An Absolute Net Lease, also known as a “triple net lease” or “NNN lease”, is a type of commercial real estate lease agreement in which the tenant is responsible for all the property’s associated costs. This includes not only the usual rental payments but also all real estate taxes, building insurance, and maintenance costs.
Under this arrangement, the landlord is essentially relieved of all financial obligations related to the property, making the tenant the de facto owner for the duration of the lease term. The tenant has to bear all costs related to operating, maintaining, and repairing the property. Hence, the name “absolute”.
This type of lease is most commonly used in commercial real estate, particularly for standalone buildings and large commercial or industrial properties. They are favored by landlords and long-term tenants who wish to have full control over the property’s operation without legal ownership. However, this lease’s specifics should be carefully reviewed as the tenant’s responsibilities can be quite extensive.