Gross Lease vs. Net Lease vs. Triple Net (NNN): Which One Are You Actually Signing in Florida?

The Lease Type Determines Who Bears the Risk — Know Before You Sign

You found the right space in Port Orange or on a busy commercial corridor in Daytona Beach. The rent looks reasonable. But before you sign anything, one question matters more than the dollar figure on the first page: who is responsible for the property taxes, the insurance, the roof repair, and the parking lot resurfacing? The answer depends entirely on the lease structure, and in Florida's commercial real estate market, tenants routinely sign documents without fully understanding what category of lease they are agreeing to. That misunderstanding can cost thousands of dollars per year.

As a Florida-licensed attorney and commercial broker serving Volusia County and the surrounding region, I work through lease structures with clients in Ormond Beach, New Smyrna Beach, Palm Coast, DeLand, and across the greater Daytona Beach market. Here is a plain-language breakdown of the three principal lease types and the legal weight behind each one.

The Gross Lease: Predictability in Exchange for a Higher Base Rate

A gross lease, sometimes called a full-service lease, is the most tenant-friendly structure on the risk-allocation spectrum. The tenant pays a single fixed monthly rent, and the landlord absorbs most or all operating expenses: property taxes, building insurance, common area maintenance (CAM), and often utilities. The tenant's monthly cost is predictable from month one through the final day of the term.

In the Daytona Beach and Volusia County market, gross leases appear most frequently in multi-tenant office buildings, medical office suites, and smaller retail configurations. Benchmark rates for suburban Class B office space typically run $20 to $30 per square foot gross, while medical office space, which carries specialized HVAC and compliance costs, can range from $28 to $45 per square foot gross.

The trade-off is straightforward: the landlord prices that cost certainty into the base rent. If property taxes spike because a reassessment occurs under Florida Statute Section 193.011, the landlord absorbs that increase, not you. For a small law firm, a medical practice, or a professional services tenant in Ormond Beach, that predictability often justifies the premium.

The Modified Gross Lease: A Negotiated Middle Ground

A modified gross lease splits operating expenses between landlord and tenant through negotiation rather than a fixed formula. There is no single standard version. One common arrangement has the tenant pay utilities and janitorial services while the landlord retains responsibility for taxes, insurance, and structural repairs. Another version uses a base-year expense stop: the landlord covers operating costs up to a defined baseline amount per square foot, and the tenant absorbs any increases above that threshold.

Modified gross structures are increasingly common in mid-size office and flex space across Volusia County, particularly during lease renewals negotiated after 2020, when landlords began shifting operating expense risk away from pure gross lease structures. If you are renewing a lease in DeLand or Palm Coast, pay close attention to whether your new agreement has quietly migrated from a full-service gross to a modified gross format. The base rent number may look similar, but your annual exposure could be meaningfully higher.

Because the expense split is negotiated rather than standardized, every clause in a modified gross lease requires careful review. Our complete checklist of what should be included in a Florida commercial lease agreement identifies the specific provisions you should audit before executing any modified gross document.

The Net Lease and Triple Net (NNN): The Full Pass-Through Structure

Net leases transfer operating expense responsibility to the tenant in increasing degrees. A single net lease passes property taxes to the tenant. A double net lease passes taxes and insurance. A triple net lease, universally known as NNN, passes all three primary categories: property taxes, building insurance, and common area maintenance costs.

In an NNN structure, the tenant's monthly obligation has two components: a base rent and a variable NNN expense figure. If you lease 2,000 square feet in a 20,000-square-foot retail center in Port Orange, you are typically responsible for 10 percent of the building's actual property tax bill, 10 percent of the insurance premium, and 10 percent of CAM costs. Those figures are reconciled annually, which means tenants often receive a true-up invoice at year-end reflecting actual versus estimated expenses.

Florida's commercial market has a heavy concentration of NNN product. Nationally, NNN lease investment volume reached $51.4 billion in 2025, up 16 percent from the prior year, with Florida capturing a meaningful share of that transaction activity. Projected 2026 NNN volume runs between $34 and $36 billion, reflecting continued investor appetite for the structure's landlord-favorable risk profile.

From a tenant's legal perspective, the risks embedded in NNN leases deserve careful scrutiny. Under Florida law, there is no statutory cap on how much a landlord can pass through as CAM costs unless your lease expressly limits it. Property tax increases triggered by a change-of-ownership reassessment under Florida Statute Section 193.155 can be passed through to NNN tenants immediately. Structural repair obligations, often labeled "capital expenditures" in the CAM definition, can lawfully be passed through if the lease language permits it. None of these outcomes are hypothetical. They happen regularly in Volusia County transactions.

Before you sign an NNN lease, you should also understand how personal liability attaches to your obligations. Our article on personal guarantees on Florida commercial leases explains why NNN commitments often come packaged with personal guarantee requirements and how to negotiate limits on that exposure.

Key Questions to Ask Before You Execute Any Commercial Lease

• Is this a gross, modified gross, single net, double net, or NNN lease? The label on the cover page may not match the actual expense allocation inside the document.
• Does the CAM definition include capital expenditures, management fees, or administrative charges? Each addition increases your actual cost.
• Is there a CAM cap or expense stop that limits annual increases?
• What happens to your NNN obligations if the property is sold and reassessed under Florida Statute Section 193.155?
• Are you signing individually, or is a personal guarantee attached? If so, what are the scope and duration of that guarantee?

The Right Lease Structure Depends on Your Business and Your Risk Tolerance

There is no universally superior lease type. A gross lease rewards tenants who value budget certainty. A NNN lease typically carries a lower base rent and suits tenants who can absorb variable expense risk. The modified gross sits in between and is only as favorable as the negotiation behind it. The critical factor is that you understand exactly which structure you are agreeing to and what the legal consequences are under Florida law before the lease is executed.

If you are evaluating commercial space anywhere in Daytona Beach, Port Orange, Ormond Beach, New Smyrna Beach, Palm Coast, or DeLand, contact Arthur Simpson, Esq., CIPS at Realty Pros Assured. As both a Florida-licensed attorney and a commercial broker, I review lease structures, negotiate expense provisions, and represent tenants and landlords throughout Volusia County with the legal depth that a standard real estate transaction simply does not provide. Schedule a consultation at arthursimpson.com.