Triple-Net Lease (NNN)
A triple-net lease is a lease where the tenant pays property taxes, insurance, and maintenance on top of rent, giving the owner predictable, low-touch income.
Definition
A triple-net lease (NNN) is a commercial lease structure in which the tenant is responsible for the three main property expenses, property taxes, building insurance, and maintenance, in addition to base rent. The landlord receives rent that is largely free of operating costs, hence net, net, net.
NNN leases are common with single-tenant properties leased to creditworthy national tenants, think pharmacies, dollar stores, or fast-food chains, often on long terms of 10 to 25 years with scheduled rent increases. This produces predictable, largely passive income, which is why many DSTs hold NNN-leased assets.
For a 1031 or DST investor, a triple-net structure is appealing because it minimizes management and expense volatility. The main risks are tenant credit (if the tenant fails, income stops) and concentration in a single property or tenant, so lease term, tenant quality, and location remain central to evaluating an NNN investment.
Key points
- Tenant pays taxes, insurance, and maintenance plus rent
- Common with single-tenant, long-term commercial leases
- Produces predictable, low-management income
- Main risk is tenant credit and single-tenant concentration
Related terms
Jerry Baker founded Baker 1031 Investments to help exchange investors move from active property ownership into passive, institutional-quality real estate through DST, 721 exchange, mineral royalty, and Opportunity Zone strategies. He holds the FINRA Series 22 and Series 63 registrations and the Securities Industry Essentials (SIE) qualification. Read full bio →
Reviewed by the Aurora Securities, Inc. compliance team — Aurora Securities, Inc., member FINRA/SIPC. Last reviewed July 2026. Securities are offered through Aurora Securities, Inc.; Baker 1031 Investments, LLC is independent of Aurora Securities, Inc.
This glossary entry is educational and is not investment, tax, or legal advice, or an offer to sell or a solicitation to buy any security. Definitions are general and may not reflect your specific circumstances — consult your own CPA and attorney. Past performance does not guarantee future results.