Triple Net (NNN) + E (Energy) Leases

A triple-net (NNN) or triple-net + energy (NNN+E) lease requires tenants to pay rent plus property taxes, insurance, and maintenance/operating expenses.

As new climate change laws come into effect, many landlords are looking to pass on the expenses involved in making the buildings more energy-efficient, and/or the penalties incurred due to excess carbon emissions. 

Triple-net-plus leases (NNN) and NNN+E (energy) are prevalent in many major metropolitan areas.

• Many commercial tenants must agree to these leases, with few other options offered in certain cities.
• Cities affected include Houston, Dallas, Fort Worth, San Antonio, and Austin, TX, plus Chicago, IL, and Boston, MA.

Most REIT (real estate investment trust) commercial office buildings operate on a cost per square foot for the CAM charges (common area maintenance). In buildings where triple-net (NNN) or triple-net + energy (NNN+E) leases are standard practice, utility charges are allocated based on the number of square feet under contract and do not take into account the tenant's actual energy consumption.

Submetering allows tenants to be billed for their energy use. Building owners can find the tenants who consume the most energy and work with them to reduce energy consumption.   

Advantages of submetering

• Tenants want to pay for their energy use only and not pay for other tenants who keep their air conditioning on 24 hours a day.
• As workforce habits change, such as telecommuting, building occupancy changes and utility costs along with it. 
• Tenants recognize that their energy usage affects their costs and that conservation methods can reduce the load on the power grid and carbon emissions. Sustainability is important to many tenants.
• Submetering provides property owners and facility directors with tenant energy usage data to help conserve energy and avoid skyrocketing utility bills during extreme weather, especially in the summer and winter months.

Submetering captures open-space utility usage to ensure all tenants are billed accurately and all utility costs are reimbursed.

• Through our remote and manual meter read options, information is captured digitally on the cloud, making it easier for you to allocate the cost of utilities directly to the tenants. 
• Verifiable, accurate reading of meters
• Real-time reporting of anomalies with alert notifications
• Billing package checked for accuracy before invoicing tenants 
• Operations Center available to you with a team of billing analysts to answer your questions and advise you of any issues
• Access to data through mobile app and customer web portal