From the course: Introduction to Commercial Real Estate Analysis

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Types of commercial leases

Types of commercial leases

From the course: Introduction to Commercial Real Estate Analysis

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Types of commercial leases

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- [Instructor] In this lecture, we're going to look at the most common types of commercial leases. We're going to look at what's called the full service lease, or a full gross. Net leases, we're going to look at single net, double net, and triple net. We're going to look at modified gross, a percentage lease, and a ground lease. So, let's first look at the full service gross lease. So, these are the leases where the tenant pays for, basically, one all inclusive base rent. They make one payment to the landlord and the landlord takes care of the payments for maintenance, taxes, and insurance directly. Now, typically, utilities and janitorial services are also included in this payment. So, it's one, single, easy, predictable rent payment. It's very, very tenant friendly. But it doesn't mean that the landlord is paying for all of those additional expenses. What is commonly done is that there's also something called a load factor that ultimately increases the rentable square footage that…

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