Some Basic Benefits of a Triple Net Gateway Lease
One of the most popular property types in the commercial real estate is what is known as the triple net or the triple n (3N) that represents 3 net terms given to tenants with high credit ratings. What this means is that the tenant is responsible to pay the leased real estate taxes or tax net, insurance, and all property maintenance.
Commercial property owners should look at these triple net deals as the perfect investment since the management responsibility if given to the tenant and so this is the best place to put their extra money without headaches and with better profitability. Property owners are assured on a long-term lease since the tenants that they get are only those that have satisfied the qualifications required. This then also means having a stable net income and a unique measure to bypass taxes and insurance to shelter their leased real estate investment.
Tenants have a higher risk in this arrangement since the property owner is favored more than the tenant in this arrangement. However, there are various reasons which shows that for some retail and industrial rentals, this is not the case.
One reason is that retail and industrial rentals have more control of the property, so if your need plumbing system installation or roof repairs, you don’t have to ask the property owner for approval. The tenants are able to hire contractors or anyone who can install or repair various fixtures which are necessary for their present needs. But these have qualifications like you don’t hire contractors that use substandard roofing materials or anything critical to its long lifespan. Making small changes to the property is included in the tenants right which is not under the control of the property owner. However, the lease moderates this agreement that is signed prior to the tenant occupying the place.
One of the biggest advantages of a triple net lease is that it usually has lower rents compared to gross rents. These lower rents can then absorb the lessee fluctuating operational expenses that is typical to the mark of a retail and some industrial rentals.
The Triple Net Gateway for tenants will require a kind of quality risk management after it has identified the risk factors that is involved prior to signing the contract which means that one must be cautious in negotiating caps. This includes maximum amount that you are liable for over the basic rent amount each year. Keep in mind that you are liable for these extra expenses no matter how well or how poorly your business goes during the lease term. When carried out correctly you will see that a triple net lease will not only benefit the property owner, it will also benefit the tenant.
Reference: you could try this out