A gross lease is a lease structure in which the landlord pays property taxes, building insurance, and common area maintenance costs out of the quoted rent, rather than billing them separately to the tenant. The tenant pays one fixed monthly amount, making budgeting simpler but shifting expense risk to the landlord — who typically prices that risk into a higher base rent than a comparable triple net lease.
How a gross lease works
Under a gross lease, the quoted rent is the tenant's entire real estate cost — taxes, insurance, and CAM are baked in and managed entirely by the landlord. This is common in office and some multi-tenant flex buildings, but relatively rare in single-tenant industrial space, where NNN is the norm.
Because the landlord bears the risk of rising taxes or insurance premiums, gross lease rents are typically priced higher than the base rent portion of a comparable NNN deal — the landlord is charging a premium to absorb that variability.
Gross lease vs triple net: cost comparison
| Cost item | Gross lease | Triple net (NNN) lease |
|---|---|---|
| Base rent | Higher (includes cost buffer) | Lower (quoted alone) |
| Property taxes | Included in rent | Billed separately to tenant |
| Insurance | Included in rent | Billed separately to tenant |
| CAM | Included in rent | Billed separately to tenant |
| Cost predictability | High — fixed monthly cost | Lower — can rise with reassessments |
What to watch for before committing
All-in cost comparison
Always compare a gross lease's total rent against a NNN lease's base rent plus estimated pass-throughs — not the headline numbers alone.
Expense stop clauses
Some "gross" leases include an expense stop, where the tenant pays increases above a base-year expense level — read the fine print.
What's actually excluded
Confirm whether utilities, janitorial, or interior maintenance are truly included or billed separately despite the "gross" label.
Landlord's incentive to control costs
With operating costs baked into rent, landlords have less incentive to minimize CAM spending — ask about their cost history.
Renewal rent resets
Gross lease renewal rent often resets to reflect the landlord's updated cost basis — ask how renewal pricing is calculated.
Building type fit
Gross leases are far more common in office and multi-tenant flex space than in single-tenant industrial — confirm this structure is actually standard for the property type you're considering.
When you need to know this
- Budgeting certainty — tenants who need a single fixed occupancy cost for financial planning
- Multi-tenant flex or office-heavy industrial — buildings where shared costs are harder to bill transparently per tenant
- Short-term occupancy — tenants who want to avoid CAM reconciliation complexity for a brief lease term
- Comparing quotes across buildings — normalizing gross and NNN quotes to the same all-in cost basis before deciding
Frequently asked questions
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