If you’re new to commercial real estate investing, you’ve probably heard the term “Triple Net Lease” (or NNN lease) but might be unsure what it really means — or why so many investors find these leases attractive.
At NAI Harmon Group in Toledo, Ohio, we work with a diverse range of investors who seek to understand the intricacies of lease structures to make informed investment decisions. This guide will break down the basics of NNN leases, explain how they work, and explore why they’re a popular choice in commercial real estate.
A Triple Net Lease is a commercial lease agreement where the tenant agrees to pay three key expenses in addition to the base rent:
Property Taxes
Property Insurance
Maintenance and Operating Expenses (like repairs, landscaping, common area upkeep)
In other words, the tenant covers the “nets” (costs) associated with owning the property. This shifts many financial responsibilities from the landlord to the tenant.
Imagine you own a retail building in Toledo and lease it to a tenant under a triple net lease:
The tenant pays monthly rent.
In addition, the tenant pays their share of property taxes and insurance premiums for the building.
They also cover maintenance costs, such as HVAC repairs, roof upkeep, or snow removal.
Because the tenant handles these expenses, the landlord receives relatively predictable, “net” income, with fewer surprises for unexpected property costs.
Stable Income Stream: Since tenants pay most expenses, landlords typically enjoy more consistent cash flow.
Lower Management Burden: Landlords don’t have to manage day-to-day property upkeep, reducing headaches and costs.
Long-Term Tenants: NNN leases often span 10+ years with built-in rent escalations, attracting investors seeking steady, long-term returns.
Tenant Responsibility: Tenants are motivated to maintain the property well since they directly pay maintenance and taxes.
Retail properties (fast food chains, drugstores)
Industrial buildings and warehouses
Office buildings
Healthcare facilities
Many national tenants prefer triple net leases because they can standardize costs and maintenance across locations.
While NNN leases offer many benefits, there are some risks and considerations:
Tenant Creditworthiness: Because tenants cover most expenses, a financially strong tenant is crucial to avoid missed rent or expense payments.
Lease Terms: Review the lease carefully—some NNN leases include caps or exclusions on what tenants must pay.
Property Condition: Ensure the building is well-maintained at lease start to avoid unexpected capital expenses.
Market Rent: Confirm the rent and expense payments align with market standards in Toledo and surrounding Northwest Ohio.
At NAI Harmon Group, we have deep expertise in commercial real estate across Toledo, Defiance, and Northwest Ohio. We guide investors through evaluating NNN leases, understanding tenant risk, and identifying properties that fit your investment goals.
Whether you’re a first-time investor or expanding your portfolio, our team offers:
Local market knowledge
Access to off-market and listed NNN lease opportunities
Analysis of lease structures and tenant profiles
Contact the team at NAI Harmon Group today to discuss how triple-net lease investments can fit your financial goals. We’re here to help you navigate the market with confidence and clarity.
Phone: (419) 960-4410
Website: www.naiharmon.com