Quick Answer: Triple net (NNN) leases shift property taxes, insurance, and maintenance costs to tenants alongside lower base rent, while gross leases bundle these expenses into a higher all-in rent paid by the landlord. Choose based on your need for budget certainty versus cost control and your comfort managing variable expenses.
A triple net (NNN) lease is a commercial lease where the tenant pays base rent plus their share of property taxes, insurance, and maintenance, while a gross lease bundles most of those costs into a single rent payment handled by the landlord. This guide is for Franklin business owners and investors weighing which structure fits their budget and risk tolerance.
A triple net lease is a lease in which the tenant covers three categories of property expenses on top of base rent: property taxes, building insurance, and common area maintenance (often shortened to "CAM"). The "net" refers to the landlord receiving rent that is net of those operating costs.
In practice, you'll see a lower base rent quoted on a NNN space, then a separate per-square-foot estimate for the net charges. A Franklin retail space advertised at $22 per square foot might carry an additional $7 to $9 in NNN charges, putting your true occupancy cost closer to $30.
The reason that structure dominates retail and many commercial corridors around Cool Springs and downtown Franklin is predictability for the owner. The landlord passes through variable costs rather than absorbing them, which keeps base rent steadier over the lease term.
A gross lease is one where the tenant pays a single, all-in rent figure and the landlord covers property taxes, insurance, and most building expenses out of that amount. Your monthly number stays the same regardless of whether the property tax bill rises or the roof needs work.
Most gross leases in Franklin are actually "modified gross," meaning a few costs get split. A common arrangement: the landlord covers taxes, insurance, and structural maintenance, while the tenant pays their own utilities and janitorial. Office space in multi-tenant buildings frequently uses this structure.
The trade-off is simplicity for the tenant and a higher built-in base rent for the landlord, who is pricing in expected expenses plus a cushion for the unknowns.
Neither structure is automatically cheaper — it depends on how the property's actual expenses shake out over the term. A NNN lease can look like a bargain on the base rent line and end up costing more once net charges climb. A gross lease can feel expensive upfront but protect you from surprise increases.
Here's how the two compare on the points clients ask about most:
| Factor | Triple Net (NNN) | Gross / Modified Gross | |---|---|---| | Base rent | Lower | Higher | | Who pays taxes & insurance | Tenant | Landlord | | Maintenance responsibility | Tenant (often including CAM) | Landlord (structural) | | Monthly predictability | Variable | Stable | | Common property types | Retail, freestanding, industrial | Multi-tenant office | | Budgeting effort | Higher | Lower |
The honest answer we give clients is that you can't compare two spaces on base rent alone. You have to load the net charges onto the NNN option before you put the numbers side by side.
Ask exactly what's included in the net charges and how they're calculated. CAM is where surprises hide, and the language varies from building to building. A few questions worth raising before you commit:
Reading the operating-expense clause closely matters as much as the rent. The U.S. Small Business Administration's guidance on leasing commercial space is a useful starting point for understanding how lease obligations affect a business budget.
Williamson County reassesses property values on a cycle, and when assessments rise, NNN tenants feel it directly through the tax pass-through. Gross-lease tenants don't see that line item — the landlord absorbs it, though it may influence rent at renewal.
This is one reason out-of-area tenants are sometimes caught off guard. A NNN lease signed in a year of stable assessments can carry meaningfully higher net charges after a reassessment. If you're leasing in a fast-appreciating corridor heading into Summer 2026, ask your agent how recent assessment trends have affected net charges in comparable buildings.
Choose based on how much budget certainty you need versus how much control you want. A NNN lease tends to suit tenants who want a lower entry rent and are comfortable managing variable costs — established businesses, franchises, and operators who track expenses closely. A gross lease tends to suit tenants who value a fixed monthly number and don't want to manage building expenses — smaller offices, newer businesses, and anyone budgeting tightly.
For landlords and investors, the calculus flips. NNN structures shift expense risk to the tenant and produce cleaner net income, which is why they're popular with investors buying commercial property in Franklin and surrounding Williamson County.
At Redbird Real Estate, our work focuses on Franklin commercial leasing on both sides of the table — landlord and tenant representation — so we read these clauses the way the other party will. The goal is making sure the number you sign for is the number you actually live with.
The smartest move before signing either type is to model your full occupancy cost over the entire term, not just year one. A space that looks affordable on the quoted rent can shift once net charges, escalations, and reconciliation are layered in — and that full picture is what should drive your decision.
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