More recoverables and a gross offerAdmin fee on CAM, other pass throughs, compare with a gross quote
Recoveries follow each tenant's pro rata share, so costs tied to empty space stay with the owner unless the lease grosses them up.
See tenant cost breakdown
On a triple net lease you pay base rent plus your pro rata share of the building's property taxes, insurance and common area maintenance (CAM). Your share is your leased square feet ÷ the building's square feet, and those three charges usually add $3 to $16 per sq ft a year. Take 2,000 sq ft in a 10,000 sq ft building: a 20% share of $60,000 in building costs is $12,000 a year, which on top of $44,000 of base rent makes $56,000, or $28 per sq ft all in. Base rent then usually climbs 2 to 4% a year, while the NNN part moves with the building's real costs.
How to calculate a triple net lease
Total occupancy cost = base rent + (property taxes + insurance + CAM) × your pro rata share. The NNN calculator above runs that split for tenants and the matching recovery math for owners.
| Tenant NNN cost what the tenant pays | Landlord recoveries what the owner keeps | |
|---|---|---|
| Pro rata share | Leased area ÷ total property size | Leased area ÷ total property size |
| Base rent | Leased area × yearly base rate per sq ft (monthly rates × 12) | Leased area × average base rent, less any vacancy and collection loss |
| NNN charges | Taxes, insurance and CAM × share | Building costs × the leased share, billed back to tenants |
| Result | Base rent + NNN charges (÷ 12 for monthly) | Base rent collected + recoveries − building costs |
Worked example: 2,000 sq ft in a 10,000 sq ft building, so a 20% share
How this triple net calculator works: it multiplies each building expense by your share of the floor area and adds the results to base rent. Per sq ft entry skips the split when the landlord already quotes charges that way. Over the term, base rent rises by the escalation while NNN charges hold at today's figure, since they follow actual bills.
When to use this triple net calculator
Whenever a lease quote names a base rate "plus NNN" and someone needs the full yearly or monthly figure.
- Lease negotiations: compare a gross offer with an NNN offer at the same all in rate per square foot. Open More recoverables and type the gross quote, and the result tells you which space costs less on your floor area and by how much.
- Tenant budgeting and underwriting: model the full occupancy cost before signing, not just the headline rent.
- Rent roll projections: landlords can run each suite to forecast base rent and recoveries, then switch to the Landlord recoveries tab to see net cash flow for the whole building after the vacant share.
- Checking a CAM reconciliation: enter the actual year end totals and compare your share with what you paid in monthly estimates.
- Full service gross vs NNN across buildings: line up several properties on one all in figure per square foot.
- Retail, office and industrial space: one nnn calculator handles all three, though the expense mix changes a lot. Strip center CAM and multi tenant office CAM can sit several dollars apart per square foot, so use each building's own numbers.
- Monthly estimate billing: divide the tenant's yearly NNN share by 12 for the estimated payment.
- Renewals: set the term and escalation to see what five or ten more years commit you to.
What does $20 per sq ft NNN mean?
It means $20 of base rent per square foot each year, with your share of property taxes, insurance and CAM billed on top. The $20 is never the full rent.
| 1,500 sq ft quoted at $20 NNN | Per sq ft a year | A year | A month |
|---|---|---|---|
| Base rent | $20.00 | $30,000 | $2,500 |
| NNN charges, if they run $6 | $6.00 | $9,000 | $750 |
| What the space really costs | $26.00 | $39,000 | $3,250 |
Ask the landlord for last year's NNN figure per square foot before comparing spaces. A quote that sounds cheap at $15 often lands somewhere between $22 and $26 per sq ft once the three nets are added, which can make it dearer than a gross listing at $24.
