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The Triple Net Lease That Looked Like a Steal Until Tax Season A retail space on the edge of Franklin runs $18 a square foot while the comparable buildi...
A retail space on the edge of Franklin runs $18 a square foot while the comparable building two blocks over asks $26. On a spreadsheet, that gap looks like found money. The quoted rent is almost always the beginning of the math, not the end of it, and triple net leases are where that truth catches people who didn't ask the follow-up questions.
A triple net lease, usually written as NNN, means you pay the base rent plus three categories of cost the landlord would otherwise carry: property taxes, building insurance, and common area maintenance.
That's the whole reason the base number can look so attractive. The landlord has shifted the variable, unpredictable costs onto the tenant, so the headline rent drops and the real monthly obligation lives somewhere else entirely.
None of this is a trap. It's a standard structure for commercial space in and around Franklin, and plenty of smart business owners sign NNN leases every year with their eyes open. The problem is signing one with your eyes on the base rent alone.
Property taxes are the line that surprises first-time commercial tenants most, and Williamson County reassesses property value on a schedule. When a building's assessed value climbs, the tax portion of your NNN obligation climbs with it, and you're the one who pays the increase.
A space that pencils out beautifully in year one can feel very different after a reassessment bumps the taxes several thousand dollars. You didn't do anything wrong. You just signed a lease where that increase was always going to land on you, and nobody translated the clause into a dollar figure.
Franklin has seen real commercial growth in recent years, and growth tends to pull assessed values up with it. That's good news for the overall market and something worth budgeting for if you're the tenant holding the NNN.
Common area maintenance covers the shared parts of a property: parking lots, landscaping, exterior lighting, shared hallways, sometimes a shared roof. In a strip center off Mack Hatcher or a mixed-use building near downtown, your CAM share is calculated as a percentage based on your square footage relative to the whole building.
Here's where the lease language earns a slow read. Some CAM clauses are "capped," meaning your share can only rise so much per year. Others are uncapped and pass through whatever the landlord spends, which is fine until the parking lot needs resurfacing and your bill reflects your slice of a five-figure project.
Ask whether CAM is capped, ask what it has actually run for the past two or three years, and ask whether capital improvements like a new roof are bundled in or excluded. A landlord with nothing to hide will answer all three without flinching.
Two spaces, same neighborhood, very different quoted rents. The $26 building may be a gross lease, where the landlord bundles taxes, insurance, and maintenance into one number and absorbs the fluctuation. The $18 NNN only looks cheaper until you add the "nets" back on top.
Run the full picture before you decide. Base rent plus the current tax load plus insurance plus the trailing CAM average gives you an effective rent you can actually compare apples to apples. Sometimes the NNN still wins by a comfortable margin, and sometimes that $26 gross lease turns out to be the quieter, more predictable deal for a business that can't absorb surprise expenses.
Neither structure is better in the abstract. The right one depends on your tolerance for variable costs and how much certainty your cash flow needs month to month.
The lease will answer most of these if you read it closely, but it's faster and clearer to ask directly:
A landlord quoting an NNN space should have these numbers ready. If the answers are fuzzy, that's your signal to slow down, not to walk away necessarily, but to get the figures in writing before anything gets signed.
Reading a commercial lease is a specific skill, and the costs that hurt are the ones written in language that sounds routine until you've seen how it plays out. This is the kind of work we handle on the tenant side at Redbird Real Estate: modeling the real all-in cost, flagging an uncapped CAM clause, and pressing a landlord for the tax history before you're committed to five years of it.
A good representative isn't trying to talk you out of an NNN lease. Triple net space is often the right call for a Franklin business, especially when you want control over the common areas your customers actually see and walk through.
The goal is simpler than that. Go in knowing your real number, so tax season is a line you already planned for instead of a surprise you're scrambling to cover. A deal you understand completely is the only kind worth signing.