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NNN charges are the building's operating costs passed through to you on top of base rent: property taxes, building insurance, and common area maintenance. When a warehouse listing says $1.00/SF/MO NNN, the $1.00 is the landlord's rent, and the NNNs are a second number you need before you know what the space costs.
THE SHORT VERSION
- NNN charges: property taxes, building insurance, and CAM, passed through on top of base rent
- The math: at $1.00 base and $0.35 NNN, a 2,500 SF unit costs $3,375 a month, not $2,500
- Estimates: the quoted NNN number reconciles against actual costs at year end
- Utah detail: snow removal lives in CAM, and winter makes it real money here
- Your move: ask for the prior year's actuals before you sign
That second number is the one tenants skip, and it's the reason two listings at the same base rate can cost different amounts every month. Here's what sits in each bucket on a Salt Lake Valley industrial lease, and how to run the math in about a minute.
Property taxes
Your proportionate share of the building's Salt Lake County property tax bill, split by the square footage you occupy. When the county reassesses and the building's value jumps, the tax bucket moves with it. This is usually the largest of the three.
Building insurance
The landlord's policy on the structure itself: fire, casualty, liability for the common areas. This covers the building, not your business. You'll still carry your own policy for contents, equipment, and your operation's liability, and nearly every lease requires you to.
Common area maintenance, or CAM
Everything it takes to run the property: parking lot maintenance and striping, exterior lighting, landscaping, property management, and in Utah, snow removal. That last one is real money here. A January with back-to-back storms means plow trucks in the lot at 4 AM, and that line item lands in CAM. It's a big part of why Utah CAM budgets run higher than the same building would carry in Phoenix.
The math on a real total
Take a 2,500 SF warehouse unit at $1.00/SF/MO NNN base rent. Across our own small-bay listings right now, NNN estimates mostly land between $0.30 and $0.45 a square foot per month. Call it $0.35 for this example.
Base rent: 2,500 SF x $1.00 = $2,500 a month. NNN charges: 2,500 SF x $0.35 = $875 a month. Real monthly cost: $3,375, before your utilities.
$3,375/mo
What the 2,500 SF example actually costs each month: $2,500 in base rent plus $875 in NNN charges at $0.35 a square foot, before utilities.
Most business owners we talk with don't care how the monthly number splits between base rent and NNNs. They care what the check says, out the door. That's the right instinct: $3,375 is the real number here, it sits 35% above the advertised rate, and comparing two spaces on base rent alone will steer you wrong. It's also why we'd rather walk you through the NNN estimate on a specific space than print one number next to every listing: the estimate only means something next to last year's actuals and what's in the CAM budget, and that's a two-minute phone conversation. If you want rate context by size and submarket, the warehouse cost guide covers where totals are landing across the valley, and the lease calculator runs this math for any space.
Estimates now, reconciliation later
Any NNN figure you're quoted is an estimate. The landlord budgets the year's taxes, insurance, and CAM, divides by the building's square footage, and bills you monthly. At year end the books get reconciled against actual costs. Spent less than budgeted, you get a credit. Spent more, you get a true-up bill.
Two things worth doing before you sign. Ask for the prior year's actual NNN costs, because a building with a clean history of small true-ups is telling you the landlord budgets honestly. And read how escalations work: annual increases typically apply to base rent, while NNNs float with actual costs. Both numbers move, but for different reasons.
What NNN charges don't cover
Your own utilities (power, gas, water for your suite), janitorial inside your space, your business insurance, and your phone and internet. On a warehouse with 3-phase power and equipment running, the power bill can be its own meaningful line, so budget it separately.
One more distinction worth thirty seconds: not every lease is NNN. Some smaller spaces, including office and retail units at parks like Broadbent, are quoted MG, modified gross, where some of those operating costs are baked into the quoted rate. Same building, different math. A full NNN versus gross versus modified gross comparison is its own topic, but for now the rule is simple: always ask which structure a quoted rate assumes before you compare it to anything.
Common questions
Are NNN charges negotiable?
Less than tenants hope, on small-bay product. Caps on annual NNN increases are rare here: you can ask to cap controllable costs like management and landscaping, but most small-bay ownership won't grant it, and taxes, insurance, and snow removal float with actual costs regardless. Your real leverage is information: the prior year's actuals before you sign, and a building whose reconciliation history shows honest budgeting.
Why did my NNN charge go up mid-lease?
Usually a county reassessment or a true-up from last year's actuals. Ask for the reconciliation statement, which you're entitled to see. The math should trace.
Is snow removal really my cost?
On an NNN lease, yes, your share of it. It keeps your customers, trucks, and employees moving in the lot you use, and the alternative is a landlord who skips the plow.
Do smaller buildings have higher NNN per foot?
Often, yes. Fixed costs like management and insurance spread across less square footage. It's one reason small-bay NNNs sit at the higher end of that $0.30 to $0.45 band.
Looking at a space and the listing only shows base rent? Send it over. I'll pull the NNN estimate and give you the real monthly number before you tour it, which beats finding out at the lease draft.
Want the real total on a space you're looking at?
Send me the listing and I'll break out base rent, the NNN estimate, and what your first month actually costs. Or run your own numbers in the lease calculator.
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