Single Net Lease

A Single Net Lease (N Lease) is a commercial lease agreement whereby the tenant pays the base rent plus one additional operating expense—specifically the property taxes—while the landlord remains responsible for other property-related costs such as insurance premiums and maintenance. This lease structure represents a middle ground in the spectrum of net leases, positioned between gross leases (where the landlord covers all operating expenses) and double or triple net leases, where tenants assume multiple or all expenses. The single net lease shifts property tax liability to tenants, reducing the landlord’s exposure to fluctuations in tax assessments and simplifying administrative burden related to tax payments. However, the landlord retains responsibility for repairs, property insurance, and sometimes utilities depending on lease specifics. For property owners and investors in industrial real estate, the single net lease offers a balanced risk allocation and predictable income stream while maintaining control over physical property management. In the context of the industrial and logistics sector in Central and Eastern Europe, this lease type requires precise contractual stipulations to clearly define the tenant’s tax responsibilities and the landlord’s remaining obligations to avoid disputes and ensure compliance with local tax regulations. Effectively negotiated single net leases enhance risk management and cash flow stability for landlords, making them a relevant option for certain industrial real estate assets where tenant credit strength and property tax predictability are favorable.