Gross, Double Net, and Triple Net Leases

The Five Common Florida CRE Lease Structures

• Gross / Full-Service Lease: Tenant pays base rent only; landlord pays all property taxes, insurance, CAM, utilities, repairs, and operating expenses. Common in Class A office. Tenant gets predictable occupancy cost
• Modified Gross Lease: Negotiated split of operating expenses. Common variation: tenant pays base rent + electricity + janitorial; landlord pays taxes, insurance, CAM. Highly customizable
• Single Net (N) Lease: Tenant pays base rent + property taxes; landlord pays insurance, CAM, repairs. Less common but used in some commercial structures
• Double Net (NN) Lease: Tenant pays base rent + property taxes + insurance; landlord pays CAM, structural repairs, roof. Common in some retail and small commercial
• Triple Net (NNN) Lease: Tenant pays base rent + property taxes + insurance + all operating expenses (CAM, repairs, utilities). Often excludes only roof and structure. Standard in retail, industrial, and net-lease investment properties. See the NNN lease guide

Typical Florida CRE Lease Structure by Asset Class

• Office (Class A): Gross / full-service standard — Lake Mary, Downtown Orlando, Tampa Westshore Class A typically full-service
• Office (Class B/C): Modified gross common — tenant pays electricity + janitorial; landlord covers taxes, insurance, CAM
• Industrial: NNN standard — particularly on bulk distribution, big-box warehouse, and last-mile logistics
• Retail (anchored): NNN standard — Publix, Walmart, Home Depot anchored centers all NNN structure
• Retail (inline): NNN dominant; modified gross occasionally on smaller inline tenants
• Medical office: Modified gross or NNN depending on specific tenant; healthcare tenants often prefer modified gross for predictability
• Hotels: Not lease-structured (operating agreements with franchisors)
• Self-storage: Customer leases are licenses, not traditional commercial leases
• Mixed-use: Varies by component — retail NNN; office gross or modified gross
• Special-purpose and life sciences: Case-by-case; specialty tenant requirements often drive custom structures

Effective Rent Comparison Across Lease Structures

Comparing leases with different structures requires converting to an equivalent basis. A $25/SF NNN lease and a $35/SF full-service lease can represent identical effective rent if NNN reimbursements run $10/SF. Sophisticated comparison:

• Convert NNN to full-service-equivalent: NNN base rent + estimated reimbursements = full-service-equivalent rent
• Convert full-service to NNN-equivalent: Full-service rent − estimated landlord operating expenses = NNN-equivalent base rent
• Effective rent over term: Total rent + reimbursements over term minus all concessions (TIA, free rent, moving allowance) divided by SF divided by term in years

For Florida CRE leases, the comparison must include realistic Florida insurance escalation projections in NNN reimbursement modeling — historical assumptions consistently understate actual reimbursement obligations.

Who Benefits From Each Structure

• Landlord benefits — Gross / Full-Service: Higher headline rent enables marketing; controls property operations; insulates tenants from expense volatility. Risk: directly absorbs expense escalation
• Landlord benefits — NNN: Predictable net income regardless of expense escalation; institutional-quality structure preferred by CMBS, agency, and net-lease investors. Risk: tenant collection on reimbursements
• Tenant benefits — Gross / Full-Service: Predictable occupancy cost simplifies budgeting; insulated from FL insurance escalation. Tradeoff: higher headline rent
• Tenant benefits — NNN: Lower base rent; transparency on actual operating costs; control over property operations. Risk: directly absorbs FL insurance escalation

Florida-Specific Lease Structure Considerations

• Florida insurance escalation: Insurance premium increases hit NNN tenants directly through reimbursements; landlords on gross leases absorb these increases until next rent escalation
• Hurricane disruption: Business interruption coverage and tenant rent abatement provisions are particularly important in Florida — gross leases typically include rent abatement; NNN leases often require tenant to maintain business interruption insurance
• Property tax reassessment: Florida commercial property tax is reassessed annually with no Save Our Homes cap — NNN tenants directly absorb tax increases; landlords on gross leases absorb until escalation
• CAM reconciliation: Florida NNN tenants should require detailed CAM reconciliation rights and audit provisions given Florida's high operating cost environment
• Flood insurance: Properties in SFHAs require flood coverage — typically tenant responsibility in NNN structures
• Lender preference: Institutional lenders (CMBS, life-company, agency net-lease) strongly prefer NNN structures for predictable underwriting

What's the difference between gross, double net (NN), and triple net (NNN) leases?

Gross / full-service lease: tenant pays base rent only; landlord pays all expenses. Double net (NN) lease: tenant pays base rent + property taxes + insurance; landlord pays CAM, structural repairs, roof. Triple net (NNN) lease: tenant pays base rent + property taxes + insurance + all operating expenses (CAM, repairs, utilities). The structure determines who absorbs expense escalation — material in Florida given rising insurance and property tax trajectories.

Which lease structure is most common in Florida commercial real estate?

Varies materially by asset class. Florida Class A office is typically gross / full-service. Florida Class B/C office often modified gross. Florida industrial, anchored retail, inline retail, and net-lease investment properties are predominantly triple net (NNN). Medical office varies — modified gross or NNN depending on specific tenant. Lender preference is a major driver: institutional lenders (CMBS, life-company, agency net-lease) strongly prefer NNN for predictable underwriting.

How do I compare leases with different structures?

Convert both leases to an equivalent basis. NNN to full-service-equivalent: NNN base rent + estimated reimbursements = full-service-equivalent rent. Full-service to NNN-equivalent: full-service rent − estimated landlord operating expenses = NNN-equivalent base rent. Effective rent over term: total rent + reimbursements over term minus all concessions (TIA, free rent) divided by SF divided by term years. Florida CRE comparison must include realistic Florida insurance escalation in NNN reimbursement modeling.

