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Is a NNN lease really in the best interest of a landlord?

When it comes to renting commercial property, owners have numerous lease options. When determining the best option, an Orange County landlord might consider a NNN lease, also called a triple-net lease. However, some analysis is in order to make sure it turns out to be the best choice under the circumstances.

One of the primary negotiating points in a NNN lease is whether the owner pays for anything. Depending on the potential tenant, the landlord may not be responsible for the payment of repairs and maintenance, among other things. For instance, if the structure is used as a fast food restaurant such as KFC or McDonald's, the tenant will most likely pay for everything. The property owner may end up footing the bill for repairs to the structure and the roof, but nothing else.

The caliber of the tenant will often determine whether this type of lease, which may not bring in the money needed to make the deal worthwhile, often affects whether a NNN lease will work for a property owner. Real estate here in Orange County is expensive, just as it is in other parts of the state. The landlord's monetary obligations to the property need to be weighed against being able to take a more "hands off" approach with a tenant.

Determining the best type of lease for a particular piece of commercial property requires a thorough review of the financial implications connected to it. It may turn out that a different type of lease would better suit the circumstances and the needs of the landlord. In order to make that determination, it may be necessary to enlist some help from an experienced commercial real estate attorney.

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