Calculate the cap rate, monthly rent, and total lease income on a triple net (NNN) commercial property, where the tenant pays taxes, insurance, and maintenance. Model annual rent escalations and see your effective yield over the full lease term.
Cap rate & commercial yield
In a triple net lease, the tenant pays the three "nets" — property taxes, insurance, and maintenance (CAM) — on top of base rent. That makes the landlord's income unusually clean: the net operating income (NOI) is essentially the base rent, with few landlord expenses to erode it. NNN properties leased to creditworthy national tenants (pharmacies, dollar stores, fast food, banks) are prized by investors for their predictable, hands-off cash flow.
The key return metric is the cap rate = NOI ÷ purchase price. At $22/sq ft base rent on 8,000 sq ft ($176,000 NOI) and a $2.5M price, that's a 7.04% going-in cap rate. Most NNN leases also include annual rent escalations (often 1.5%–3%, or stepped bumps) that grow your income and yield over the lease term. This calculator computes the cap rate, monthly rent, the rent in the final year after escalations, and the total rent collected across the whole term.
Taxes, insurance, and maintenance are the tenant's responsibility, so NOI ≈ base rent.
NOI ÷ price. The headline return for a stabilized single-tenant NNN asset.
Annual bumps grow rent and yield over time and hedge against inflation.
The lease is only as strong as the tenant. National-credit tenants command lower (safer) cap rates.
Triple net (NNN) lease properties are among the most popular hands-off commercial real estate investments in the United States — think national-tenant pharmacies, dollar stores, fast food, and banks. Investors search "NNN lease calculator," "cap rate commercial real estate," and "triple net lease return" when underwriting a deal, because the tenant pays taxes, insurance, and maintenance, leaving the landlord with clean, predictable income. This calculator computes the cap rate, monthly rent, and total yield over the lease term.
Your going-in cap rate is NOI divided by purchase price, and built-in annual rent escalations grow your yield and hedge inflation. Investment-grade national tenants on long leases trade at low, safe cap rates (5%–6%), while weaker tenants or secondary markets offer higher yields with more risk. Enter your numbers to see the full picture.
An investor buys a single-tenant retail building for $2,500,000 — 8,000 sq ft leased at $22/sq ft NNN. Annual NOI is about $176,000, a going-in cap rate of 7.04%. With 2% annual escalations on a 10-year lease, rent climbs roughly 20% by year 10, and the calculator totals all rent collected over the term.
U.S. commercial real estate investors, 1031 exchange buyers, net-lease syndicators, and brokers underwriting single-tenant triple-net (NNN) retail, office, medical, and industrial properties.
A triple net lease shifts the three main property costs — taxes, insurance and common area maintenance — from landlord to tenant, on top of base rent. That is why NNN base rents look cheap compared with gross leases: the quoted figure is not what the tenant pays. Commercial rent is normally quoted per square foot per year in the US, so converting to a monthly cost requires both multiplying by area and dividing by twelve. The tenant's real exposure is that the NNN component is an estimate reconciled annually, so a tax reassessment or a roof repair can produce an unbudgeted true-up bill.
Annual base rent = Square feet × base rate per sq ftAnnual NNN = Square feet × NNN rate per sq ftTotal annual = Base + NNN; Monthly = Total ÷ 12where:
Assumptions: NNN estimates are reconciled against actual costs annually, so the tenant may owe or be refunded. Check whether the lease caps controllable CAM increases and whether roof and structure remain the landlord's responsibility.
Convert a per-square-foot quote into the monthly cheque a tenant actually writes.
Result$10,000 a month — $37.50/sq ft all-in, not $28
Comparing a $28 NNN quote against a $34 gross quote favours the gross lease here, because the true NNN cost is $37.50. Always compare leases on total occupancy cost per square foot, and ask what the NNN figure was in each of the last three years rather than accepting the estimate.