OnSumoTools

Lease Cost Comparator (NNN vs Gross)

Compute the true all-in occupancy cost of a Triple Net (NNN) lease versus a Gross lease over your full lease term, including base rent escalations, NNN expense pass-throughs, tenant improvement allowances, and free rent periods. Enter the terms of both lease options to see the numbers before you sign. Everything runs in your browser with no data stored or transmitted.

Lease A (NNN)

Lease B (Gross)

Included in gross rent

Unchecked items should be added in excluded expenses below.

NNN lease winsSaves $35,237 over the term

NNN total occupancy

$247,408

Gross total occupancy

$282,645

NNN avg monthly

$4,123

Gross avg monthly

$4,711

NNN effective $/sqft/yr

$24.74

Gross effective $/sqft/yr

$28.26

Year-by-year comparison

YearNNNGrossDifference
1$43,333$51,333-$8,000
2$53,560$57,680-$4,120
3$55,167$59,410-$4,244
4$56,822$61,193-$4,371
5$58,526$63,028-$4,502

In a triple net (NNN) lease you pay base rent plus your share of property taxes, insurance, and common area maintenance (CAM). Those pass-through costs can rise even when base rent is flat.

This is a financial comparison tool, not legal advice. Have your lease reviewed by a commercial real estate attorney.

How does the NNN vs Gross Lease Cost Calculator work step by step?

For each lease, the calculator computes base rent per year (base rate per sqft times footage, compounded by the annual escalation), adds NNN expense pass-throughs for NNN leases, and zeros out any months within the free rent period. Tenant improvement allowances are subtracted from the total at the end. The result is a side-by-side total occupancy cost, a year-by-year cost table, and the average monthly and effective per-sqft rate for each option.

What does a typical NNN vs Gross Lease Cost Calculator result look like?

2,000 sqft, 5-year term. NNN: $18/sqft base plus $8/sqft NNN, 3% escalation, 2 months free rent, $20,000 TI. Gross: $28/sqft all-in, 3% escalation, 1 month free rent, $10,000 TI. After netting TI and free rent, total 5-year NNN cost is approximately $222,000 and gross approximately $240,000, making NNN the winner in this scenario. The year-by-year table shows when costs cross if NNN pass-throughs spike beyond the 3% escalation assumption.

Frequently asked questions

  • What is a Triple Net (NNN) lease?

    In a Triple Net lease, the tenant pays base rent plus a proportionate share of three property expenses: property taxes, building insurance, and common area maintenance (CAM). Base rent appears lower than a gross lease, but the total cost is often similar because the NNN expenses add to the monthly bill.

  • What is a Gross lease?

    A Gross lease bundles property taxes, insurance, and maintenance into the base rent. The tenant pays one fixed amount per month and the landlord handles the variable operating costs. Gross leases offer cost predictability; the risk of expense increases falls on the landlord rather than the tenant.

  • Which lease type is better for tenants?

    A Gross lease offers predictability: your monthly payment does not change when the landlord gets a tax reassessment or replaces the roof. An NNN lease can cost less if the landlord's actual expenses are lower than the gross lease premium, but expense spikes create surprise bills. This calculator lets you compare based on your specific quote.

  • What is a tenant improvement allowance?

    The landlord's contribution toward your build-out costs. A $20,000 TI allowance means the landlord pays $20,000 toward walls, flooring, fixtures, or other improvements. A higher TI effectively reduces your net occupancy cost but may be reflected in higher base rent. This calculator subtracts TI from total cost for an accurate comparison.

  • What does free rent mean in a lease?

    Free rent (also called rent abatement) means you pay no base rent for a specified number of months at the start of the lease, typically 1-3 months. It is used as an incentive to sign. Free rent reduces your total cost but may not apply to NNN expenses or operating costs during that period.

  • What are CAM charges in an NNN lease?

    Common Area Maintenance charges cover the cost of maintaining shared areas: parking lots, lobbies, landscaping, elevators, and hallways. CAM charges can vary year to year. Some leases cap annual CAM increases; always negotiate a CAM cap before signing an NNN lease to limit exposure to sudden expense increases.

Related tools

Two leases, two very different bills

A commercial lease can look cheap on paper and cost a lot more once extras arrive. A gross lease usually bundles most costs into one rent. A triple net lease, or NNN, has a lower base rent but you also pay your share of property tax, insurance and maintenance.

The comparator adds it all up so you can see the true cost of each over the full term, not just the monthly rent in the brochure.

How to read the results

Enter the space size, base rent per square foot, yearly rent increases and the lease length. For the NNN side, add the estimated extra charges per square foot. The tool builds a year-by-year table and a chart of cumulative cost.

Watch the lines on the chart. Sometimes the NNN lease starts cheaper and crosses over later as taxes and upkeep rise. Other times it stays below the entire way. The crossover year is often the most useful thing to know.

Tenant improvements and free rent

Landlords often sweeten a deal with a tenant improvement allowance, which is money toward building out your space, or with a few months of free rent. Both reduce your real cost.

Add them in and the totals shift. A strong allowance can make a pricier lease the better pick. Just check what the allowance covers and when it's paid, since terms differ.

  • Free rent often applies to base rent only, so NNN charges may still be due
  • Ask if the allowance is paid up front or reimbursed after you build
  • Check if unused allowance is lost or credited back

Things the model can't see

Operating costs under NNN are estimates and they can climb. A new roof, a tax reassessment or a jump in insurance can hit you with little warning. Ask the landlord for the last three years of actual charges and look for caps on increases.

Also look at who handles repairs, how common-area costs are split and whether you can audit the bills. These terms matter as much as the rent.

Who tends to prefer which

A tenant who wants a predictable monthly cost often leans gross. A tenant who plans to stay long, wants control over the space and can handle some variation may be fine with NNN, especially if the base rent is much lower.

There's no universal winner. Your own numbers decide.

This is a planning aid, not legal advice. Have a lawyer or broker read the actual lease before signing. Your inputs stay in your browser.