Your Actual Exposure: $620,000

A $5,000/mo lease types lease doesn't create $5,000/mo in liability. It creates $620,000 in total exposure across rent, personal guaranty, restoration, and every other clause your landlord drafted to protect themselves — not you.

Where $620,000 Comes From

Remaining Rent$180,000
Personal Guaranty$180,000
CAM Charges$72,000
Restoration$40,000
Early Termination$60,000
Legal Fees$25,000
Holdover$60,000
Total Exposure$620,000

What Most People Miss

The NNN escalation. Property taxes, insurance, and CAM charges increase every year. In year 10, your $2,000/month NNN obligation might be $3,200/month — a 60% increase with no protection unless you negotiated caps.

Key Risks in This Scenario

  • Property tax increases are passed directly to you — no cap without negotiation
  • Roof and structural maintenance can run $20,000-$50,000 in a single year
  • Insurance premium increases pass to you annually without limit

How to Reduce Your Exposure

  • Cap annual NNN increase at 5% per year regardless of actual increases
  • Exclude capital expenditures (roof replacement, parking lot resurfacing) from NNN obligations

Frequently Asked Questions

What does 'triple net' mean in a lease?
Triple net means you pay three 'nets' in addition to base rent: property taxes, building insurance, and common area maintenance. These can add 20-50% to your base rent every month.
What is the difference between NNN, modified gross, and gross leases?
Gross lease: you pay one all-in number. Modified gross: some expenses included, some passed through. NNN: you pay base rent plus all operating expenses. NNN creates the highest and most variable tenant cost.
Can NNN charges be negotiated?
Yes. Cap annual increases at 3-5%. Exclude capital improvements and structural repairs. Get the right to audit NNN calculations annually. These provisions can save $20,000-$50,000 over a 10-year term.
What is a gross-up provision in a NNN lease?
A gross-up clause lets the landlord calculate your NNN share based on 100% occupancy even if the building is partially vacant. This inflates your share. Push to remove it or limit it to 95% occupancy.
What NNN charges can I exclude?
Negotiate to exclude: capital improvements, landlord management fees over 3%, leasing commissions, costs to cure landlord code violations, and improvements that benefit other tenants.