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Absolute Net Lease

An absolute net lease is the most tenant-responsible NNN lease: the tenant covers taxes, insurance, and all maintenance, including roof and structure.

Under an absolute net lease the landlord's role is close to that of a bondholder. The tenant is responsible for the roof, structure, and parking lot along with taxes and insurance, and the landlord has few if any ongoing obligations. That is attractive to passive investors, but the buyer should read the lease rather than rely on the label. Some leases called absolute still leave limited landlord duties or unusual casualty and condemnation terms, and the tenant's credit becomes the main protection for the income.

Related Terms

Lease Structures

CPI Escalation

A rent increase tied to changes in the Consumer Price Index instead of a fixed percentage.

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Lease Structures

Gross Lease

The landlord pays property expenses and the tenant pays a single all-in rent.

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