Net Lease
Understand net leases in Canadian commercial real estate: how they work, what tenants pay, and why they matter to landlords and investors.
June 16, 2025
What is a Net Lease?
A net lease is a type of commercial lease where the tenant pays base rent plus one or more additional operating expenses such as property taxes, insurance, or maintenance.
Why Net Leases Matter in Real Estate
In Canadian commercial real estate, net leases shift certain property expenses to tenants, reducing financial responsibility for landlords while offering predictable occupancy costs.
Common types of net leases:
- Single Net (N): tenant pays property taxes
- Double Net (NN): tenant pays taxes and insurance
- Triple Net (NNN): tenant pays taxes, insurance, and maintenance
Net leases are popular in retail and industrial spaces and are often used for long-term leases with corporate tenants.
Understanding net lease structures helps both landlords and tenants negotiate fair, transparent agreements aligned with investment goals.
Example of a Net Lease in Action
The tenant signs a triple net lease, agreeing to cover all property taxes, insurance premiums, and maintenance for the warehouse space.
Key Takeaways
- Tenant pays rent plus property expenses
- Varies by number of responsibilities (N, NN, NNN)
- Common in retail, industrial, and office leases
- Reduces landlord risk and costs
- Requires detailed agreement documentation
Related Terms
- Triple Net Lease
- Operating Costs
- Commercial Lease
- Lease Agreement
- Tenant Improvements
An overview of Hedge Road Landing. (Alliance Homes)
6525 Mississauga Road and its surrounding context. (RBC Capital Markets & CBRE)
Property details for 6525 Mississauga Road. (RBC Capital Markets & CBRE)
National average resale-price growth and housing-starts growth, smoothed over three months. The comparison illustrates the cycle; it does not establish how much a price change causes construction to change.
Trailing 12-month starts in centres of 50,000 or more remove the usual monthly seasonality. Ownership combines the homeowner and condominium categories; rental is shown separately.
Six-month averages of provincial starts, expressed at annual rates. The smoothing reduces the influence of individual apartment projects.
The same August benchmark compared with two different starting points. Three-month changes are not annualized.
Average sale prices show the difference in purchase costs across markets. They do not measure affordability relative to local incomes or construction costs.
Newfoundland and Labrador remains above its pre-pandemic sales pattern, but August activity was below last year. Historical lines retain their original release vintages.
Average and median describe different aspects of the same month’s transactions. Both are affected by the mix of homes sold.
Category averages compare different homes and locations; the gaps are not estimates of the cost to upgrade an otherwise identical property.
The five categories shown account for 5,000 of the board’s 5,057 sales. The remaining 57 transactions were in other housing categories.
Monthly observations are not seasonally adjusted. Active listings count properties available at month-end; they are not construction inventory.
Average and median prices share one dollar axis. These unadjusted transaction measures do not control for changes in the homes sold.
TRREB’s 416/905 categories compare the apartments sold in each area. The difference does not isolate a location premium for equivalent units.
Highlights from the Delta Golf & Country Club listing brochure. (Colliers)