Commercial Gross Lease Agreement

A commercial gross lease agreement is a typical rental contract between a landlord and a business tenant, often used for retail spaces and offices. This full-service lease type features a fixed rent that includes operational expenses, such as property taxes, maintenance, and insurance. The predictable monthly expense makes this type of lease beneficial for business owners.

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Last updated January 2nd, 2025

A commercial gross lease agreement is a typical rental contract between a landlord and a business tenant, often used for retail spaces and offices. This full-service lease type features a fixed rent that includes operational expenses, such as property taxes, maintenance, and insurance. The predictable monthly expense makes this type of lease beneficial for business owners.

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Summary of Lease Type

  • Tenants: Pay base rent and utilities (if negotiated).
  • Landlord: Pay building expenses, including maintenance, insurance, and real estate taxes.
  • What to know: You can incur additional expenses beyond your base rent after the first year of your tenancy.
  • Typical usage: Retail and offices

Key Things to Know About Commercial Gross Lease Agreements

  • Fixed Monthly Rent: The tenant pays a set rate that includes property taxes, insurance, and maintenance.
  • Predictable Expenses: Consistent monthly costs make budgeting easier for tenants.
  • Limited Tenant Responsibilities: Landlords are responsible for operational expenses like building maintenance
  • Landlord Obligations: The property owner covers all building-related expenses.
  • Lease Structure: Commonly used in multi-tenant properties like office buildings or retail centers with shared space.
  • Best Suited For: Businesses seeking financial dependability and minimal involvement in property management.

Who is Responsible for Paying Utilities? 

Utility payment in a full-service lease agreement depends on the terms of the contract.

What are Operational Expenses? 

The landlord in a commercial gross lease agreement is responsible for the operational expenses of the property. These costs include property taxes, insurance premiums, and building maintenance.

Sample

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