net lease

(redirected from Net Leases)

Net lease

A lease arrangement under which the lessee is responsible for all property taxes, maintenance expenses, insurance, and other costs associated with keeping the asset in good working condition.

Net Lease

A lease in which the lessee pays the lessor (the property owner) a flat fee at agreed-upon intervals (usually once per month), and, in addition, some or all of the taxes, utilities, and maintenance due on the leased property. That is, the lessee becomes responsible for at least some of the duties of ownership of the leased property. See also: Triple Net Lease, Gross Lease.

net lease

A lease in which the costs of maintaining the asset, including taxes and insurance, are paid by the lessee. Compare gross lease.

net lease

A lease in which the tenant pays rent plus some portion of the maintenance and operating expenses of a property.The term triple net lease means the tenant pays all expenses associated with the property—maintenance, repairs, insurance, and real estate taxes. Beyond that, though, the expression net lease has no particular definition regarding the tenant's exact responsibilities. Every lease will be different and should be scrutinized for exact tenant expenses.One should always obtain a detailed list of expenses that are within the landlord's control,such as office overhead and salaries. Otherwise, expenses may increase dramatically merely because the owner's son-in-law, for example,has been given a high-paying job for mowing the lawn each week.

References in periodicals archive ?
1.1362-2(c) (5)(ii)(B) specifically states that significant services are not rendered and substantial costs are not incurred in connection with net leases. Because Parks Square leases space only on a "net lease" basis (and because Parks Square performs no significant services), it will be subject to the tax on PII.
The firm believes that well executed net leases can provide a path to non-cyclical and consistent cash yield, generally in industries and companies that New Mountain already researches.
The properties are all subject to long-term triple net leases.
In addition, generally, substantial costs are not incurred in connection with net leases. However, in Letter Ruling 9404016, the Service held that rents from a net lease of personal property were not deemed "passive investment income." The IRS determined that the taxpayer's large employee compensation and office rental expenses amounted to substantial costs even though the rental was a net lease.
Adam English, Principal of STREAM, commented about the sale that "the seller was pleased with the attractive cap rate achieved for the properties and the buyer was pleased with acquiring Dollar General properties under long term triple net leases located in strong markets.
Activities can be structured so that property under net leases will be grouped together and property for which significant services are rendered will be grouped together, thus achieving different treatment for self-employment tax purposes.
The triple net leases are all guaranteed by Alimentation Couche-Tard, an investment grade company rated by Standard & Poor's (BBB-).
Jimmy Goodman, Partner of The Boulder Group, added, “First time net lease investors are seeking newer Dollar General leases, as they are 15 year triple net leases as opposed to the older 10 year double net leases.
Consistent with the net leases for the office and retail components of the World Trade Center, the net lessees have that responsibility.
There are two primary types of leases when it comes to a discussion of escalations: Net leases, in which the tenant is responsible for all operating and some or all capital costs; and Gross leases, in which the tenant is only responsible for increases in operating expenses above some predetermined base.
Carey and Extra Space Storage have entered into net lease agreements for 36 self-storage properties owned by Carey.
Birmingham, AL, January 05, 2015 --( STREAM Capital Partners ("STREAM"), a boutique net lease and sale leaseback advisory group, recently advised the seller, a family office, on the sale of a portfolio of 18 KFC properties.