What are NNN charges?

NNN charges are the pass-through costs a tenant pays on top of base rent in a triple net lease: a pro-rata share of the property's real estate taxes, building insurance, and common area maintenance (CAM). They are usually billed monthly as estimates and reconciled against actual costs after year-end.

Do NNN charges include property taxes?

Generally yes. Property taxes are one of the three nets, so a tenant's share of real estate taxes and assessments is typically part of NNN charges. Under most drafts, tax increases — including reassessment after a sale of the property — flow through to tenants.

What does the landlord pay in a triple net lease?

Typically the landlord's mortgage and financing costs, structural elements such as roof and foundation (though drafts vary), capital expenditures unless the lease amortizes them into pass-throughs, and the landlord's own income taxes and overhead. In an absolute net lease, by contrast, the tenant takes on effectively everything.

What is the difference between NNN and CAM?

CAM is one component of NNN. CAM covers shared operating and maintenance costs; NNN is CAM plus property taxes plus building insurance. The terms are often used loosely, so the lease's definitions and the actual bill determine what is being passed through.

What is the difference between NN and NNN?

In a double net (NN) lease the tenant pays base rent plus property taxes and insurance, with the landlord keeping maintenance. In a triple net (NNN) lease the tenant also pays common area maintenance. Single net adds only taxes; absolute net passes through effectively everything including structure.

What does PSF NNN mean?

It is the per-square-foot-per-year estimate of the NNN pass-through charges, quoted alongside base rent. A listing at $24/SF NNN with $8/SF pass-throughs costs an estimated $32 per square foot all-in — and because pass-throughs are estimates, the reconciled actual can differ.

NNN Charges Explained: What's Included, What the Landlord Still Pays, and NNN vs. CAM

A commercial listing that reads "$24/SF NNN" is really two numbers: the base rent, and the NNN charges stacked on top of it. The base rent is fixed in the lease. The NNN charges are estimated, billed monthly, reconciled annually, and defined — sometimes loosely — by the lease itself. This post covers what NNN charges typically include, what the landlord still pays, how NNN relates to CAM, and how the single/double/triple "net" labels differ.

As always: this is general, observational information about how these leases are commonly structured, not advice about yours. The legal judgment about what to do with it is yours.

What NNN charges are

In a triple net (NNN) lease, the tenant pays base rent plus a share of the property's three big operating cost categories — property taxes, building insurance, and common area maintenance (CAM). Those pass-throughs are the "NNN charges" (also billed as "NNN expenses," "triple net charges," or "additional rent"). Each tenant typically pays a pro-rata share based on the fraction of the building or center they occupy. For the full background on the three nets themselves, see our three nets explainer.

What NNN charges typically include

Property taxes. Real estate taxes and assessments on the building and land — so yes, NNN charges generally do include property taxes. Reassessments (for example, after the property sells) flow through to tenants under most drafts.
Insurance. The landlord's property and liability coverage on the building — separate from the tenant's own required policies.
CAM. The operating bucket: parking lot and landscaping, common utilities and lighting, trash, snow removal, security, property management, and repairs to shared areas. CAM definitions vary more from lease to lease than the other two nets combined.

Items that show up in some CAM definitions and not others — and that negotiated versions of these leases commonly exclude or cap — include management and administrative fees stated as a percentage of other costs, capital improvements, and reserves. Whether those belong in a given lease's NNN charges is set entirely by that lease's definitions.

What the landlord still pays in a triple net lease

"Triple net" does not mean the tenant pays everything. In a typical NNN lease the landlord remains responsible for:

Debt service. The landlord's mortgage on the property is never a tenant charge.
Structural elements. Roof, foundation, and exterior walls commonly stay with the landlord — though drafts differ, and some pass roof maintenance (versus replacement) into CAM.
Capital expenditures. Major replacements and improvements are commonly excluded from pass-throughs or amortized over their useful life rather than billed at once — another definition worth reading closely.
The landlord's own overhead. Income taxes, entity costs, leasing commissions, and costs of financing or selling the property.

The exception is the absolute net(or "bondable") lease, common in single-tenant deals, where the tenant genuinely takes on everything including structure and roof. If a lease is described as NNN but reads like the tenant owns every category of cost, it is worth confirming which form it actually is.

NNN vs. CAM: not the same thing

The two terms get used interchangeably in conversation, but CAM is one component of NNN. CAM covers the shared operating and maintenance costs; NNN is CAM plus property taxes plusinsurance. A lease quoted "plus CAM" may pass through only operating costs while the landlord keeps taxes and insurance — or the drafter may be using CAM loosely to mean all three. The bill and the lease definitions, not the label, say which one you have.

N vs. NN vs. NNN: the net ladder

Single net (N). Tenant pays base rent plus property taxes; landlord keeps insurance and maintenance.
Double net (NN). Tenant pays base rent plus taxes and insurance; landlord keeps structural and common-area maintenance.
Triple net (NNN). Tenant pays taxes, insurance, and CAM on top of base rent.
Absolute net. Tenant pays effectively everything, including structure and roof.

Compare that ladder with the gross lease — one all-in rent number, with the landlord absorbing operating costs — covered in our NNN vs. gross comparison. Most real-world leases sit somewhere between the pure forms, which is why the definitions matter more than the name on the cover page.

How NNN charges are billed: estimates, reconciliation, and "$X/SF NNN"

A quote like "$24/SF NNN, $8/SF pass-throughs" means the space costs an estimated $32 per square foot per year all-in — "PSF NNN" is simply the per-square-foot estimate of the pass-through charges. That figure is an estimate: most leases bill one-twelfth of projected annual NNN costs each month, then true it up after year-end. If actual costs ran higher than the estimate, the tenant owes the difference in a reconciliation bill; if lower, the tenant is credited. For worked numbers on what this does to the real cost of a space, see our triple net math breakdown.

Definitions that decide what the charges really are

The CAM inclusion list. Exactly which cost categories pass through, and which are excluded. Negotiated versions of these leases commonly carry an explicit exclusion list (capital items, leasing costs, costs reimbursed by insurance).
Caps on controllable costs. A common negotiated alternative caps year-over-year growth of controllable CAM (management, landscaping, services) while leaving taxes and insurance uncapped.
Administrative fees. Whether a management/admin fee is added as a percentage on top of other costs, and on which base it is calculated.
Reconciliation and audit rights. How soon after year-end the reconciliation arrives, how long the tenant has to review it, and whether the lease grants a right to audit the landlord's books.
Pro-rata share mechanics. How the share is calculated, and what happens to it when the building is partly vacant — some drafts gross up costs to full occupancy, which changes each tenant's bill.

How to use this

Read the definitions of "operating expenses" or "CAM," the reconciliation section, and any exclusion list side by side with the quoted NNN estimate. The gap between a loosely defined and a tightly defined NNN clause — on the same building, at the same quoted rate — can be the difference of several dollars per square foot per year. Leases with heavy, loosely bounded pass-throughs are commonly reviewed by counsel before signature. What you do with that information is your call.