Quadruple Net Lease
As the name suggests, in quadruple net lease, the tenant has the responsibility to pay for four things. These are property taxes, insurance costs, common area maintenance costs and utilities. In addition, the tenant also pays the landlord money towards the rent and some operational expenses. |
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Depending on the wordings of the lease, the lease can either be net lease or quadruple net lease. The difference between a net lease and quadruple net lease is simple. In a net lease, the tenant has the onus to pay the rent in addition to the operating expenses of the commercial property, real estate taxes, insurance and utilities.
When it comes to multi-tenant building, a quadruple lease will be different from one signed by a single tenant building. In a multi-tenant building, the different leases will not be for more than 7 years, and the landlord has the responsibility to juggle different starting and ending dates of the leases.
It has been seen that owners, who opt for quadruple net lease, are the ones who already owned some type of commercial real estate, but are now looking for some form of an investment that requires less supervision on their part. This is especially true for real estate investors, who previously had high maintenance commercial properties. This way their maintenance cost is reduced while they still make profit from owning a commercial real estate. This option of leasing is popular among different types of real estate investors; starting from large institutional buyers to high net worth individuals.
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