The phrase "triple net" appears in the majority of commercial leases across South Florida — and it is one of the most misunderstood terms in the industry. Many tenants sign NNN leases without fully understanding what they have agreed to pay, and then face significant surprise costs when their first annual reconciliation arrives.
This guide explains what a triple net lease actually means, what it costs tenants in South Florida, and what you can negotiate to protect yourself before signing.
What Does "Triple Net" Mean?
In a triple net (NNN) lease, the tenant pays base rent plus three additional categories of building operating expenses: property taxes, building insurance, and common area maintenance (CAM). These three categories are the "three nets."
The logic behind NNN leases is simple: the landlord is passing through the actual costs of owning and operating the building to tenants proportionally. If the building has 20,000 SF of rentable space and you lease 2,000 SF, you pay 10% of the building's property taxes, insurance, and maintenance costs.
The result is that your monthly payment in an NNN lease has two components: a fixed base rent and a variable NNN charge. The NNN portion can change year to year — and in recent years in South Florida, it has changed considerably.
What's Actually in the "Three Nets"?
Net #1: Property Taxes
Your pro-rata share of the building's annual property tax assessment. In Florida, property taxes are assessed by county and have been increasing significantly as property values have risen. Broward County commercial property tax rates in 2026 represent a meaningful per-square-foot cost for tenants — and unlike base rent, they are not negotiated down. They are passed through at actual cost.
Important caveat: if a property sells, it typically triggers a reassessment at the new purchase price. If your landlord recently acquired the building, your tax obligations could increase substantially mid-lease. Look for tax assessment cap language in the lease to protect against this.
Net #2: Building Insurance
Your share of the landlord's property and casualty insurance for the building. South Florida insurance costs have increased dramatically since 2022 due to hurricane risk repricing, reinsurance market contraction, and several carriers exiting the Florida market entirely. Building insurance costs that were $1–$2/SF annually are now $3–$5/SF or more in many commercial buildings — a cost that passes directly through to tenants in NNN leases.
South Florida-specific risk: Insurance cost escalation is one of the most significant and underappreciated occupancy cost risks for commercial tenants in South Florida. Always ask for the building's current insurance premium — and the trend over the past three years — before you sign.
Net #3: Common Area Maintenance (CAM)
This is the broadest and most variable of the three nets. CAM covers the costs of maintaining all common areas of the building and property: parking lot maintenance and resurfacing, landscaping, exterior lighting, lobby and common corridor upkeep, elevator maintenance, property management fees, and similar expenses.
CAM is also where landlords have the most discretion — and where the most abuse occurs. Without protective lease language, landlords can include management fees, capital expenditures, and one-time costs in annual CAM reconciliations.
What Does NNN Actually Add Up To in Broward County?
In the current South Florida market, combined NNN charges (taxes + insurance + CAM) typically add the following on top of base rent:
- Retail centers: $10–$16/SF annually
- Office buildings: $9–$15/SF annually
- Industrial/warehouse: $3–$7/SF annually
On a 3,000 SF retail space with base rent of $35/SF and NNN of $13/SF, your actual monthly payment is approximately $12,000 — not the $8,750 that base rent alone would suggest. This gap catches many tenants by surprise.
What You Can Negotiate in an NNN Lease
The NNN structure itself is rarely negotiable in multi-tenant commercial buildings. But the way NNN charges are calculated, capped, and reconciled absolutely is.
CAM Caps
A CAM cap limits how much your NNN charges can increase from year to year — typically 3–5% annually. Without a cap, your NNN charges can increase 15–20% in a single year if insurance premiums spike or the landlord does a major parking lot repave. Caps are standard in well-negotiated leases and well worth the effort to secure.
CAM Exclusions
Push for explicit exclusions from your CAM obligations, including: capital expenditures and major repairs (roof replacement, HVAC replacement), depreciation on any building systems, management fees above a defined percentage, leasing commissions, and costs relating to other tenants' spaces.
Audit Rights
The right to audit the landlord's actual operating expense records annually. Without this, you have no way to verify that the NNN charges billed match actual costs. Audit rights are standard in institutional leases and should be standard in yours.
Gross-Up Provisions
For multi-tenant buildings, landlords often "gross up" operating expenses to a 95% or 100% occupancy level — meaning they calculate what expenses would be if the building were fully occupied, even if it isn't. This can work for or against you depending on the specific expense category. Understand how gross-up applies in your lease before signing.
NNN vs. Modified Gross vs. Full Gross: The Spectrum
Not every commercial lease is NNN. Understanding where your lease falls on the expense responsibility spectrum matters for total cost budgeting:
- Full NNN: Tenant pays base rent + taxes + insurance + CAM. Most retail and industrial leases.
- Modified gross: Some operating expenses are included in base rent, others are passed through. Common in office leases — terms vary widely.
- Full gross: Base rent includes all operating expenses except utilities. Landlord absorbs tax and insurance variability. Less common, but exists in some office buildings.
When comparing spaces, always request the estimated gross occupancy cost — not just the base rent — to do an apples-to-apples comparison between NNN and gross lease structures.
The Bottom Line
Triple net leases are standard in South Florida commercial real estate and are not inherently unfavorable to tenants. What matters is whether you understand what you are agreeing to pay, whether your NNN exposure is capped and protected by appropriate lease provisions, and whether you are benchmarking the landlord's NNN estimates against comparable buildings before you sign.
An experienced tenant representative will review every NNN provision in your lease, benchmark your estimated charges against comparable buildings in the same submarket, and negotiate caps and exclusions before you commit. It is one of the more technical but financially significant parts of the lease review process.