Typical NNN expense ranges per square foot
Taxes, insurance and CAM together usually come to $3 to $16 per sq ft a year. Building class, age and the local tax bill explain most of the spread.
| Charge | Typical per sq ft a year | What moves it |
|---|---|---|
| Property taxes | $1 to $8 | Assessed value and the local rate; common range across major US metros |
| Insurance | $0.50 to $2.00 | Property type, construction and risk |
| CAM (maintenance, landscaping, common utilities) | $3 to $10 | Building class and amenities. Parking lot lighting and striping, landscaping and portering all land here. |
| CAM, retail strip center | $3 to $6 | Shared parking and storefront upkeep |
| CAM, industrial building | $1.50 to $3 | Few shared areas |
| CAM, multi tenant office | $7 to $12 | Lobbies, elevators, janitorial and security |
| Total NNN charges | $3 to $16 | Building class, age and market |
The worked example above ($2.40 taxes, $0.60 insurance, $3.00 CAM) sits inside every range. Use the building's own operating statements whenever the landlord will share them.
How is a tenant's pro rata share calculated?
Pro rata share = your leased square feet ÷ the total leasable square feet of the property. That percentage is applied to every shared building cost.
- Divide your space by the building2,000 sq ft in a 10,000 sq ft building is a 20% share.
- Apply it to each pooled cost20% of $24,000 in taxes is $4,800. Repeat for insurance, CAM and any admin fee the lease allows, then add them up for the yearly NNN bill.
- Check which square feet the lease usesRentable area includes a slice of lobbies and corridors, usable area does not. The gap, called the load factor, typically runs 10 to 25% in US office buildings, so both numbers in the division must be on the same basis.
Watch for a gross up clause too. It adjusts the building total as if the property were fully occupied, so a tenant does not absorb a bigger slice of costs just because neighbouring suites are empty.
NNN lease vs gross lease: who pays which costs?
Each extra "net" moves another building cost from owner to tenant, which is why a gross rate looks higher on paper.
| Lease type | Property taxes | Insurance | CAM | Roof and structure |
|---|---|---|---|---|
| Gross or full service gross | Landlord | Landlord | Landlord, often utilities too | Landlord |
| Modified gross | Base year by landlord | Shared | Shared | Landlord |
| Single net (N) | Tenant share | Landlord | Landlord | Landlord |
| Double net (NN) | Tenant share | Tenant share | Landlord | Landlord |
| Triple net (NNN) | Tenant share | Tenant share | Tenant share | Usually landlord |
| Absolute NNN | Tenant | Tenant | Tenant | Tenant |
To compare a gross quote with an NNN quote, put the gross rate in the Gross lease offer field. The calculator sets it against your all in NNN rate on the same floor area. For a plain rent per square foot conversion without the expense split, the annual rent calculator has a commercial tab.
CAM reconciliations, caps and fees that change the NNN bill
Monthly NNN payments are estimates. The real number arrives with the year end reconciliation, and a handful of clauses decide how big it can get.
| Clause | What it does | Typical figure |
|---|---|---|
| Year end reconciliation | Estimates are set against actual costs. A shortfall is billed, sometimes thousands; an overpayment comes back as a refund or credit. | Usually 90 to 180 days after the calendar year closes |
| CAM cap | Limits how much CAM can rise from one year to the next. | Commonly 3% to 5% a year |
| Controllable vs uncontrollable | Taxes, insurance and utilities are often outside the cap and can rise without limit. | Set by the lease wording |
| Admin or management fee | An extra charge on operating costs, recoverable when the lease allows it. | A negotiated percentage; enter it in the calculator |
| Capital expenditures | A new roof or HVAC system is commonly excluded from CAM. | Excluded unless the lease allows amortized pass throughs |
| Tax reassessment | A sale or reassessment during the lease raises the tax pass through. | Can jump 20 to 40% |
Those last two rows are the main drawbacks of a triple net lease for a tenant: the yearly cost is not fixed, and a single tax reassessment can lift it sharply.
How much does an NNN lease cost over the full term?
Most commercial leases build in a 2 to 4% yearly rise on base rent. Three percent is a standard office figure; retail and industrial deals often run 3 to 5%.
| Lease year | Base rate per sq ft | Base rent | NNN charges | Total a year | A month |
|---|---|---|---|---|---|
| Year 1 | $22.00 | $44,000 | $12,000 | $56,000 | $4,667 |
| Year 2 | $22.66 | $45,320 | $12,000 | $57,320 | $4,777 |
| Year 3 | $23.34 | $46,680 | $12,000 | $58,680 | $4,890 |
| Year 4 | $24.04 | $48,080 | $12,000 | $60,080 | $5,007 |
| Year 5 | $24.76 | $49,522 | $12,000 | $61,522 | $5,127 |
| Five year total | $233,602 | $60,000 | $293,602 |
The worked example: 2,000 sq ft, $22 base rent with a 3% yearly rise and $12,000 of NNN charges held flat.
