What is a double net lease (NN)?
A double net lease (NN or net-net lease) is a commercial lease arrangement where the tenant is responsible for paying base rent plus two of the three expense categories in a triple net lease typically property taxes and building insurance. The landlord retains responsibility for structural maintenance and repairs.
What Tenant Pays Under NN
- Base rent.
- Property taxes.
- Building insurance premiums.
What Landlord Retains
- Structural maintenance and repair costs.
- Major capital expenditure on the building envelope.
Double net leases represent a balanced risk-sharing arrangement between landlord and tenant. The landlord retains exposure to structural maintenance costs which can be significant in older buildings while the tenant takes on predictable tax and insurance obligations. This structure is common in mid-term office and retail leases in developed commercial markets.
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