Triple Net (NNN) per square foot represents the annual cost of net expenses allocated to each square foot of a leased commercial property. This figure is derived by totaling the property’s annual operating expenses, including property taxes, insurance, and common area maintenance (CAM), and then dividing that sum by the property’s total rentable square footage. For instance, if a building’s annual NNN expenses are $50,000 and the rentable area is 10,000 square feet, the NNN per square foot is $5.00.
Understanding the expense per square foot provides transparency in lease agreements and enables accurate budgeting for tenants. It also allows prospective tenants to compare the relative cost of different properties, as NNN expenses can significantly impact the overall occupancy cost. Historically, tenants often overlooked these expenses, leading to unexpected costs and financial strain. A clear understanding facilitates more informed decision-making and predictable financial planning.
