¿why triple net (NNN)?

 The term of US origin refers to a lease structure called '' Net, Net, Net '', which is common for a lease agreement on industrial properties. In it the tenant or tenant is responsible for the payment of insurance, taxes (property) as well as maintenance of facilities and common areas. There are a number of important points to consider regarding Triple Net leases.

The ''Pros'' of NNN

For the Landlord

Ease in property management: The owner will avoid running costs of maintenance and repairs by not knowing fully the impact that the operations of the tenant may have on the property, in addition to the prevention of being covered by a loss that is not detailed in the general conditions of a property insurance policy, due to the lack of detailed knowledge of the risks of the tenant's operations. Basically be free of responsibility for the usual obligations of a property owner. 

For the Tenant

It has better management of operating expenses: The tenant can first take care of the most essential, such as taxes and insurance, to later take over the maintenance of the property and repairs of the parts that have the greatest impact on their operations, thanks to this, we have transparency in budgets and optimizes decision making. In addition, the greatest benefit for the tenant is that the amount charged by the lessor is lower and as the case may be the capitalization rate of the lease may be lower. 

The''Cons'' del NNN

For the Landlord

It could be considered as a possible disadvantage the need to be more systematic in terms of the evaluation of the tenant interested in your property to maintain the expense and charge properly, likewise represents a risk the possibility of broken bank of the landlord since in any In the long term, economic or market conditions may change enough to turn a company from profitable to insolvent. 

For the Tenant

There is a need to know and carefully review the costs that are going to be generated in the property in question, as well as the frequency in the increase of these expenses and the risk represented by the inflation of the market in which it is located, becoming a variable which can be considerable, speaking financial terms. 

 

 


NNN leases are a valuable tool for the development of leases in the industrial sector because they represent a variety of options and can provide protection against inflation, as well as represent a fiscal relief for both parties. A Triple Net lease is an excellent option to generate a transaction on a property free of complications and always with transparency for both parties.