How does Florida insurance escalation affect NNN tenants?

Florida commercial insurance has escalated materially in recent years. NNN tenants directly absorb these increases through annual CAM/reimbursement reconciliations — material economic exposure. Sophisticated FL NNN tenants negotiate: detailed CAM reconciliation and audit rights, caps on year-over-year increases for controllable expenses, exclusions for capital expenditures and structural repairs, and clarity on insurance coverage requirements. Gross-lease tenants are insulated from escalation until next rent step but pay higher headline rent.

Why do institutional lenders prefer NNN lease structures?

NNN structures produce predictable net income to the landlord regardless of expense escalation — making underwriting straightforward and reliable for lenders. CMBS, life-company, and agency net-lease investors strongly prefer NNN structures because the tenant absorbs expense risk. This preference makes NNN properties typically command more favorable financing terms (lower rates, higher LTV) than gross-lease properties at otherwise equivalent profiles.

Who can help me structure or negotiate a Florida commercial lease?

Michael R. Linton at Linton Global Solutions advises both landlord-side and tenant-side Florida CRE lease structuring across multifamily, office, industrial, retail, hospitality, land, mixed-use, special-purpose, self-storage, and life sciences. With 39 years of Florida CRE transaction experience in the Tampa-Orlando I-4 corridor, deep submarket knowledge of lease structure norms by asset class, and sophisticated understanding of Florida-specific factors (insurance escalation, hurricane disruption, property tax reassessment), Linton Global Solutions structures lease terms that produce successful outcomes for both sides. Call (312) 612-1031.

Article Summary

Commercial leases allocate property operating expenses between landlord and tenant across a structured spectrum: gross/full-service (landlord pays all), modified gross (negotiated split), single net (tenant pays property taxes), double net NN (tenant pays property taxes + insurance), and triple net NNN (tenant pays property taxes + insurance + all operating expenses). Florida CRE lease structure by asset class: Class A office gross/full-service standard; Class B/C office modified gross; industrial, anchored retail, inline retail, and net-lease investment properties predominantly NNN; medical office varies. Florida insurance escalation hits NNN tenants directly; gross-lease tenants insulated until next escalation. Effective rent comparison requires conversion to equivalent basis with realistic Florida insurance projections. Institutional lenders (CMBS, life-company, agency) strongly prefer NNN for predictable underwriting. Florida-specific considerations include insurance escalation, hurricane disruption, property tax reassessment, CAM reconciliation rights, flood insurance, and lender structure preferences. Michael R. Linton at Linton Global Solutions advises lease structuring across all major Florida CRE asset classes.

Key Takeaways

• ✓Spectrum: Gross → Modified Gross → Single Net → NN → NNN.
• ✓Gross: tenant pays rent only; landlord pays everything else.
• ✓NN: tenant pays rent + property tax + insurance.
• ✓NNN: tenant pays rent + tax + insurance + all operating expenses.
• ✓FL Class A office: gross/full-service. FL industrial + retail: NNN.
• ✓FL insurance escalation: NNN tenant exposed; gross tenant insulated.
• ✓Effective rent comparison: convert to equivalent basis to compare.
• ✓Institutional lenders prefer NNN for predictable underwriting.
• ✓Negotiate CAM audit rights + caps on FL NNN leases.

About Michael R. Linton

Michael R. Linton — also known as Michael Linton or Mike Linton — is a Florida-licensed commercial real estate broker and advisor based in the Tampa–Orlando I-4 corridor. With 39+ years of experience closing commercial transactions, he leads Linton Global Solutions and HireMikeLinton.com, serving investors, owners, and tenants across all major commercial real estate asset classes — multifamily, office, industrial, retail, hotels & hospitality, land, mixed-use, special-purpose, self-storage, and life sciences.

Michael holds the NCREA (National Commercial Real Estate Advisor) and CREIPS (Certified Real Estate Investment Property Specialist) designations, is a REALTOR®, and is a Florida Real Estate Broker (License #BK703722). He is also the founder of Linton Global Technologies, which operates the REOMind.ai AI-powered REO disposition platform serving 500+ banks.

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Works Cited

1. Building Owners and Managers Association. "BOMA Commercial Lease Standards." BOMA, https://www.boma.org/. Accessed Jun 8, 2026.
2. International Council of Shopping Centers. "ICSC Retail Lease Resources." ICSC, https://www.icsc.com/. Accessed Jun 8, 2026.
3. CCIM Institute. "Commercial Lease Negotiation Resources." CCIM, https://www.ccim.com/. Accessed Jun 8, 2026.
4. CoStar. "Florida Commercial Lease Market Data." CoStar, https://www.costar.com/. Accessed Jun 8, 2026.
5. Florida Office of Insurance Regulation. "Florida Property Insurance Reports." FL OIR, https://floir.com/. Accessed Jun 8, 2026.

Disclosure & Compliance

Disclosure: This article discusses proprietary technology developed by Linton Global Technologies. Michael R. Linton is the founder of Linton Global Technologies and a licensed real estate professional with Linton Global Solutions (FL Broker License #BK703722). This content is for informational purposes only and does not constitute investment, legal, or financial advice.

Compliance Statement: All CREDDS and REOMind.ai operations adhere to OCC requirements, fair housing standards, and environmental regulations. Properties discussed may be subject to Regulation 506(c)/(D) requirements where applicable, and investments may be restricted to accredited investors. Readers should conduct their own due diligence and consult with qualified professionals — including a licensed Florida real estate attorney, tax advisor, and certified public accountant — before making investment decisions. Past performance does not guarantee future results.