The lease structure on a commercial space determines your total cost of occupancy — not just your base rent. Pass-through operating expenses can add 30 to 100 percent on top of the face rate, which means two spaces with identical sticker prices can look very different once all costs are tallied.¹ With premium buildouts approaching $200–$300 per square foot in dense urban markets, understanding a building's lease structure before you tour is as important as evaluating the space itself.^{1 2}

U.S. commercial real estate investment is projected to grow significantly through 2026, and hybrid work continues to reshape both demand and deal terms across nearly every market.³ Tenants who understand lease structures enter negotiations with real leverage. This guide breaks down seven common U.S. commercial lease structures — who pays what, how each works in practice, and what to push for at the table.

• Lease structure comes with the property — understanding it before you tour is how you avoid committing to costs you didn't model.
• Operating expenses can exceed base rent by 30 to 100 percent — always compare total occupancy cost, not just the face rate.¹
• CAM charges are one of the most consequential and least understood line items in a commercial lease — define them precisely and negotiate audit rights before you sign.⁴
• Always negotiate annual caps on controllable CAM and operating expense increases — and push back on uncapped management and administrative fees. In most markets, landlords will accept reasonable caps if you ask.
• Flexible space is growing: coworking represents a rising share of U.S. office inventory, lease terms are compressing across most sectors, and 59 percent of remote-capable employees work hybrid schedules.^{5 6 3}
• A tenant-rep broker brings market comps, expense benchmarks, and negotiation experience most tenants simply don't have in-house — and in most U.S. markets, the landlord pays the commission.

Why Lease Structure Matters More Than Rate

Most tenants focus on rent per square foot. That instinct is understandable, but it can be expensive. A $20-per-square-foot gross lease and a $20-per-square-foot NNN lease are not the same deal. In a net lease, taxes, insurance, and maintenance come on top of base rent — and those pass-throughs can push your real occupancy cost 30 to 100 percent above what was quoted.¹

Buildout exposure adds another layer of risk. Premium fit-outs in dense urban cores have risen sharply — Turner & Townsend's construction cost data puts high-end U.S. commercial interiors at $200 to $300 per square foot depending on market and specification.² The wrong lease structure can leave tenants absorbing unexpected capital outlays during construction or operations.

The structure of a lease is set by the property type, the landlord, and the market — tenants don't pick it from a menu. What tenants can do is understand what they're walking into, model the full cost, and negotiate the terms within that structure as aggressively as the market allows.

1. Full-Service (Gross) Lease

A full-service or gross lease bundles most or all building operating expenses into one monthly rent payment. The landlord typically covers property taxes, building insurance, common area maintenance, shared utilities, janitorial, and security.³ The face rent is higher than a comparable net quote because those costs are embedded — but the tradeoff is predictability and minimal monthly reconciliation.

2. Single Net (N) and Double Net (NN) Leases

Net leases shift specific building expenses from landlord to tenant. The two lighter variants:

Single Net (N): The tenant pays base rent plus property taxes. The landlord covers insurance and most maintenance. Relatively rare today — tends to appear in legacy or smaller commercial arrangements.

Double Net (NN): The tenant pays base rent, property taxes, and building insurance. In multi-tenant buildings, expenses are allocated pro-rata — a 20,000-square-foot tenant in a 100,000-square-foot building pays 20 percent of the tax and insurance bills.¹ Most common in multi-tenant office and select industrial properties.

3. Triple Net Lease (NNN)

The triple net lease is the most common net structure in U.S. commercial real estate. The tenant pays base rent plus property taxes, insurance, and common area maintenance (CAM). CAM charges can cover landscaping, parking lot maintenance, security, property management fees, and shared utilities — and in some buildings represent a substantial share of total occupancy cost.⁴

4. Modified Gross Lease

The modified gross lease is the middle ground between full-service and triple net. The most common structure uses a base year stop: the landlord covers all operating expenses up to the level incurred in the first lease year, and the tenant pays only the increases above that baseline going forward. If base-year expenses are $5.00 per square foot and rise to $5.50, the tenant's share is $0.50.⁷

5. Absolute Net Lease

The absolute net lease — sometimes called a bondable NNN — transfers virtually all building responsibilities to the tenant, including structural elements like the roof and foundation. Tenants are typically required to maintain performance obligations even after a casualty event.⁸ These leases are rare and almost exclusively used by investment-grade, single-tenant operators in sale-leaseback or build-to-suit transactions.

6. Percentage Lease

A percentage lease pairs a base rent with a share of the tenant's gross sales above a defined breakpoint. The percentage rate typically ranges from 5 to 7 percent, and the natural breakpoint is calculated by dividing annual base rent by the percentage rate.⁹

7. Short-Term and Coworking Agreements

Flexible workspace agreements — from month-to-month coworking memberships to executive suite licenses — give tenants the ability to scale headcount up or down without a long-term commitment. Coworking and flex space have grown consistently as a share of U.S. office inventory, driven by sustained demand for turnkey, low-commitment solutions.⁶

Commercial Lease Structure Comparison

CAM is one of the most negotiable and highest-impact line items in any net lease — define it carefully and build in audit rights before you sign.⁴

What to Negotiate in 2026

You don't get to choose your lease structure — but you do get to negotiate within it. Here are the highest-impact terms to push on, regardless of lease type.

Why Work With TenantBase

Lease terms are negotiable — but only if you know what to ask for and when to ask. TenantBase combines a comprehensive marketplace of available commercial spaces with local tenant-rep brokers who understand the structures behind every listing and know how to negotiate within them. Our platform tracks spaces, expenses, timelines, and documents so you can stay focused on running your business.

Whether you're searching for your first office, rightsizing after a headcount change, or navigating a renewal, TenantBase can help you model the real cost of every option, pressure-test lease language, and move from search to signed with confidence.

Conclusion

Understanding lease structure is part of evaluating a space — not a separate decision you make after you've already committed. The structure comes with the property, and it has a direct impact on what you'll actually pay. In 2026, pass-throughs can add 30 to 100 percent to base rent, CAM charges can be a meaningful share of total occupancy cost, and shorter terms and hybrid work have created new leverage points for tenants who come to the table prepared.^{1 3 5}

Know what structure you're walking into before you tour. Define expenses precisely. Negotiate caps and audit rights early. And if you want a faster path to the right outcome, TenantBase can help you get there.

Frequently Asked Questions

References

1. Visual Lease. Understanding Different Types of Commercial Leases: Exploring Triple Net and Pass-Through Leases. Visual Lease.
2. Turner & Townsend. International Construction Market Survey. Turner & Townsend.
3. JLL. U.S. Office Outlook. Jones Lang LaSalle.
4. BOMA International. Experience Exchange Report — Operating Expense Benchmarks. Building Owners and Managers Association.
5. Gallup. State of the American Workplace: Hybrid & Remote Work. Gallup.
6. CBRE. U.S. Office Figures. CBRE.
7. Lighthouse CRE. CRE Terms: Modified Gross Lease. Lighthouse CRE.
8. Angora Legal. Net and Absolute Leases Explained: Who Really Pays for What. Angora Legal.
9. Nolo. Percentage Rent in Commercial Leases. Nolo.