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N Houston Industrial Update: May 11th

As NNN leases are becoming more popular in the commercial real estate space. It is important to be aware of the advantages and disadvantages each different lease models can provide to both Landlords and Tenants, and how you can leverage this information to obtain the best deal possible.

NNN (Triple Net): Tenant is responsible for rent plus all of the operating expenses of the property percentage of rentable area leased (Pro-Rata Share) E.g. Taxes, Insurance, Maintenance, utilities

FG (Full Gross): Tenant is responsible for rent and nothing else. Rental rates may be higher to account for the expenses being taken on by landlords.

MG (Modified Gross): Tenant is responsible for rent as well as a specified cost: Rent + Taxes, Rent + Utilities, Rent + Maintenance. This can be arranged during lease negotiations.

This article by Tyler Cauble goes into more depth into the advantages and disadvantages of the different lease models and how you can benefit from it. ​​​​​​

Best,

Felix Galan
Brokerage Associate
713.332.8216
felixg@belvoir.net
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