Two Charlotte spaces can both be quoted as rent per square foot and still not be comparable, because each rent covers different costs. One may include property taxes, insurance and maintenance. The other may add them on top.
The lease type tells you which, at least roughly. This post puts the main types side by side and shows how to compare two quotes. If you already know you're looking at NNN, my triple net guide goes deeper, and Leasing Commercial Space 101 covers the whole process.
Gross vs. modified gross vs. triple net at a glance
| Lease type | What you usually pay besides rent | Who usually carries rising expenses |
|---|---|---|
| Gross (full service) | Only what the lease leaves out | Landlord |
| Modified gross | Whatever the lease assigns to you | Split by the lease |
| Base year or expense stop | Your share of the increase over a base year or set amount | Tenant, for the increase |
| Single or double net | Some of the taxes, insurance and maintenance | Tenant, for those items |
| Triple net (NNN) | Your share of taxes, insurance and maintenance | Tenant |
| Percentage | A negotiated percentage of revenue, on top of base rent | Depends on what else the lease adds |
These are general patterns, not rules. The North Carolina Real Estate Commission says lease terms are negotiable and often tailored to the property and the business, so the lease language controls over the label.
How each lease type works
Gross lease
NAIOP defines a gross lease, also called full service, as one where the landlord pays all or most of the property's operating expenses and real estate taxes. The rent looks higher because it has more in it. Watch the words "all or most." Ask specifically about electricity and janitorial service. Those are the items I'd want in writing before calling a quote "full service."
Modified gross lease
This label tells you the least. Rent and expenses are divided by the terms of the lease, and NAIOP's definition even groups modified gross with double and triple net, depending on who pays what. Two "modified gross" quotes can split costs very differently. Get a line-by-line list.
Base-year and expense-stop leases
You pay only the increase over a set point, either a base year or a fixed amount called the expense stop. You're protected from today's costs but not from future growth, so the choice of base year matters. See the revaluation section below for why that's especially true right now.
Net leases: single, double and triple
In common usage, single net adds property taxes, double net adds taxes and insurance, and triple net adds taxes, insurance and maintenance. Those labels aren't standardized, so check the list in the lease. Under NAIOP's triple net definition, the tenant pays taxes, maintenance, property insurance and the costs of its occupancy, and the landlord keeps the roof, the structure and sometimes the parking lot.
Percentage lease
You pay base rent plus a negotiated percentage of business revenue, according to the Commission. Read how the lease defines revenue, what it counts and excludes, and what reports you owe the landlord. It can sit on top of expense charges, so don't compare it on the percentage alone.
How to compare two rent quotes
Convert every quote to the total you'd pay per square foot. Here's a made-up example for 3,000 square feet. These aren't Charlotte market rates.
| Per square foot, per year | Space A: NNN | Space B: full service |
|---|---|---|
| Quoted rent | $18 | $25 |
| Estimated taxes, insurance and CAM | $7 | Included |
| Electricity and janitorial | $1.50 | Included |
| Total per square foot | $26.50 | $25 |
| Total per year | $79,500 | $75,000 |
Space A's quote is $7 lower, but it costs $4,500 more in the first year. Then look past the first year:
- Who absorbs growth. If Space A's $7 in expenses rose 10% a year, it would be about $8.47 by the third year, and that increase would be yours. Space B's landlord generally absorbs expense growth during the term, though the lease may raise the rent on its own schedule.
- Rent increases. Compare the escalation clauses in both leases, not only the starting rent.
- Free rent. NAIOP's effective rent formula takes total rent, subtracts free rent and cash allowances, then divides by the term and square footage. At $25, three free months on a three-year lease brings the average down to about $22.92.
- Estimates versus actuals. Net lease expenses are often estimated and reconciled later, so ask for past statements rather than trusting the estimate alone. ICSC's CAM guide explains how fixed and pro rata CAM differ, and it notes that taxes and insurance sit outside a fixed CAM structure.
Why Mecklenburg's 2027 revaluation matters for your lease type
Mecklenburg County is setting new property values as of Jan. 1, 2027. The median commercial increase after the first review is about 30%, and the county's slides show 39% for industrial, 27% for retail and 25% for office. Those are early medians, and tax rates for 2027 haven't been set, so nobody can say yet what any building's tax bill will be. Still, your lease type decides who's exposed:
- Triple net. You pay your share of whatever the property's taxes become.
- Base year. Check the year. If your base year comes before the new values apply, a 2027 tax increase can count as an increase you share. A later base year may already include it.
- Gross. The landlord generally carries it during your term, but check for a tax pass-through clause and think about what happens at renewal.
The dates and the appeal process are in my 2027 revaluation guide. If you're signing a lease now, ask the landlord how they expect the new value to affect your expenses.
Questions to ask before you sign
- Who pays each item: taxes, insurance, common areas, utilities, janitorial, roof, structure, HVAC and parking lot?
- Can I see the last two years of actual expense statements and this year's estimate?
- How is my share calculated, and does the bottom number count all leasable space or only leased space?
- Is there a cap on controllable expenses, and do I have the right to audit?
- Do I pay a full share of common area expenses or only the increase? NC REALTORS added a checkbox for paying only the excess cost to its multi-tenant lease form in 2026.
To push back on these, see the commercial lease negotiation guide. For the budget, see the hidden costs of commercial leasing.
Need help comparing Charlotte spaces?
If you're weighing spaces, send me the size, budget, use and areas you have in mind, and I can line up the quotes on the same basis. Start with my commercial real estate page. This is general information, not legal or tax advice, so have an attorney review the lease and an accountant look at the numbers before you sign.
Sources and Further Reading
- North Carolina Real Estate Commission: Commercial Brokerage: understanding commercial leasing structures
- NAIOP: Terms and Definitions: lease and rental rate terminology
- ICSC: CAM Demystified: a guide for small businesses looking for a lease
- NC REALTORS: Summary of 2026 changes to NC REALTORS commercial forms
- Mecklenburg County: We Value Mecklenburg County: Update on 2027 Property Revaluation
- Mecklenburg County Office of Tax Administration: 2027 Revaluation: Schedule of Values, Standards, and Rules (slides, Sept. 1, 2026)
Frequently Asked Questions
The North Carolina Real Estate Commission lists gross, net and percentage leases as common types. Modified gross and base-year leases sit in between. The names vary, so read what each lease actually says.
Not necessarily. The base rent is usually lower because taxes, insurance and maintenance are added on top. Add those costs and any utilities you'd pay, then compare the totals per square foot.
The landlord and tenant split operating expenses according to the lease. There's no single standard split, so ask for a line-by-line list of who pays what.
