NNN leases are straightforward in concept, but performance depends on how operating expenses are managed.
Commercial leases are often described as “triple net,” where tenants pay operating expenses in addition to base rent.
On paper, it sounds straightforward.
In practice, it rarely is.
What NNN Actually Means
A triple net lease typically requires tenants to pay their proportionate share of:
- property taxes
- insurance
- maintenance and operating costs also known as CAMS
But what’s included, and how it’s calculated, can vary widely across commercial property types and individual properties.
Where Problems Actually Occur
The challenge is not the definition.
It’s how operating expenses are structured, passed through, and managed over time.
Issues often arise around:
- unclear expense categories
- capital vs. operating cost allocation
- lack of transparency in reporting
- inconsistent management practices
Where Problems Actually Occur
For owners:
- impacts asset value and tenant retention
For tenants:
- affects total occupancy cost and predictability
These are not minor details — they influence how a property performs over time.
What to Look For
When evaluating a commercial lease:
- Understand how expenses are defined
- Review historical operating costs
- Clarify how increases are handled
- Know how management decisions affect expenses
+++++++++
The RM&D Perspective
At RM&D, operating expenses are not treated as a pass-through detail.
They are part of how an asset is managed ensuring a positive ROI for the Ownership.
Clear structure, consistent oversight, and alignment with the lease are critical to maintaining both performance and tenant relationships.
If you are evaluating a lease or managing a commercial property and want clarity around operating expenses and how they impact performance, CONTACT:
Carole Brill, CCIM
RM&D Owner / Broker
775.338.3844
carole@rmdnevada.com
About RM&D
RM&D works with property owners and investors to manage assets at the operational level, where details like operating expenses, lease structure, and day-to-day decisions directly impact performance over time.
Learn more:
All Services
>> Property Management
>> Tenant Representation
Our Projects
About Us