A Tuesday lease signing changed my mind about triple-net leases

I was dead set against triple-net leases for years, thought they were just a way to dump costs on tenants. Then I sat through a signing at a medical office building in Phoenix where the tenant actually preferred it because they wanted control over the HVAC and roof repairs. Has anyone else seen a tenant push for a triple-net deal instead of pushing back?

2 comments

2 Comments

hannah_price7925d ago

Hold up, I gotta push back hard on this one. Triple-net leases are almost always a trap for small business tenants who don't have deep pockets or a dedicated maintenance crew. Giving the tenant control over the HVAC and roof sounds good until a $15,000 compressor fails on Christmas Eve and they're stuck paying for it with no leverage. Most medical offices I've dealt with regret that control real fast when they realize a new roof costs way more than they ever saved on rent. Landlords love triple-nets because they offload all the big, unpredictable expenses and just sit back collecting a check with zero risk. That tenant in Phoenix might be fine for now, but one major structural issue can bankrupt a smaller practice.

jordanr8925d ago

My buddy's dentist office had a pipe burst on New Year's and he still jokes about how that "great deal" cost him his whole vacation fund.