happy to have some new net leased retail and restaurant space for lease.

The south side of the property along Olympic will see a new ten story office tower with 192,000 square feet of office space and 26,000 square feet of retail at street level.

This will be one block from the Expo Line extension in West Los Angeles.

Current owner, Dana Martin and family, will be the developer.

The new Cadillac GMC dealer will occupy the southeast corner of the ten story office tower.   I bought five cars from them over the years so I’m happy to see that they’re continuing in the new building.

If you have interest, I’ll be happy to help. Call me, Scott Harris Realtor, 310-473-4789.

Columbus Commercial Construction Update

The Columbus commercial construction update, brought to you by Walker Evans at Columbus underground, highlights both existing and new projects in and around downtown Columbus.

Columbus commercial real estate agents / commercial Realtors will be very happy to see this new product coming online. Although it means new commercial construction, but in many instances, not new as in additional retail space. We need additional retail and restaurant space for Short North, OSU area and Clintonville.

Anyway, back to the update. Notice that the Nationwide Insurance building is well on its way for completion and occupancy for March on 2016.

The Edwards Communities develop between eighth and ninth south of campus is coming along nicely helped by the very mild weather we’ve had so far this winter.

What’s nice with this one is that there’s going to be 23,000 square feet of new, additional, net leased retail space with two or three restaurants.

Below are the links to Columbus Underground’s commercial construction update

If you’re looking for Columbus retail or restaurant space, please feel free to contact me, Scott Harris at 614-905-6614.


Los Angeles Apartment Occupancy Rates Driving Rent Increases

Los Angeles commercial real estate agentNot that it isn’t obvious enough already, but take a look at the article that I found today in Curb LA regarding Los Angeles metro apartment rent increases versus vacancy rates.

This is a big boom to Los Angeles commercial real estate agents and landlords and not so good for tenants.

Citywide, rents are up an average of 7.8% over last year to an average of $1,873 per month.  Northeast San Fernando Valley prices are up 15.1%.   Los Angeles single family homes prices have increased 5.2% and incomes 2.9%.

Take a look at vacancy rates.  That explains everything.  When you see vacancy rates down to the 1% and 2% range, the sky’s the limit on rent increases.

In spite of all the new multiunit residential construction, and there’s a bunch, we need more and denser.   Los Angeles has over 15,000 units under construction right now with half of all new supply is coming online downtown.  Notice that downtown has the second highest vacancy rates and one of the slower rates of rent growth so there’s obviously a connection there.  We’re going to need to out build the population increases to keep a lid on rents.

Great thing is that all of the new mixed use high rises that are going downtown, and along the Wilshire corridor, will include street level net leased retail and that’s where I come in.  Los Angeles and Santa Monica commercial realtors are happy folks right now.

As always, if anyone is looking for triple net retail or restaurant space to buy or lease, feel free to contact me, Scott Harris at 310-473-4789.

1031 Buyer Requirement – Triple Net Retail or Absolute Net Retail, National Credit, Single Tenant – $1.3 to $2.6 Million

California exchanger in day 4 of 45 day identification period looking for triple net retail properties for sale or absolute net retail investment.  $1.3 mil needs to be replaced to $2.6 mil under the 200% 1031 rule.

Must be credit tenant, preferably single tenant, NNN, triple net leased retail with at least seven years unexpired left on net lease.   Corporate net leased retail properties for sale such as single tenant 7 Eleven, Circle K, Get Go, Turkey Hill, KFC, Chipotle, Panera Bread, Taco Bell, Walgreen, CVS, Tractor Supply, Auto Zone, NAPA, Advanced Auto, etc. is fine.  Fast food and fast casual fine if corporate lease.

Again, relinquished property closed four days ago the clock is running and will have 41 days left in the 1031 45 day identification period.

California, Los Angeles or Santa Monica commercial real estate agent  / broker /principal with property  that meets above requirement call me, Scott Harris at 310-473-4789, 614-905-6614 or better yet, email to

Retail Lease Basics

I get questions from both proprietors starting a new concept and looking for a new space to lease and investment buyers looking for net leased retail properties to purchase so I thought it would be a good time to review the basic lease types. I’m certain that most Columbus commercial real estate agents get the same exact questions

The corporate backed, investment grade, single tenant, triple net retail lease has been one of the hottest segments of the market over the last four or five years. So hot in fact that cap rates have plummeted to record lows in just about every market in the country.   Los Angeles commercial real estate agents, buyers and tenants have seen cap rate plummet to sub 4%.   Columbus commercial real estate agents in what little we have to sell here that’s newer, single tenant, net leased, credit tenant are seeing asking caps in low to mid 5% range.

First, what does investment grade or national credit really mean when coupled with single tenant, triple net ? The commercial real estate flavor du jour is a retail, single tenant, single parcel with national credit – meaning S&P BBB or the Moody’s equivalent, Baa3 or higher, long, triple net (NNN) lease. What they are really asking for is an absolute net or bond lease where there are no landlord day to day responsibilities.

But what do these acronyms really mean – NN, double net, NNN, triple net, bond lease, absolute net, modified gross and etc.? Regardless of what the seller or listing agent labels the lease, it is imperative to read the lease thoroughly at the earliest opportunity and have a real estate attorney licensed in the state where the property is located, review the lease. Remember, the devil’s in the details. Also keep in mind that the perfect lease doesn’t exist.

Back to the flavor du jour that I mentioned in the third paragraph – approach the analysis of a triple net leased investment with the idea that the buyer is purchasing the lease rather than the building and land.

Because definition of triple net leases differs, be sure you understand what’s in and what’s not in the lease. Get your hands on the lease as early in the process as possible to save time and money later. If you can get it prior to making the offer or in the offer counter offer stage, that’s even better. Best to find that one paragraph that knocks the property out of contention before you start spending money on due diligence such as inspections, surveys and appraisals.

A net lease generally refers to an arrangement where the tenant pays all or almost all of the property’s operating costs in addition to rent. There are a number of gradations of a net lease so I’ll cover the broad categories from strongest to weakest.

Bond or Absolute Net Lease. The tenant is responsible for everything – all operating expenses, maintenance, repairs and replacements for the building and site without limitation without limitation.

Triple Net (NNN) Lease. These leases follow the above except that capital expenditures, especially toward the end of the lease, are the landlord’s responsibility. You commonly will see leases that are labeled triple net are in fact double net in that the landlord is responsible for roof and structure. As I’ve said above a few times, read the lease and have a real estate attorney licensed in the state where the property is located review the lease.

Double Net (NN) Lease. Follows the above except that landlord is responsible for structural components of the building such as roof and load bearing walls, but also could include parking lot, plumbing and electrical.

Modified Gross Lease. The tenant pays its own utilities, interior maintenance, janitorial, small repairs and insurance and the landlord pays everything else.