Types of Commercial Leases Every Tenant Should Know

So, folks, are you stepping into the world of commercial real estate—exciting stuff! Whether you’re eyeing that sleek office space, a buzzing retail shop, or a cool mixed-use property, there’s one big truth you need to know right off the bat:

👉 Not all leases are created equal.

Some leases might look simple at first glance, but once you dig into the fine print—bam!—you’re dealing with extra costs you didn’t expect, or obligations you didn’t plan for. From triple net leases to full-service agreements and everything in between, each one affects your bottom line differently. That’s why we’re breaking it all down for you—in plain English. No confusing legal jargon. Just real talk about:

• What each lease type really means
• What you’ll be responsible for paying
• How it affects your monthly budget and future profits
• And which type might be best for your business goals

Let’s get into it—because signing the wrong lease could cost you more than just rent.

What Is a Commercial Lease?

Before we dive headfirst into the leasing lingo, let’s start with the basics.

A commercial lease is a legally binding agreement between a landlord (the property owner) and a business tenant (that’s you!) to rent out a non-residential space—like an office, retail store, warehouse, or mixed-use property. Or, if you’re feeling a little French about it: ‘’locaux commerciaux in the world of immobilier commercial’’

But here’s where it gets interesting…

Unlike residential leases, commercial leases come in different “flavors”—and each one spells out who’s responsible for what in terms of money and maintenance. That means your monthly rent might not be the only bill on the table.

Here’s what can be included:

• Base Rent: Your fixed monthly payment for using the space.

• Operating Costs: Think utilities, repairs, janitorial services—basically, the cost to run the building.

• Property Taxes & Insurance: In some lease types, these are passed on to you, the tenant.

• Maintenance Fees (CAM): Covers upkeep of shared spaces like lobbies, elevators, and parking lots—also known as Common Area Maintenance.

🔍 Quick Reality Check:
Not knowing what’s in your lease can lead to surprise expenses—and trust us, that’s not the kind of surprise you want as a business owner. So now that you know what a commercial lease is, let’s look at the different types—because picking the wrong one? That could seriously throw off your budget.

Why Understanding Lease Structures Matters?

Credit: chuckberger.com

Signing a lease without knowing the details? That’s risky. You might think you’re just paying rent, but then get hit with surprise bills. Here’s why understanding your lease matters:

• You could be charged for things like snow removal, shared area cleaning (CAM fees), building insurance, and property taxes
• Different lease types mean different cost responsibilities—some put more on you, some less
• Not knowing the structure can mess up your budget and profit margins
  You need to know what you’re really paying for—not just the monthly rent

Hence, understanding lease types helps you avoid hidden costs and make better business decisions. Let’s check out the most common ones next.

Navigating the Lease Maze: 5 Types You Need to Know

Credit: businesspost.ie

Before you sign on the dotted line, it’s key to understand what kind of lease you’re getting into. Each type of commercial lease affects your costs, responsibilities, and flexibility in different ways. Up next, we’ll break down the 5 most common lease types—from all-inclusive options to ones where you’re covering almost everything—so you can pick the one that actually works for your business.

1. Full Service Lease (Also Known as a Gross Lease)

Perfect for: Office buildings, coworking spaces, and shared professional setups.

A Full Service Lease is the most all-inclusive option out there. The landlord bundles nearly all property-related expenses into one monthly rent payment. That means fewer surprises and easier budgeting for your business.

🔒 What’s typically included in your rent?

• Base rent
• Property taxes
• Operating expenses
• Utilities (electricity, water, heating/cooling)
• CAM (Common Area Maintenance) fees

💡 Think of this as the all-inclusive resort of commercial leases. You just pay your rent, and the landlord takes care of the rest. Great for tenants who want predictable monthly expenses without extra costs popping up.

2. Net Leases (Three Types to Know)

Common in: Retail, industrial spaces, and freestanding buildings.

Net leases pass more responsibility to you—the tenant. The more “nets” involved, the more you’ll be expected to pay beyond base rent.

🔹 Single Net Lease (N)

• You pay:

• • • Base rent
    • Property taxes
      

• Landlord pays:

• • Property insurance, CAM, and general maintenance.

🔸 Double Net Lease (NN)

• You pay:

• • Base rent
  • Property taxes
  • Property insurance
• Landlord pays:
  • CAM and repairs.

🔺 Triple Net Lease (NNN)

• You pay:
  • Base rent
  • Property taxes
  • Property insurance
  • CAM (Common Area Maintenance)
  • Repairs and upkeep

💡 Triple net leases often offer lower rent but come with higher variable costs. They work well if you want more control over the property—but you also take on more financial risk.

3. Percentage Lease

Best for: Shopping malls, retail stores, restaurants.

This type of lease includes:

• A base rent, plus
• A percentage of your monthly gross sales (after hitting a certain revenue threshold)

💡 This structure aligns the landlord’s income with your success. If you sell more, you pay more. It can be smart if you want lower upfront rent while you’re getting established, but keep in mind your rent could grow with your sales.

