What does FSG, Gross, MG & NNN mean on a lease rate?

January 16, 2015

What does FSG, Gross, MG & NNN mean on a lease rate?

 

FSG = Full Service Gross typically includes everything such as base rent, operating expenses (taxes, insurance, common area maintenance) janitorial service, and utilities, all bundled in one fixed rate. Landlord’s may pass through any increase in operating expenses above the set base year.

 

MG = Modified Gross may or may not include janitorial or utilities in the rate. In extreme circumstances Landlords may pass through increases in one of the three operating expense categories.  

 

Gross = This typically includes base rent and operating expenses all bundled in one fixed rate. Janitorial service and utilities are then usually paid for separately by the Tenant.

 

NNN = Triple Net consists of Tenant’s paying for its pro-rata share of the building’s operating expenses in addition to base rent. In this type of lease, Landlord’s pass through all operating expense categories. Tenant’s pay an estimated amount monthly along with their base rent and the actual amount is reconciled annually. Thus, if operating expenses came in under budget, the Tenant would receive a reimbursement for its overpayment, but conversely would be responsible to make up the difference if actual operating expenses came in over budget.

 

 

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