Commercial real estate lease can be of different types, and each of them has its own peculiarities and nuances. In this article we will take a detailed look at popular types of commercial real estate lease. We will determine what they are, what are their differences, and also analyze the pros and cons of each of these types of leases. 1. Single Net Lease (N) In a Single Net Lease, the tenant is responsible for paying base rent and property taxes. Operating expenses such as utilities and insurance remain the responsibility of the landlord. This makes the single net lease more attractive to tenants who prefer to minimize their liability for additional costs. 2. Double Net Lease (NN) Double Net Lease adds another expense to the tenant's obligations - building insurance. The tenant is responsible for property taxes and insurance, while the landlord is responsible for building maintenance and major repairs. This type of lease is between a single net lease (N) and a triple net lease (NNN). 3. Triple Net Lease (NNN) This is a type of lease in which the tenant (lessee) is responsible for paying not only the base rent, but also all costs associated with operating the property, such as property taxes, insurance, and utilities. Thus, the landlord (owner) receives a "net" rent free of operating expenses. 4. Absolute Net Lease This is a type of lease that is often considered a stricter form of Triple Net Lease. In an Absolute Net Lease, the tenant is responsible for absolutely all expenses, including major overhauls and renovations. The landlord typically has no involvement in operating costs and repairs. 5. Full Service Gross Lease (All-Inclusive Gross Lease) This type of lease differs from a Triple Net Lease (NNN). In an all-inclusive gross lease, the tenant pays a fixed amount of rent that includes all operating expenses: taxes, insurance, utilities and building maintenance. The landlord bears the risk of changes in these costs, which makes this type of lease less favorable for the landlord, but more convenient for the tenant. 6. Modified Gross Lease A modified gross lease is a hybrid between a net lease and a gross lease. The tenant and landlord agree to share certain expenses. For example, the tenant may pay base rent and utilities, while property taxes and insurance remain the responsibility of the landlord. This type of lease provides flexibility for both parties. 7. Percentage Lease In a percentage lease, the tenant pays a base rent plus a percentage of the gross revenue generated by the business. This type of lease is often used in retail or restaurant businesses where the landlord has a vested interest in the tenant's success and is willing to receive a portion of the profits. This makes a percentage lease different from a triple net lease (NNN) because the percentage of the rent is based on the tenant's income. Each type of lease has its own characteristics and is appropriate for different situations. Understanding the differences will help tenants and landlords choose the best lease structure for their needs and goals. This article identifies the characteristics of each type of lease, provides their pros and cons, and offers some contract language specific to each type.