Rant: Triple net leases are way overrated compared to gross leases

I spent 3 years managing a 12,000 sq ft office in Denver under a triple net lease and got hammered with surprise roof repairs and parking lot resurfacing costs totaling $47,000. Switched to a full-service gross lease for my new space in Austin and now I pay one flat number every month with zero surprises. Has anyone else had the same experience with triple nets eating into their margins?

2 comments

2 Comments

rivershah3d ago

You said triple nets ate into your margins but that $47k hit is nothing compared to what you would have paid in a gross lease over 3 years. Landlords build every possible cost into that flat rate plus they add their profit on top. With a triple net you only pay for actual expenses and you get to see exactly where your money goes. Property taxes, insurance, and maintenance are just part of owning real estate and if you plan for them they are totally manageable. Gross leases just hide those costs in higher base rent so you end up paying for the landlord's other tenants' problems too. You got burned once but that doesn't mean the system is broken.

reed.ray3d ago

Funny how nobody sees the hidden fees until they actually have to pay them.