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What Are The Different Types of Commercial Leases?
Typically, when dealing with commercial real estate to lease in Houston a gross, single net, double net, triple net, or percentage lease is used.
Gross Lease – is a fully serviced lease where the landlord pays all or most of the expenses associated with the property. Very often, the costs are passed onto the tenants in rent in what is referred to as a load factor. Gross leases are usually used in office properties and warehouse space, but can be used in retail leases as well.
Single Net Lease - the lessee or tenant is responsible for paying property taxes as well as the base rent. This can be used in any type of commercial lease property.
Double Net Lease - the lessee or tenant is responsible for real estate taxes and commercial property insurance. The lessor or landlord is responsible for any expenses incurred for structural repairs and common area maintenance. This can also be used in any type of commercial lease property.
Triple Net Lease – is a lease agreement on a property where the tenant or lessee agrees to pay all real estate taxes, building insurance, and maintenance on the property in addition to normal rent. In such a lease, the tenant or lessee is responsible for all costs associated with the repair and maintenance of any common area. This form of lease is most frequently used for commercial freestanding buildings and retail space however, it has also been used in single family residential rental real estate properties.
Percentage Lease – the tenant is responsible for paying base rent on the property, as well as a monthly % of revenue earned from the business occupying the rented space. They are most often used in retail spaces and specifically malls.
