When you start searching for warehouse space in the Inland Empire, you'll quickly encounter two lease structures: Triple Net (NNN) and Gross (Full Service). Understanding the difference is critical — it affects your actual monthly cost by hundreds or thousands of dollars.
The vast majority of industrial leases in the Inland Empire are quoted on a Triple Net basis. Here's what that means:
You pay:
The base rent is what you see advertised (e.g., "$1.25/SF NNN"). The NNN expenses — often called "operating expenses" or "CAM charges" — are on top of that and typically range from $0.08 to $0.18/SF/month in the Inland Empire.
Example: A 20,000 SF space at $1.25 NNN with $0.12 in NNN expenses = $1.37/SF all-in = $27,400/month total.
Always ask the landlord or their broker for a current NNN estimate before making an offer.
Under a Gross (or Full Service) lease, your monthly rent includes everything: base rent, property taxes, insurance, and maintenance. You write one check and you're done.
Gross leases are more common in office buildings and some older industrial parks. They're simpler to budget but typically have a higher base rate than NNN because the landlord is covering all operating costs upfront.
Modified Gross is a hybrid — some expenses are included in the base rent (often utilities or minor maintenance) while others (like taxes) are passed through separately. Read your lease carefully.
| NNN Lease | Gross Lease | |
|---|---|---|
| Base rate | Lower | Higher |
| Additional expenses | Taxes, insurance, CAM | Included |
| Budgeting complexity | Higher (expenses fluctuate) | Lower (one fixed payment) |
| Common in IE industrial? | Yes — dominant structure | Rare in newer product |
Tax reassessment: When a building sells, California's Prop 13 can trigger a significant property tax increase. If you're signing a NNN lease shortly after a building sale, ask whether the tax estimate already reflects the new assessed value — or whether you could see a big jump mid-lease.
CAM caps: Negotiate a cap on annual CAM increases — typically 3-5% per year — so you're not surprised by a sudden spike in operating expenses.
Audit rights: In a NNN lease, you have the right to audit the landlord's operating expense reconciliation. Include this in your lease and exercise it if expenses seem unusually high.
In the Inland Empire, you'll almost certainly be signing a NNN lease. Get the NNN estimate in writing, build it into your budget, and negotiate a CAM cap. A good tenant rep can walk you through the numbers and help you catch the landmines before you sign.