A landlord quotes "$25/sqft base" and it sounds affordable. Then CAM, insurance, and property tax are added on top — and your real rent is closer to $35. This is the NNN lease, and misunderstanding it is how otherwise-strong stores end up rent-burdened.
Base rent vs effective rent
Base rent is only the starting point. A triple-net (NNN) lease makes the tenant responsible for three additional "nets":
| Component | What it is |
|---|---|
| Base rent | The quoted "$/sqft" paid to the landlord |
| Property tax (Net 1) | Your share of the building's real-estate tax |
| Insurance (Net 2) | Your share of the building's casualty/liability policy |
| CAM (Net 3) | Common-area maintenance: parking, landscaping, snow, hallway HVAC |
How much extra is NNN?
In many U.S. retail markets NNN adds 20-40% on top of base rent. A space at $25/sqft base can realistically cost $30-$35/sqft all-in. Always request the trailing 12 months of actual NNN from a comparable tenant or the lease abstract — estimates understate the load.
The sales-per-sqft you must hit
Occupancy cost (rent all-in) above ~10% of sales is a widely used red line for small retailers and restaurants; full-service restaurants often target 6-10%. To stay healthy:
| All-in rent /sqft/yr | Min sales/sqft needed (at 10% rent) |
|---|---|
| $30 | $300 |
| $50 | $500 |
| $80 | $800 |
National all-retail average sales run about $325/sqft; grocery and convenience sit near $330-$500/sqft, while QSR can reach $600-$1,200/sqft. If your concept cannot plausibly clear the sales/sqft your rent demands, the lease is the problem — not your marketing.