How to Read a US Commercial Lease Before You Sign (NNN and CAM Fees Explained)

Commercial listings advertise a base rent per square foot, and first-time restaurant owners often budget against that number alone. In almost every US commercial lease, base rent is only the starting point. What you actually pay each month is base rent plus a set of additional charges that can add 30-50% or more on top, and if you don't know what those charges are before you sign, you'll find out the hard way in your first CAM reconciliation.

"Triple net" (NNN) means the tenant pays three additional categories on top of base rent: property taxes, building insurance, and common area maintenance (CAM). The landlord passes these costs through instead of absorbing them into a single all-in rent figure. A "NNN" listing at $30/sqft is not a $30/sqft lease — it's a $30/sqft base plus whatever taxes, insurance, and CAM add, which varies enormously by property and needs to be asked for explicitly, in writing, before you compare it to any other listing.

Common area maintenance covers shared costs: parking lot upkeep, landscaping, common-area utilities, management fees, sometimes even a share of roof or HVAC repairs depending on the lease. CAM is often estimated at lease signing and then "reconciled" annually against actual costs — meaning you can get a bill months later for the gap between what you were charged and what the landlord actually spent. Ask for the last two years of actual CAM history from existing tenants in the same property, not just the landlord's estimate, before you sign.

Many mall and shopping-center leases use percentage rent: a lower base rent plus a percentage of sales once you cross a set "breakpoint." This can work in your favor at low sales volumes and against you once you're doing well — read the breakpoint calculation carefully, understand whether it's a "natural" breakpoint (base rent divided by the percentage) or an artificially low one the landlord set to capture upside sooner, and model what percentage rent actually costs you at your realistic sales level, not just your opening-month projection.

A co-tenancy clause ties your rent or lease terms to another tenant (usually an anchor) staying open in the property — if the anchor leaves, you may get reduced rent or an early exit right, which sounds protective, but check whether it actually triggers automatically or requires you to prove damages first. An exclusivity clause can protect you from a competing concept opening in the same center, but only if you negotiate for it; it is never automatic, and landlords will not offer it unless you ask.

Many landlords, especially for a first location, will ask for a personal guarantee — meaning you're personally on the hook for the lease even if the business fails and the LLC shuts down. This is negotiable more often than founders assume: a capped guarantee (limited to a fixed dollar amount or a set number of months), a burn-down guarantee (the personal liability shrinks over time as you prove the business is stable), or a guarantee tied only to the first year are all common asks that many landlords will accept rather than lose a qualified tenant.

Property A quotes $28/sqft NNN with estimated CAM of $6/sqft, taxes and insurance passed through separately at roughly $4/sqft — an effective $38/sqft all-in. Property B quotes $32/sqft NNN with CAM, taxes, and insurance bundled into a flat $6/sqft additional charge — an effective $38/sqft all-in too. Same total cost, but Property A's CAM is an estimate subject to annual reconciliation and could run higher; Property B's flat structure is more predictable. The "cheaper" quoted base rent (Property A) isn't actually cheaper once you account for reconciliation risk — and neither number tells you anything until you get it in writing.

None of this is a reason to avoid a location — it's a reason to never compare two properties on base rent alone. The only number that means anything is the fully loaded, all-in occupancy cost, checked against your realistic revenue for that specific unit, in that specific micro-market.

If your restaurant doesn't work out or you want to sell the business later, your ability to assign the lease to a buyer or sublet the space matters enormously — and it's rarely automatic. Many leases require the landlord's consent for any assignment or sublet, sometimes "not to be unreasonably withheld," sometimes with no such limiting language at all, meaning the landlord could refuse for any reason or no reason. Negotiate for reasonable-consent language before you sign, not after you need it.

A lease with a renewal option sounds like security, but check how the renewal rent is set. Some leases fix the renewal rent in advance (predictable but can be below or above market by the time you get there); others reset to "fair market rent" as determined by an appraisal process that favors whichever side has more negotiating leverage at that point, which is often the landlord if your business has become dependent on that specific location.

A Viabe.ai Location Intelligence Report builds the all-in occupancy math into your analysis alongside real rent benchmarks and revenue scenarios for the specific address — so you're deciding on the real number, not the one printed on the listing.