Question 1

What is a NNN (triple net) commercial lease?

Accepted Answer

A triple net (NNN) lease requires the tenant to pay base rent plus three additional expenses: property taxes, building insurance, and maintenance. On a 2,000 sq ft NNN lease at $30/sq ft base, you might pay an additional $5–$10/sq ft in NNN charges, bringing total occupancy cost to $35–$40/sq ft or $5,833–$6,667/month.

Question 2

How do I negotiate a commercial lease?

Accepted Answer

Key commercial lease negotiation points: rent-free period (1–6 months for buildout), tenant improvement allowance ($20–$75/sq ft in many markets), personal guarantee limitations (1–2 years vs. full term), early termination rights, and renewal option pricing. Always negotiate — landlords expect it, especially in higher-vacancy markets.

Question 3

What percentage of revenue should go to commercial rent?

Accepted Answer

Industry benchmarks for rent as a percentage of revenue: retail 5–10%, restaurants 6–10%, office/professional services 5–8%, medical 4–6%, gyms and fitness 8–12%. If your rent exceeds 12–15% of projected revenue, your business model needs to either generate higher revenue per square foot or find cheaper space.

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