Triple net leases are unique because they transfer nearly all the financial and operational responsibilities of property ownership from the landlord to the tenant. In this structure, the tenant pays for property taxes, insurance, and all maintenance and repairs, in addition to the base rent. This arrangement provides landlords with a highly predictable and stable cash flow, as their only responsibility is to collect rent, while tenants manage the operational aspects of the property.
The triple net lease structure is particularly attractive for investors seeking minimal management involvement. Because the tenant is responsible for all property-related expenses, the landlord is insulated from fluctuations in operating costs, resulting in a stable cash flow throughout the lease term. This hands-off approach is especially beneficial for institutional investors and those managing large portfolios, as it reduces the time and resources needed for property oversight.
Triple net leases are commonly used in sale-leaseback and build-to-suit transactions, where a corporate tenant either sells a property and leases it back or enters a lease for a newly constructed facility. These arrangements allow companies to unlock capital while retaining long-term control over their operational real estate.