If you’ve ever rented commercial space before, you know that not all leases are created equal. There are several kinds of lease structures that landlords use to enter into rental agreements with tenants, and each one has its own pros and cons for both landlord and tenant.
At withco, our lease agreements are “triple net” (or “NNN”) but they are different than most NNN leases in two majorly specific ways:
Below, we break down exactly what a triple net lease means, the difference between triple net leases vs. other lease structures, and why withco uses the triple net lease structure to help prepare our partners for property ownership.
Types of lease structures
Before you can understand what a triple net lease is, it’s important to understand the different types of leases that exist out there. There are typically three types of lease structures for commercial properties:
Definition of a triple net lease
At the most basic level, a triple net lease is a type of net lease wherein the tenant is responsible for covering three additional operating expenses in exchange for a lower base rent: property taxes, utilities, and maintenance expenses.
Triple and double net leases (where the tenant pays property taxes and utilities in addition to rent) are fairly common in the commercial real estate world. This is why small business owners who already operate with NNN leases make great future withco partners and are much more likely to qualify.
Benefits of triple net lease
Triple net leases might seem like a lot of expenses to cover, but there are many reasons it has become the near universal standard for commercial real estate leases.
withco’s triple net lease-to-own model
This is where withco makes a huge difference in the triple net lease structure. Instead of simply paying all the expenses that a property owner would pay with no financial benefit, small business owners can now earn their way to property ownership with our lease-to-own model.
On a withco triple net lease, our partners earn a down payment credit over the course of five years and have the option to purchase the property at the end of the lease term. If you’re already paying into a NNN lease, a withco partnership is a no-brainer—you could be turning one of your largest operating expenses into a real investment, and reap the financial benefits of property ownership in as little as five years.
If you’re not on a triple net lease, we’ll walk you through the exact costs to expect—chances are, you’re paying a premium on rent to cover these costs already. We’ll never stick you with costs you can’t afford.