An industrial gross lease is a variation of a gross lease structure adapted specifically for industrial properties, in which base rent includes most standard operating expenses, but often carves out certain costs — particularly utilities tied to heavy equipment or specialized systems — that would be impractical for a landlord to absorb into a flat rent given how much they can vary by tenant.
Why industrial gross leases carve out certain costs
Industrial tenants can have vastly different utility consumption profiles depending on their equipment — a cold storage operation or heavy manufacturer uses dramatically more electricity than a general storage tenant in an identical building. Because of this variability, industrial gross leases often exclude utilities from the flat rent, even while still bundling property taxes, insurance, and CAM the way a standard gross lease would.
What to watch for before committing
Exact cost inclusions and exclusions
Get a detailed, itemized list of what's included in the flat rent versus billed separately, since "industrial gross" isn't a standardized term.
Utility metering and billing method
Confirm whether utilities are submetered directly to your suite or estimated/prorated, which affects billing accuracy.
Expense stop provisions
Check for expense stop clauses that could make the lease behave more like NNN after a base year.
All-in cost comparison
Compare total occupancy cost against competing NNN or standard gross lease quotes rather than relying on the label alone.
Equipment-heavy tenant considerations
If your operation has unusually high utility needs, confirm how this specific lease structure handles that variability.
Renewal rent-setting mechanics
Understand how rent is recalculated at renewal, since industrial gross structures can reset differently than standard gross leases.
When you need to know this
- Comparing lease structures for industrial space — understanding how this hybrid structure differs from standard gross or NNN options
- Equipment-intensive tenants — evaluating how utility cost variability is handled under this lease type
- Negotiating a new industrial lease — clarifying exact cost inclusions before assuming standard gross lease terms apply
- Budgeting total occupancy cost — calculating true all-in cost given this structure's specific exclusions
Frequently asked questions
Ready to compare lease structures?
Browse available industrial listings across every U.S. market, or get a free availability report from our team.