A modified gross lease is a hybrid lease in which landlord and tenant split operating expenses.
A modified gross lease sits between a gross lease and a net lease, and the exact split is negotiated lease by lease. A common version has the tenant paying utilities and janitorial while the landlord pays taxes, insurance, and structural repairs. Because there is no standard definition, the lease language controls. If you are comparing it to a NNN property, adjust the income for the expenses the landlord keeps so the returns are comparable.
