NN vs NNN Lease: Double Net vs Triple Net Explained

In an NN (double net) lease the tenant pays base rent plus property taxes and building insurance, while the landlord stays responsible for maintenance and structural repairs. In an NNN (triple net) lease the tenant pays taxes, insurance, and common area maintenance, leaving the landlord with little more than the roof and structure. The single word of difference is maintenance, and it is the reason double net properties usually trade at a slightly higher cap rate than triple net ones.

The net lease shorthand is used loosely in listings and term sheets, and the number of Ns on a cover page is not a reliable description of what the lease actually says. Two properties both marketed as NNN can allocate roof replacement, parking lot resurfacing, and HVAC capital work in completely different ways. This guide sets out what each structure means, who pays for what, where the labels break down, and what an investor or lender needs to pull out of the lease before trusting any of it.

Last updated July 2026.

What is the difference between an NN and an NNN lease?

The difference is common area maintenance. Both structures pass property taxes and building insurance to the tenant on top of base rent. A triple net lease adds the third net, maintenance of the property and its common areas, so the tenant carries nearly all operating cost. In a double net lease the landlord keeps maintenance, which means the landlord keeps an unpredictable expense line: parking lots, landscaping, HVAC servicing, and often the roof. That retained obligation is why the two structures price differently even when the rent is identical.

Who pays what in single, double, and triple net leases?

The three Ns stand for property taxes, building insurance, and common area maintenance. Each net you add moves one of those from landlord to tenant.

Single net leases are rare in practice. Most of the market lives in the double net and triple net columns, with absolute net reserved for credit tenant deals where the tenant genuinely takes every obligation, including casualty and condemnation risk. The important row is the last one: in a standard triple net lease the landlord normally retains roof and structural responsibility, which is exactly the distinction that separates NNN from absolute net.

What is a double net (NN) lease?

A double net lease requires the tenant to pay base rent plus its share of property taxes and building insurance. The landlord remains responsible for maintaining the property, including common areas, the roof, and the structure. Double net leases show up frequently in multi-tenant retail and industrial properties, where a landlord wants to control the quality and timing of maintenance across the whole site rather than leave it to individual tenants. The landlord bills taxes and insurance through as they come due, often as an estimated monthly charge reconciled annually.

For an owner, the appeal is control. For an investor, the drawback is that the maintenance line is a real, variable expense sitting between gross rent and net operating income, and it will not stay flat. Roof and parking lot work arrives in lumps.

What is a triple net (NNN) lease?

A triple net lease requires the tenant to pay base rent plus property taxes, building insurance, and common area maintenance. The tenant either handles the maintenance directly, in a single-tenant building, or reimburses the landlord for its pro rata share of CAM in a multi-tenant one. Because so little expense risk sits with the landlord, NNN properties leased to strong corporate tenants behave more like bonds than like operating real estate, which is what makes them attractive to passive owners and 1031 exchange buyers.

What NNN does not usually mean is that the tenant pays for everything. Roof, structure, and often capital replacements stay with the landlord unless the lease says otherwise. Read the maintenance clause and the capital expenditure carve-out before assuming otherwise. The full mechanics are covered in our guide to what a triple net lease is.

Why do NN properties trade at higher cap rates than NNN?

Because the landlord keeps an expense. A buyer pricing a double net asset knows that maintenance, and possibly the roof, will consume some of the net operating income over the hold period, and that the size of that consumption is uncertain. Uncertainty and retained expense both push the required return up, which shows up as a higher cap rate and therefore a lower price for the same rent. A triple net asset with an identical tenant and identical rent will generally trade tighter because the income is cleaner and closer to what the owner actually keeps.

The corollary matters for anyone underwriting: two listings quoting the same cap rate on the same rent are not equivalent if one is NN and the other NNN. The NN deal is priced richer than it looks.

What is an absolute NNN lease?

An absolute net lease, sometimes called a bondable lease, makes the tenant responsible for every cost associated with the property, including the roof, the structure, and the obligation to keep paying rent even after a casualty or condemnation. There is no landlord obligation to be performed and no rent abatement. These are used with investment grade tenants on long term single tenant deals, and they are considerably rarer than the number of listings using the word absolute would suggest.

The practical test is simple. Search the lease for any landlord repair obligation, any rent abatement provision, and any termination right on casualty. If you find one, it is not absolute, whatever the broker called it.

Does a triple net lease include property taxes?

Yes. Property taxes are the first of the three nets, so a triple net tenant pays them, either directly to the taxing authority or as a reimbursement to the landlord. What varies is how the tenant is protected. Look for whether the lease lets the tenant contest an assessment, whether special assessments and improvement district levies are included, and how taxes are apportioned in the first and last partial years of the term. In a multi-tenant building, taxes are billed on a pro rata share of rentable area, and that share moves whenever a tenant expands or contracts.

How do you tell what a lease really is?

By reading the expense clause, not the label. The reliable method is to go through the lease and answer six questions in order: who pays property taxes, who pays building insurance, who pays common area maintenance, who pays for the roof and structure, are capital expenditures excluded from the recoverable pool, and is there a cap on what can be passed through. The answers, not the name of the lease, tell you the structure. It is also worth checking the insurance clause carefully, because a tenant that is required to carry insurance is not necessarily paying the landlord property insurance; landlords typically track tenant coverage through a certificate of insurance tracking system while separately billing the building policy through the nets.

Where this gets expensive is at portfolio scale. An owner with sixty net leased assets acquired from four different sellers has sixty different expense clauses, and nobody has read them side by side. That is the case for abstracting the leases into a consistent dataset rather than trusting the rent roll headers.

What should a net lease abstract capture?

For any net lease, the abstract needs the expense allocation itself, spelled out per category rather than as a label. Specifically: which of taxes, insurance, and CAM the tenant pays; the tenant pro rata share and the rentable area figures behind it; the landlord roof, structure, and capital carve-outs; any cap on controllable expenses; exclusions from the recoverable pool; the tenant audit right and its deadline; and the reimbursement mechanism, whether direct payment or estimated monthly billing with annual reconciliation.

Those fields are what let you check a reconciliation statement instead of paying it. They are also the fields that get amended and never make it back into the system of record. On the other side of the spectrum, a gross lease abstract has to capture base year and expense stop mechanics instead, because there the landlord is absorbing the expenses and the argument is about increases rather than about categories.

The practical takeaway

Treat NN and NNN as a starting hypothesis, not a fact. The one word of difference between them, maintenance, is worth real basis points on a cap rate, and the labels are applied inconsistently enough that the only way to know what you own is to read the expense clause of every lease. On a single asset that is an afternoon. Across a portfolio it is the reason lease abstraction exists.

If you are underwriting net leased assets or reconciling pass-throughs across a portfolio, our lease abstraction software pulls the expense allocation, pro rata share, caps, and audit rights out of each lease with a page citation for every field, and lease abstraction for lenders covers what a credit file needs from the same documents. You can upload a lease and see the output before you commit to anything.