Gross Lease


DEFINITION of 'Gross Lease'

A type of commercial lease where the landlord pays for the building's property taxes, insurance and maintenance. A gross lease can be modified in a number of ways to best meet the needs of a particular building's tenants (for example, a gross lease may or may not require the tenant to pay utility bills).


The opposite of a gross lease is a net lease. Under a net lease, the tenant is responsible for some of the additional costs associated with the property. There are three types of net leases: single net, double net and triple net. Under a single net lease, the tenant pays rent plus property taxes. Under a double net lease, the tenant pays rent plus property taxes and insurance. Under a triple net lease, the tenant pays for rent plus property taxes, insurance and maintenance.

  1. Capitalization Rate

    The rate of return on a real estate investment property based ...
  2. Renewal Option

    A clause in a lease that outlines the terms for renewing or extending ...
  3. Shell Lease

    A commercial lease in which a tenant rents a property with an ...
  4. Percentage Lease

    A type of lease where the tenant pays a base rent plus a percentage ...
  5. Joint Tenancy

    A type of property right where two or more people own or rent ...
  6. Commercial Real Estate

    Property that is used solely for business purposes. Examples ...
Related Articles
  1. Options & Futures

    Build Your Small Business During Downswings

    Here we offer some cost-saving measures to strengthen your business even when the market is weak.
  2. Home & Auto

    Rental Properties: Cash Cow Or Money Pit?

    Create a valuation system to forecast the profitability of an income-producing property.
  3. Home & Auto

    Rent-To-Own Real Estate Full Of Pitfalls

    Before you consider this type of arrangement, you should be aware of how it works, who benefits and the many things that can go wrong.
  4. Options & Futures

    Rent To Own; Own To Rent

    This method can help first-time buyers afford a home using a rent-to-own strategy, and it can also be good for investors.
  5. Economics

    Explaining Fair Market Value

    Fair market value is the price at which a buyer and seller are willing to exchange a good.
  6. Taxes

    4 Reasons Why Delaware Is Considered a Tax Shelter

    Understand what a tax shelter is and how one is normally created. Learn about Delaware and the top five reasons why it's considered a tax shelter.
  7. Economics

    How Does a Modified Gross Lease Work?

    A modified gross lease is a rental agreement where, in addition to their rent, tenants pay a share of other costs associated with the property.
  8. Investing

    Buying Your First Investment Property? Top 10 Tips

    Check this list if you are thinking of making a purchase and becoming a landlord.
  9. Home & Auto

    Millennials Guide: How To Read a Lease

    Everything you need to know before you rent a home.
  10. Credit & Loans

    How Does a Lease Work?

    A lease is an agreement between two parties where the lessor owns property that it allows the lessee to use pursuant to terms of the agreement.
  1. How can I obtain an abatement for property taxes?

    Depending on where your property is located, your local city or county government may offer a property tax abatement program. ... Read Full Answer >>
  2. What is the process for a building owner depreciating leasehold improvements in a ...

    As long as the building owner is the person or entity that provides leasehold improvements, then the owner can depreciate ... Read Full Answer >>
  3. What kinds of real estate transactions use triple net (NNN) leases?

    A net-net-net lease, also known as a triple net or NNN lease, is a type of real estate lease that requires the tenant to ... Read Full Answer >>
  4. How long can a building owner or landlord depreciate a leasehold improvement?

    Leasehold improvements have different depreciation rules depending on whether you are working with U.S. tax basis financial ... Read Full Answer >>
  5. How do taxes impact Net Operating Income (NOI)?

    Net operating income (NOI) is a before-tax figure and does not take into account income taxes, loan payments, capital expenditures, ... Read Full Answer >>
  6. In which US cities do high-income earners pay the most tax?

    There are several different ways that cities tax high-net-worth (HNWIs) individuals. The most direct and obvious method is ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  2. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
  3. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  4. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  5. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  6. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!