Alaska has all types of commercial properties available for leasing.

These are the three main types of lease agreements commonly used across the state.

1. Gross Lease or Full-Service Lease

   Under this type of agreement, the tenant only pays for a fixed “all-inclusive” rental rate that includes the rent and a few business-specific expenses like utilities and janitorial services.

   Expenses that have to do with the building, including the taxes, maintenance, and insurance, are paid for by the landlord out of the rents received from tenants.

With little to no increasing service or utility charges, expenses are easy to forecast.

Net Lease

In this type of lease, tenants enjoy lower rent but shoulder a portion of the building’s expenses. This agreement has four categories. Each one puts a bigger portion of the building’s expenses on the tenant.

• Single Net Lease (N Lease)
  Tenants pay for all or part of the property taxes of the building in addition to the rent.
• Double Net Lease (NN Lease)
  Tenants are responsible for paying the building insurance and taxes, in addition to the rent. Only structural repairs are left to the landlord.
• Triple Net Lease (NNN Lease)
  Tenants pay for a part, or all of the three “nets” – the insurance, property taxes, and common area maintenance on top of their base rental rate. The operating expenses and utilities of common areas are often included as well.
• Absolute Triple Net Lease
  Also known as the “hell or high water lease,” this uncommon agreement gives tenants full responsibility over the commercial property.

  Aside from the rent for occupancy, property taxes, insurance, and maintenance, tenants are also expected to pay for construction costs in the event of a catastrophe. Tenants who enter into this agreement are also bound to pay even after the property is condemned.

Modified Gross Lease

A modified gross lease incorporates features of net and gross lease agreements. Tenants pay a lump sum.

However, during the negotiation period, tenants and landlords can agree on the type of building expenses to include in the lump sum: the building insurance, property taxes, and common area maintenance costs.

Like net leases, the base rent is also significantly lower to accommodate all or a portion of additional building expenses.

This lease gives tenants better control of their expenses. Additionally, unlike net leases, lease rates don’t increase if the building expenses rise.