Net vs gross lease: what you actually pay

A quoted rate means nothing until you know which structure it sits in. A $20 net rate on a building with $18 of additional rent costs a tenant $38 per sf per year. A $30 gross rate costs $30. The lower headline is the more expensive lease.

The practical test is who carries operating-cost risk. Under a net lease, every tax reassessment, insurance renewal and roof repair that qualifies as recoverable flows to the tenant in the following year's reconciliation. Under a gross lease with a base year, only the increase above that base year flows through, and only to the extent the lease says so.

Model both structures on the same term before you compare. The lease engine on this site totals net rent, additional rent and inducements into one occupancy cost per sf per year, which is the only number that compares cleanly across offers.