Understanding lease types - help!
Ok, so this may be either really dumb or blatantly obvious (or maybe I am over-thinking) but I need to ask regardless. I know the basic lease types, NNN, MG and FSG (I manage office space on the tenant side). My issue is when I read a new lease for the first time, I feel like I don't always immediately know what the lease recovery type is. I guess in my head, tenant is paying taxes, insurance and maintenance in one way, shape or form, whether it's structured as a NNN or FSG. Am I looking at it the wrong way? Are there any key indicators I should look for when reading through a lease and financials that should be a dead giveaway to determine if it's a NNN, MG or FSG?


[{"id": "dd14s1o", "text": "All leases are different, but a FSG lease will always reference a base year. \n\nUsually in an NNN lease, there's a section on operating expenses after the definition of rent. ", "replies": [], "depth": 1}, {"id": "dd1efc1", "text": "Look for the language around the tenant's \"proportionate share\" of the passthroughs. If it it says the the tenant pays just the increases above a base year. If it just says they pay their proportionate share it's net and if it makes no mention or says the landlord is paying it's a gross lease.", "replies": [{"id": "dd1egdn", "text": "edit: It's usually spelled out VERY explicitly in the LOI, well before you get to the more complicated lease.", "replies": [{"id": "dd1fulv", "text": "Thx. I basically inherited a ton of leases so most have been in place for quite awhile and not at LOI stage. I have no idea why this trips me up! I feel like everyone else understands something that I'm just not getting.", "replies": [{"id": "dd1gcy4", "text": "Gotcha. Hey, if you have a ton of leases, there are companies that basically will summarize a stack of leases and give you the cliff notes on each one for a reasonable fee. Google \"Lease Abstractor\".\n\nCould save you a ton of work and will keep you from missing important things like renewal options, rental rate increase dates, etc.", "replies": [{"id": "dd1i9ts", "text": "Thanks. We actually do outsource the abstracting...I'm just one of those people that likes to understand everything even if it's not specifically my job. Plus it bothers me that I understand the concept on paper, but when I read the lease it just isn't immediately obvious to me and I feel like I have to do detective work. Then there are other, more complicated leasing matters and financial calcs that come very easy to me...go figure.", "replies": [{"id": "dd1ljnp", "text": "There are so many different forms of leases, each formatted and worded differently and you are right the type of lease is often not obvious at a glance. I'm an attorney and it still takes a minute or two to locate the right section since there is no standard way of doing it.", "replies": [{"id": "dd1nj0z", "text": "Well that makes me feel a bit better! Thx.", "replies": [{"id": "dd1pc8q", "text": "Sounds like you are on the right path. Good luck!", "replies": [], "depth": 8}], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}]