Business leaders interested in renting commercial space may not always see the intrinsic value of a triple net lease. When compared to other types, a triple net lease feels like renters are paying more than their fair share. But sometimes a little due diligence and a deeper understanding of what a triple net lease involves may help professionals rethink their position. The benefits of a triple net lease can be very appealing for business owners and organizations.
What is a Triple Net Lease?
Landlords and investors typically use either gross or net leases when renting space. A gross lease establishes a set rate for a unit, building, or square footage in a commercial building. Property owners or their proxies set the price based on wide-reaching factors.
By contrast, a net lease offers tenants a base price plus a percentage of the property’s operating expenses. A single-net lease might involve rent plus maintenance, a double-net might include rent, maintenance and insurance. The triple-net lease generally includes rent plus maintenance, insurance, and taxes.
What are the Benefits of a Triple Net Lease?
When tenants sign a triple net lease, the landlord usually tally the taxes, insurance, and annual taxes, and divide that figure by twelve months. Many triple net leases extend for 10-15 years and are ideal for business owners seeking a real estate investment that has steady growth and is low risk. Here are some of the other benefits of a triple net lease.
Triple Net Pre-Pays for Upkeep
It’s not unusual for landlords or management companies to fall behind in general maintenance and upkeep due to tight budgets. Facilities covered by a triple net lease earmark a portion of the monthly rents. This revenue often goes to third-party property management professionals. Essentially, tenants with a triple net lease occupy better-kept facilities.
Tenants Gain Improved Stability
Commercial rental properties sometimes go bankrupt due to a lack of revenue. Landlords and investors underestimate the cost of maintaining a building or get behind in rising taxes. Because those financial elements are already factored into the monthly rent, tenants possess a more secure workspace. The last thing a business owner wants is to come to work and be locked out.
Triple Net Leases May Be Transferable
The triple net lease can be something of an investment for growing companies. They are generally transferable among leaseholders. That means you can secure a triple net lease, occupy the building, and then flip it should you outgrow the space or find a more lucrative opportunity. In this sense, a triple net lease becomes an asset and agreement worth signing.
Do You Need Reliable Commercial Space?
After reviewing the terms, entrepreneurs and other business decision-makers often find triple net leases a secure opportunity. At Summit Properties, we have a portfolio of premium commercial office space available in some of London’s prime business districts. If you’re looking for office space that will be customized to your needs and offers first-rate customer service, contact us today to schedule a viewing of our properties.