What is the difference between net and gross rents?
Net rents pass expenses through the tenant while gross rents include expenses. There are several variations of net and gross rents. The most common net rent in our market is triple net rent. This rent is primarily used for retail and industrial space. In this instance, the landlord charges a base rent to the tenant. In addition to this base rent, the tenant pays for individual utility charges plus the tenant reimburses the landlord for expenses such as real estate taxes, insurance and common area maintenance (cam). On the other hand, the most common gross rent in our market is on a modified basis. This modified gross rent is primarily used for office space but can also be used for other types of spaces. In this case, the landlord charges the tenant a rent inclusive of expenses plus the tenant pays for individual utility charges.
