Understanding Triple Net Leases — And Why a Property Inspection Matters

Understanding Triple Net Leases — And Why a Property Inspection Matters If you’re considering leasing commercial space, you may come across a Triple Net Lease (NNN). This lease structure is common in retail centers, office buildings, and industrial properties, and can be a smart choice for many businesses. However, it also comes with responsibilities and potential risks that are easy to overlook if you don’t fully understand the condition of the property before signing. That’s where a commercial property inspection can make all the difference.

What Is a Triple Net (NNN) Lease?

In a standard commercial lease, the tenant pays rent and some utilities, while the landlord covers most property-related expenses. But in a Triple Net Lease, the tenant is responsible for three major operating costs—on top of rent:

1. Property Taxes
2. Insurance
3. Maintenance and Repairs

This can mean everything from HVAC servicing and roof upkeep to parking lot repairs and landscaping. Essentially, you’re treating the property almost as if you own it—just without the equity.

Why Tenants Choose Triple Net Leases

Triple Net Leases can offer several advantages:

• Lower Base Rent: The monthly rent is often lower than in a traditional lease.
• More Control: Tenants can maintain the property to their standards.
• Long-Term Stability: These leases are typically longer term and predictable.

For many businesses, especially established ones looking for a stable and customizable space, this can be an attractive setup.

The Hidden Risk: Unknown Property Condition

Because you’re responsible for maintenance and repairs, any existing issues with the building can quickly become your problem. Examples include:

• A roof near the end of its life
• An HVAC system that’s overdue for replacement
• Plumbing issues that may not be obvious at first glance
• Deferred maintenance the property owner never addressed

If you sign the lease without understanding the property’s true condition, you may end up paying far more than expected down the road.

How a Commercial Property Inspection Helps

A professional commercial inspection provides a clear picture of the building’s current state before you commit. An inspector evaluates key systems and components, such as:

• Roof condition and expected remaining life
• HVAC systems, age, efficiency, and service history
• Electrical systems and any safety concerns
• Foundation and structural integrity
• Plumbing and potential leaks or deterioration
• Exterior elements like parking lots, drainage, and stucco/paint

The inspection report will highlight:

• Existing defects
• Projected maintenance needs
• Estimated remaining life expectancy of major systems

This empowers you to: ✔ Budget accurately for future upkeep ✔ Negotiate terms, credits, or repairs before signing ✔ Decide whether the lease is truly a good deal

The Bottom Line

A Triple Net Lease can be a great option—but only when you fully understand the responsibilities you’re taking on. A commercial property inspection gives you the insight needed to make an informed decision and protect your bottom line. If you’re considering signing a Triple Net Lease, don’t go in blind. Get the building evaluated first — your future self (and budget) will thank you.