4. Modified Gross Lease

Great for: Office buildings, coworking spaces, and flexible lease arrangements.

This lease type splits costs between you and the landlord. It combines aspects of gross and net leases, offering a more tailored experience.

• You pay:

• Base rent

• • • Some operating expenses (like janitorial or utilities)
      

• Landlord pays:

• • The remaining expenses (taxes, insurance, etc.)

💡 Modified gross leases are popular because of their flexibility and fairness. They give tenants a more predictable monthly cost while still sharing some responsibilities.

5. Mixed Use Lease

Perfect for: Buildings that combine residential and commercial units—like a boutique with apartments above or a coffee shop beneath condos. In these settings, lease agreements can blend both commercial lease terms and residential elements, depending on the part of the building you’re renting.

What to expect:

• Rules may vary based on zoning laws
• Lease terms might combine business responsibilities with residential protections
• These properties are common in urban developments and downtown areas

💡 Mixed use leases are flexible and work well in live-work environments or growing city spaces. Just be sure to read the fine print—since these leases often require balancing two worlds.

Expense Stop, Base Year, and Other Lease Lingo

Credit: lev.co

Commercial leases love their jargon—but if you want to avoid surprise charges, you’ve got to speak the language. Here are a few key terms you’ll come across:

• Base Year: This is the “starting point” year for measuring operating expenses. If those costs go up later, you may have to cover the difference.
• Expense Stop: A limit on how much the landlord will pay toward building expenses. Anything above that? You’re footing the bill.
• CAM Charges: Short for Common Area Maintenance—these cover shared spaces like lobbies, landscaping, elevators, and hallways.

Knowing these terms isn’t just for fun—it directly affects how much you’ll pay each month.

What Affects Commercial Property Rental Rates?

So, what really determines your final monthly cost? Here’s what matters most:

• Location – Prime spots come with prime prices.
• Lease Type – Whether it’s full service, triple net, or percentage-based, the structure makes a big difference.
• Operating Expenses – Utilities, repairs, and maintenance.
• Tax and Insurance – Who pays what? It varies by lease.
• CAM Fees – Don’t forget those shared area costs.
• Building Class – Class A buildings (new, upscale) usually cost more than Class B or C.

Bottom line? Commercial rental rates can vary a LOT depending on how much responsibility you’re taking on—and how well you understand the lease terms. Also, do you need help breaking down these lease details or planning your commercial real estate move? Artemis can help you make sense of it all—so you don’t sign anything you’ll regret.

Leasing Office Meaning—Simplified

Wondering what “leasing office” means? It’s not just a building where paperwork happens.

It’s the HQ for:

• Managing tenant relations
• Handling rent payments
• Marketing property for lease
• Negotiating your lease agreement

Immobilier Commercial: Global Touch

If you’re Googling in French or in Europe, immobilier commercial and locaux commerciaux are your keys to finding property for lease abroad.

In mixed-language contracts or global leasing situations, these terms are your compass.

Gross Rent vs Triple Net: A Quick Comparison 

Choosing the right lease type can make a big difference in how much you pay—and how much you worry.

• Gross Lease is the most predictable. You pay one flat fee and the landlord handles the rest. Great for offices where budgeting is key.
• Triple Net Lease (NNN) shifts most of the costs to you. It comes with lower base rent, but surprise expenses can add up fast—common in retail spaces.
• Modified Gross Lease strikes a balance. You split some costs with the landlord, so there’s more flexibility but fewer surprises than a NNN lease.
• Percentage Lease ties rent to your sales. Lower base rent upfront, but your monthly cost grows with your revenue—ideal for retail or mall shops.

👉 Bottom line: If you want stability, go Gross. If you want control, consider NNN. If you’re growing a retail brand, a percentage lease might ease you in.

The Bottom Line 

Summing up, when it comes to commercial leases, there’s no one-size-fits-all. If you crave stability and simple budgeting, a full service or gross lease keeps things neat and predictable. Prefer lower rent and don’t mind managing extra costs? A triple net lease puts you in control—but expect some surprises. If you’re looking for a balanced middle ground, a modified gross lease gives you flexibility without overwhelming responsibility. For retail shops, a percentage lease grows with your business—great for startups aiming to scale. And if you’re after something fresh and urban, mixed use properties in growing developments offer the best of both worlds.

PICK THE RIGHT LEASE, PROTECT YOUR PROFITS.

✅ Quick Tips Before You Sign

• Always identify the lease structure before committing.
• Ask about CAM, tax and insurance, and any expense stop clauses.
• Use your leasing office contact to clarify terms.
• Compare commercial property rental rates in your are
• Get legal advice—some lease agreements are sneakier than they look.

Want to make sure you’re choosing the right lease type for your business goals?
Whether you’re starting a café or scaling a law firm, understanding types of commercial leases helps you stay in control—and avoid hidden costs. Commercial property success starts with the right lease agreement. Don’t just sign—strategize.