Triple Net vs. Full-Service Lease: What’s the Difference? A Guide for Triangle Tenants and Owners
Triple Net vs. Full-Service Lease: What’s the Difference?
If you're navigating the Raleigh-Durham commercial real estate market, understanding your lease options is essential—whether you're a tenant looking for the right space or a landlord preparing to market your property.
Two of the most common commercial lease types are the Triple Net (NNN) Lease and the Full-Service (Gross) Lease. These structures define who pays for what—and they can significantly impact your expenses, responsibilities, and overall deal value.
Let’s break down the differences between a triple net lease vs full service lease, and help you determine which makes the most sense for your business or investment goals.
1. What Is a Triple Net (NNN) Lease?
In a triple net lease, the tenant pays not only base rent but also:
Property taxes
Insurance
Maintenance and operating expenses
This lease type shifts most of the financial responsibility to the tenant. While the base rent is usually lower than in a full-service lease, the tenant must budget for variable costs.
Landlord Benefits:
Predictable income with minimal operating costs
Attractive to investors seeking passive income
Tenant Considerations:
Exposure to fluctuating expenses
More control over property maintenance
Triple net leases are especially common in freestanding retail buildings, medical offices, and investment-grade properties throughout Durham, RTP, and the Triangle region.
2. What Is a Full-Service (Gross) Lease?
A full-service lease—often used in multi-tenant office buildings—means the landlord covers most or all building expenses, including:
Property taxes
Insurance
Maintenance
Utilities and janitorial services
The tenant pays a single, all-inclusive rent amount each month, which simplifies budgeting.
Landlord Considerations:
Higher gross rent to offset expenses
Responsibility for rising operating costs
Tenant Benefits:
Predictable monthly rent
Less administrative hassle
Full-service leases are especially common in Class A office buildings in Raleigh, where amenities and shared services are bundled into the rental rate.
3. Modified Gross Leases: A Middle Ground
In between the two extremes, you'll find modified gross leases, where the landlord and tenant split certain costs. For example, the tenant might pay base rent and utilities, while the landlord handles taxes and insurance.
This hybrid structure offers flexibility and is increasingly common in flex spaces and smaller office buildings across the Triangle.
4. How to Choose the Right Lease Structure
Whether you’re leasing space in downtown Durham, Brier Creek, or near Research Triangle Park, choosing the right lease depends on your goals:
Tenants Should Ask:
What expenses am I responsible for?
Are there caps on controllable costs?
How will operating expenses be reconciled annually?
Landlords Should Ask:
Which structure best fits my property type and tenant profile?
Do I want predictable income or am I willing to manage variable costs?
Understanding the pros and cons of each lease type ensures you enter negotiations fully informed—and can avoid surprises down the road.
Work With a Local Expert Who Understands Commercial Lease Types
Lease terms can be complex and vary widely by market. That’s why it helps to work with a local commercial real estate broker who understands the Raleigh-Durham landscape. At [Your Brokerage Name], we help tenants and owners navigate triple net lease vs full service agreements, evaluate hidden costs, and negotiate terms that support long-term success.
Need Help Reviewing a Lease?
Let’s talk. Whether you're a first-time tenant or seasoned investor, we’re here to help you understand your options and make smart real estate decisions in the Triangle.