Tag: commercial investment

What is a Triple Net Lease?

350 goose lane office park

Looking to lease a property? If so, it is vital to understand the difference between a standard (gross) lease and net lease. These two types of leases distinguish between the responsibilities assumed by landlords and tenants.

When leasing a property, expenses typically have to do with property taxes, building insurance, and maintenance. If a landlord chooses a standard lease, that means he/she bears responsibility for all of the aforementioned expenses. A net lease means one or more of the expenses falls on the tenant’s shoulders.

At 350 Goose Lane Office Park, our ongoing commercial development in Guilford, we offer tenants a triple net lease. A triple net lease means that the tenant is responsible for all expenses (property taxes, building insurance, and maintenance). These are also typically signed for a long period of time and have rate increases built in.

Triple net leases offer significant benefits for both landlords and tenants. For landlords, triple net leases can be ideal. A long-term lease agreement without the threat of random expenses allows for a constant and sustainable stream of income. Likewise, tenants can also benefit. It is likely that rent under a net lease agreement will be lower than that of a standard lease as landlords could subtract the estimated expenses from the rent.

In essence, triple net leases are mutually beneficial leasing options for all parties involved. Considering the quality and efficiency with which we continue to build the office park on Goose Lane, tenants can expect extremely low expenses.

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Commercial vs. Residential Real Estate

Benefits and Risks of Investing in Commercial and Residential Real Estate

As real estate developers, we take into account differences with commercial and residential real estate when building or renovating. With 350 Goose Lane Office Park development, we work to develop commercial office space that can be built-to-suit, while incorporating top of the line features and plenty of green space. At The Residences at 66 High Street, we focus on luxurious amenities and convenience for residents. Differences between commercial and residential do not stop with the development – there is also a lot to consider as an investor. We outline some of the key benefits and risks below.

Commercial Properties – Potential Benefits & Risks

If you have the funding and experience, there are a handful of potential benefits to investing in a commercial property.

  • Longer leases, generally ranging between 3-10 years, provide more stable income.
  • Less maintenance for the owner, developer, or property manager, assuming net lease agreements are in place.
  • Strong returns in the form of income and capital growth.

Commercial real estate ventures also come with potential downsides. Because commercial properties are pricier than most residential properties, they often require higher start-up costs. Also, finding tenants for open space can be difficult, particularly in a poor economy.

Residential Properties – Potential Benefits & Risk

Whether flipping houses or investing in large multi-family properties, residential real estate can be a great investment medium for individuals from all income brackets. The potential benefits include:

  • Lower start-up costs, whether you are buying a one family or multi-family property.
  • Easier to finance, with mortgage options for every type of buyer.
  • Tenants found faster, compared to commercial tenants.

While one can flip a house and put it right back on the market, being an investor or landlord in a residential property requires a great deal of involvement. In regards to property management, residential buildings require far more active participation than commercial properties, as lease agreements tend to take responsibilities out of tenants’ hands.

Investing in real estate can be a great way to diversify your investments and can also be relatively risk-averse if you know what to expect. Before committing to a commercial or residential property, it is important to understand what is required and what suits you best.

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