How to calculate NNN lease cost
A triple-net quote is incomplete until estimated operating expenses are added to base rent. Enter every annual per-square-foot component using the same rentable area and time basis.
- Annual base rent equals rentable square feet multiplied by base rent per square foot
- Annual NNN expenses equal rentable area multiplied by CAM, tax, and insurance estimates
- Monthly occupancy cost equals the combined annual estimate divided by 12
- Utilities, percentage rent, and tenant-specific costs may still sit outside the estimate
Keep estimates and reconciliations separate
NNN charges are often budgeted estimates that may later be reconciled to actual property expenses. The calculator models the entered estimate, not a final landlord statement.
- Confirm whether each quote is annual or monthly
- Confirm whether area is rentable or usable
- Review exclusions, caps, base years, and gross-up provisions
- Compare scenarios with a consistent expense basis
Key takeaways
- Estimated NNN occupancy cost can be modeled as rentable area multiplied by the sum of annual base-rent and NNN expense rates.
- CAM, taxes, and insurance should be entered on the same per-square-foot and annual basis before they are added.
- A lease abstract and landlord reconciliation control when they differ from a planning estimate.