NNN, gross, modified gross — every lease quote hides the real number somewhere different. Here's how to read them side by side.
Two spaces can advertise very different rents and cost you exactly the same — because each lease type splits the building's expenses differently. Always establish the type before comparing numbers.
Base rent plus your share of the building's property taxes, insurance, and common-area maintenance (the three "nets"). The advertised rate looks lowest, but you pay the operating costs on top. Most industrial space is quoted this way.
One number covers rent and operating expenses — the landlord pays taxes, insurance, and upkeep. Simple to budget, and the advertised rate looks highest. Common for office space, less so for industrial.
The middle ground: base rent includes some expenses and you pick up others — often your own utilities and janitorial, sometimes any increase in taxes or insurance above the first year ("base year"). Read the split carefully; no two are identical.
It's a modified gross variant common in small-bay industrial: rent includes the building's current taxes and insurance, and tenants pay increases plus their own utilities. Treat the label as a starting point — the lease language, not the name, decides who pays what.
On an NNN lease you reimburse your pro-rata share (your suite's percentage of the building) of three expense buckets. Together they're often called NNN charges, CAM, or pass-throughs.
NNN charges are an estimate, reconciled against actual expenses once a year. If actuals came in higher, you get a bill for the difference; lower, a credit. Asking for the last two years of reconciliations tells you whether the estimate is honest.
Ten terms that show up in almost every industrial lease — and move real money.
A five-minute exercise that prevents the most common leasing mistake: picking the quote that only looked cheaper.
Convert monthly quotes to annual and gross quotes to their parts. One consistent unit or the comparison is fiction.
A $12.50 NNN space with $4.75 in charges costs $17.25 — which may be more than a $16.50 modified gross space. Compare totals, never base rents.
Management fees, reserves, and admin markups vary building to building. Same label, different contents.
Apply each quote's escalation. A cheaper year one with steeper escalations can cost more over the term.
Spread free rent and TI across the term to get an effective rate. That's the number the two deals should be judged on.
Florida's long-standing sales tax on commercial rent was repealed effective October 2025. Older quotes, budgets, and lease abstracts may still show it — new leases shouldn't.
Add them: $17.25 per square foot per year. On 5,000 SF that's $86,250 a year, about $7,188 a month — before your own utilities and insurance.
Usually the landlord carries structural items like the roof and slab as capital costs — but some leases pass roof repairs (or even replacement, amortized) through CAM. It's one of the first clauses we check.
Yes — they track the building's actual expenses, so a tax reassessment or insurance spike flows through at the annual reconciliation, even while your base rent is fixed.
Three to five years, often with one or two renewal options. Landlords trade longer terms for TI dollars and free rent; month-to-month exists but you'll pay for the flexibility.
Send us the quote. We'll break down what it really costs per month — and which terms are negotiable.