Triple-net (NNN) lease
A lease under which the tenant pays rent plus property taxes, insurance and maintenance, leaving the landlord with a cleaner rental income stream.
How it works
Under a triple-net (NNN) lease the tenant pays rent plus the property's taxes, insurance and maintenance costs. The landlord receives rent largely free of operating costs, which makes the income stream simple and predictable. Many hyperscaler data centre leases, especially powered shell leases, are on triple-net or similar terms.
In GPU and data centre deals
Lenders like triple-net leases because the landlord's cash flow is close to the rent itself, with limited exposure to cost inflation. That supports higher leverage and longer debt. The questions move to the gaps: which costs remain with the landlord, such as structural repairs or capital replacement, and how utility power is billed.
What gets negotiated
- Costs left with the landlord, especially structural and capital items
- Insurance requirements and loss payee provisions for lenders
- Tenant obligations to maintain and return the building at expiry
- Utility power billing: direct to tenant or through the landlord
In the filed deals
Hut 8's River Bend lease and Meta's Hyperion leases are triple-net.
For in-house counsel
Take it to the documents
The filed wording behind GPU and data centre financings, for either side of the table. Previews are open; the full text is free with InfraCompute Weekly.
- Financing clause libraryCash traps, coverage ratios, cures and step-in, from the filed deals.
- Contract libraryGPU contracts, leases, power, equity and JVs, quoted from filed contracts.
- Issues list builderBuild an issues list from the lender’s or the borrower’s side.
- The legal desk for in-house counselContract library, issues lists, checklists and English law notes.
Related terms
Explanatory definition, not a statement that a particular transaction contains this term or a substitute for its contractual definition.
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