Key takeaways
- Lease labels aren't standardized. The expense clauses decide who pays.
- Compare offers on total occupancy cost per square foot per year.
- Watch base years, expense stops, CAM caps, and audit rights. That's where the money moves.
- Since October 1, 2025, Florida no longer charges state sales tax or local surtax on most commercial rent.
The common structures
| Structure | Tenant pays | Landlord pays | Common in |
|---|---|---|---|
| Full service gross | Rent; sometimes increases over a base year | Taxes, insurance, maintenance, usually utilities and janitorial | Multi-tenant office |
| Modified gross | Rent plus some items, often utilities and janitorial | Taxes, insurance, and some maintenance, often with a base year | Office, small flex |
| Single net (N) or double net (NN) | Rent plus property taxes, or taxes and insurance | Remaining expenses, often structure and roof | Varies |
| Triple net (NNN) | Rent plus a share of taxes, insurance, and common area maintenance | Usually structure and roof, depending on lease | Retail, industrial, single-tenant |
| Absolute net | Rent plus all expenses, including structure and roof | Little or nothing | Long-term single-tenant net lease |
These are tendencies. A "NNN" lease can still leave the roof with the landlord, and a "modified gross" lease can pass through nearly everything. The clauses decide.
Compare offers on total occupancy cost
| Space A (NNN) | Space B (Modified gross) | |
|---|---|---|
| Base rent per SF per year | $18.00 | $23.00 |
| Taxes, insurance, CAM per SF | $6.50 | Included |
| Utilities and janitorial per SF | $2.00 | $2.00 |
| Total per SF per year | $26.50 | $25.00 |
| 2,500 SF, annual | $66,250 | $62,500 |
Illustrative example. Hypothetical numbers chosen to show the math. Your numbers will differ.
The cheaper base rent costs more. And NNN charges change every year. Ask for the last two or three years of actual operating expenses.
The clauses that move money
- Base year and expense stop. In gross and modified gross leases, the tenant may pay increases over a base year or a fixed dollar stop. A base year with low occupancy or a tax abatement inflates future pass-throughs.
- CAM definition. What can the landlord include? Capital repairs, management fees, and administrative markups are common fights.
- CAM caps. A cap on annual increases in controllable expenses. Know whether it's cumulative and what's excluded (taxes and insurance usually are).
- Audit rights. The right to review the landlord's reconciliation, with a time limit and a cost-shifting clause if errors exceed a threshold.
- Roof, structure, HVAC. Who repairs and who replaces. Replacing a rooftop unit is a real number.
More detail on these in lease terms that carry the money and the risk.
Florida: sales tax on commercial rent is gone
Florida repealed the state sales tax and local discretionary surtax on most commercial rent effective October 1, 2025. Before that, the state rate was 2.0% (since June 1, 2024), plus county surtax, and it applied to total rent, which often included pass-through charges. Rent for occupancy periods through September 2025 remains taxable even if paid later. Parking, boat docking and storage, aircraft tie-down, and transient lodging remain taxable. See the repeal guide.
Common questions
What does NNN mean in a commercial lease?
Triple net. The tenant pays base rent plus a share of the property's taxes, insurance, and common area maintenance. Responsibility for the roof and structure depends on the specific lease.
Is a gross lease better for a tenant?
It's more predictable, because the landlord carries most expenses. It isn't automatically cheaper. Compare total occupancy cost and how increases are passed through.
What is a CAM cap?
A limit on how much controllable common area maintenance charges can rise each year. Taxes and insurance are usually excluded. Check whether unused increases carry forward.
Sources
- Florida Department of Revenue, TIP 25A01-04: Sales tax on commercial rentals repealed effective October 1, 2025
- Florida Department of Revenue, TIP 24A01-02: Commercial rental rate reduced to 2.0% effective June 1, 2024
Sources retrieved October 2, 2026.
General information, not legal, tax, accounting, or investment advice. Examples marked illustrative use hypothetical numbers.