Absolute NNN vs NN Leases

Absolute NNN vs NN Leases: What Investors Need to Know

When investing in commercial real estate, especially in the net lease market, understanding lease structures is critical to making informed decisions. Two common terms you’ll encounter are Absolute NNN (Triple Net) and NN (Double Net) leases. While they sound similar, the financial responsibilities and risks they place on the tenant—and by extension, the investor—can vary significantly.

What Is a Net Lease?

A net lease is a lease agreement where the tenant pays some or all of the property expenses in addition to rent. These expenses typically include:

• Taxes

• Insurance

• Maintenance

The differences between NNN, Absolute NNN, and NN come down to how these expenses are divided between landlord and tenant.

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What Is an Absolute NNN Lease?

An Absolute NNN lease is often referred to as a “bondable” lease because it is the most landlord-passive investment structure available. Under this agreement, the tenant is responsible for 100% of the operating expenses, including:

• Property taxes

• Building insurance

• Common area and structural maintenance

• Roof and HVAC replacement

• Capital expenditures

• Even expenses related to natural disasters or condemnation in some cases

This type of lease offers predictable, stable cash flow, making it ideal for hands-off investors seeking long-term, low-risk income—often from national tenants like Walgreens, Dollar General, or 7-Eleven.

💡 Key Benefit: You, as the landlord, receive a net check every month with minimal involvement or exposure to unforeseen costs.

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What Is a NN (Double Net) Lease?

A NN lease still shifts many responsibilities to the tenant, but some landlord obligations remain—typically involving roof and structural maintenance or major repairs.

This middle-ground lease structure may be attractive to investors seeking slightly higher returns (often due to the increased risk and responsibility). However, it requires more active asset management and potential out-of-pocket expenses.

🛠 Key Risk: If the roof needs replacing or the building requires major structural work, the landlord may be responsible—even if the tenant is paying rent on time.

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Side-by-Side Comparison