The escalation alone adds $13,602 over five years compared with a flat $22. NNN charges are held at today's level in the table because they track real bills; budget a margin above them if the lease has no CAM cap.
Commercial property managers: want to simplify the calls around lease modeling and reconciliation?
When reconciliation statements land, tenants pick up the phone: why the CAM line rose, when the credit arrives, who fixes the parking lot lights. Each call pulls someone off the spreadsheet. ServiceAgent answers those calls day and night, handles the routine questions, logs maintenance requests and books vendor visits, so your team spends reconciliation month on the numbers.
Book a free demoFrequently asked questions
Plain answers on NNN rates, shares, reconciliations and what a quote leaves out.
Book a free demoHow do you calculate a triple net lease rate?
Add the yearly NNN charges per square foot to the base rate. With $22 base rent and $6 of taxes, insurance and CAM per sq ft, the triple net rate is $28 per sq ft a year. Multiply by your square feet for the yearly cost and divide by 12 for the monthly payment.
What does $20 SF NNN mean?
The landlord wants $20 per square foot per year in base rent, and your share of property taxes, insurance and CAM comes on top. At $6 of NNN charges, 1,500 sq ft costs $39,000 a year, not $30,000.
What is the average cost of a triple net lease?
The NNN charges alone typically land between $3 and $16 per sq ft each year, depending on building class, age and market. Add that to the base rate quoted for the space to get the full cost per square foot.
What are the drawbacks of a triple net lease?
The tenant carries the cost risk. Taxes, insurance and maintenance can rise every year, a year end true up can bring a bill for the shortfall, and a reassessment after a sale can lift the tax share 20 to 40%.
What is a triple net (NNN) lease?
A lease where the tenant pays base rent plus a share of the property's real estate taxes, building insurance and common area maintenance. Those three costs are the three "nets".
How is tenant pro rata share calculated?
Usually leased square feet ÷ total leasable square feet. Some leases use rentable instead of usable area or set a negotiated share, so check the definition before you rely on the percentage.
Do NNN charges include capital expenditures?
Normally not. Capital expenditures and structural repairs, such as a new roof or HVAC system, are commonly excluded from CAM. Some leases allow the cost to be amortized and passed through with limits.
What are CAM caps and why do they matter?
A CAM cap limits how far CAM charges can rise each year, commonly 3% to 5%. It protects the tenant from a sudden spike, but taxes, insurance and utilities are often left outside the cap.
How do taxes and CAM get reconciled?
After the year closes, the landlord compares the estimated payments with actual expenses, typically within 90 to 180 days. The tenant pays any shortfall or receives a refund or credit for the excess.
Can NNN leases include management or administrative fees?
Yes, when the lease allows it. Admin fees are a negotiated percentage of operating costs, and management fees are usually a percentage of collected revenue. Enter the percentage in the calculator to see what it adds.
Should I include vacancy and collection loss in landlord net rent?
Yes, for underwriting. Vacancy loss is expressed as a percentage of gross potential rent and is one of the first deductions before effective gross income and NOI. The Landlord recoveries tab takes it as a percentage.
Does this NNN calculator work for retail, industrial and office?
Yes. The math is the same; the expense mix is not. CAM tends to run $3 to $6 per sq ft at retail strip centers, $1.50 to $3 in industrial buildings and $7 to $12 in multi tenant office, so enter each property's own figures.
Leads growth and product marketing for ServiceAgent at SaaS Labs, where he has worked in product marketing since 2020. Writes ServiceAgent's coverage of AI call answering, CRM and home services operations.
Published by ServiceAgent, the AI front office for home service teams. Estimates only. The signed lease decides how shares, recoverable expenses, caps, fees and escalations are defined, so check every figure against it. Not legal, tax or financial advice.