NNN for smallish place in Seattle Suburb?
Warning: I am a babe in the words about commercial real estate. I paid cash for a storefront in the Microsoft (I mean, Seattle) suburb of Duvall, WA. It's 770 square feet, in a good location (on the main street, which gets a ton of traffic from Microsofties on their way to/from work). I was going to start a restaurant but am doing a software startup elsewhere.

My NNN is about $500/month. The storefront is managed by an HOA that also manages a large apartment building behind the storefronts. HOA is $230, state taxes are $220, sewer/trash/water about $50.) 

Prospective tenant (massage therapist, referred to this location by the previous tenant, a chiropractor who has expanded to a bigger place next door) expects $500/month rent and doesn't understand triple net.

Is my NNN standard, or is it so high that an NNN deal will look weird (rent of say $600, plus NNN of $500)? It occurs to me now that every time I've called commercial real estate brokers, they have glided over NNN numbers and have NEVER given me anything solid.

Thanks for your guidance. I've lurked here a long time &amp; love the vibe.

[{"id": "cqipy64", "text": "It's just a way to easily describe it to prospective tenants. As the owner you can do whatever you want. \n\nIn this case you would probably want to do a MG (modified gross), you pay taxes, insurance, maintenance and they pay utilities. Just reflect the cost of this in the price.\n\nNNN is usually what investors want so it's easier to manage large portfolios of properties. Or if you know these costs can rise quickly.", "replies": [{"id": "cqiq8k0", "text": "Thanks much, [/u/NeesonsAndWilly](http://www.reddit.com/user/NeesonsAndWilly). I hadn't run across MG before.", "replies": [], "depth": 2}], "depth": 1}, {"id": "cqiyh9q", "text": "I tend to look at NNN's on a per square foot basis. Yours are at $7.79/SF which is a little on the high side typically though looking at the other three available properties in Duvall maybe not so much. \n\nThe Valley Center has a couple small vacancies asking $14/SF with NNN's at $6.32/SF. River View Plaza has a few vacancies ranging in size. They're asking $18/SF with NNN's at $8.42/SF for smaller space. Copper Hill Square has a 640 SF suite asking $18.75 under a Modified Gross lease that promotes their lack of NNN charges.\n\nIf the rent you're asking is actually $600/month, in other words, $9.35/SF with NNN's at $7.79/SF then you're within the range of other properties in your market (having no information on your property, of course). \n\nYou could instead consider marketing it on a gross or modified gross basis asking around $17.14/SF ($9.35/SF rent + $7.79/SF expenses) if it seems like those who are interested in the space understand or expect gross leases. \n\nI'm an appraiser not a broker though.", "replies": [], "depth": 1}, {"id": "cqiyk9j", "text": "NNN pricing is confusing to a lot of smaller tenants.  In that size range you are likely to get feed back like 'why should I pay taxes, insurance, etc the landlord should pay those!'.  \n\nI have to assume it is a shorter term lease anyhow so you should be able to accurately forecast those expenses and build them into rent pretty easily.  \n\nYour actual lease will be more complicated under a NNN structure too with language for reconciliation etc typically.  \n\nYour NNN's are very high in ratio to rent too.  \n\nFor all those reasons, I would ditch the NNN pricing on a space like you are describing.  \n\n", "replies": [], "depth": 1}, {"id": "cqiykdv", "text": "Your NNNs are high at $7.79/SF. Plus your situation is unique, $3.58/SF for HOA dues is not normal. You are going to have to be up front with any tenant on this and I suggest you go modified gross and charge them utilities. \n\nNNNs in the area for average retail are around $5/SF or $321 per month (this varies of course).", "replies": [], "depth": 1}]