Your Actual Exposure: $280,000

A $6,000/mo lease types lease doesn't create $6,000/mo in liability. It creates $280,000 in total exposure across rent, personal guaranty, restoration, and every other clause your landlord drafted to protect themselves — not you.

Where $280,000 Comes From

Remaining Rent$180,000
Personal Guaranty$108,000
Restoration$20,000
Early Termination$36,000
Legal Fees$15,000
Holdover$36,000
Total Exposure$280,000

What Most People Miss

Gross leases aren't a free pass. The landlord builds operating cost increases into the base rent and caps them in their favor. You're still exposed to personal guaranty liability, restoration obligations, and escalating rent on renewal.

Key Risks in This Scenario

  • Gross lease rent increases can still be steep — no NNN exposure doesn't mean no increases
  • All-in rent makes it harder to identify landlord cost inflation
  • Gross leases still include restoration obligations and personal guaranty requirements

How to Reduce Your Exposure

  • Cap annual rent increases at CPI or 3%, whichever is less
  • Negotiate a right to audit landlord operating cost calculations if included in rent

Frequently Asked Questions

Is a gross lease better than a NNN lease?
It depends on the numbers. Gross leases provide cost certainty — one payment covers everything. NNN leases can sometimes be cheaper if operating costs are low, but they create variable cost risk.
Can a gross lease include a percentage rent clause?
Yes. Some landlords include gross-over-threshold percentage rent even in gross leases. Review the rent provision carefully — even 'simple' gross leases can have complex rent calculations.
What is included in a gross lease?
Typically: property taxes, building insurance, structural maintenance, common area maintenance. Utilities are sometimes included, sometimes not. Get explicit confirmation of exactly what 'gross' covers.
How do rent escalations work in gross leases?
Gross lease rents typically escalate by a fixed percentage (3-5% annually) or CPI. Over a 5-year term at 3% annual escalation, your rent in year 5 is 16% higher than year 1.
Do gross leases require personal guaranties?
Yes, gross leases carry the same personal guaranty requirements as NNN leases. The lease structure doesn't affect the guaranty — your personal liability is determined by the guaranty provision, not the rent structure.