Understanding Industrial Real Estate OPEX and NNN Charges
Operating expenses, also known as OPEX or NNN charges, are an essential element in commercial and industrial real estate leases. Properties listed for lease can include additional charges, such as NNN or OPEX. As industrial real estate agents in the Reno/Sparks market, we are familiar with these terms. But prospective industrial users often ask us, "What is OPEX, and what does it entail?"
OPEX is the building owner’s way of recouping building costs and expenses, and it can also be called NNN costs. A triple net lease is a lease structure that makes tenants responsible for their share of any operating expenses associated with a property, through reimbursement. In contrast, a building owner with a triple net investment is not responsible for paying any operating expenses.
In addition to the base rent, tenants pay OPEX expenses, typically based on the square footage of the leased building, to reimburse the building owner for property taxes, insurance, and common maintenance areas. Common maintenance areas, such as parking lots, landscaped areas, sidewalks, driveways and trash areas, are the responsibility of all tenants. Furthermore, if any capital improvements, property management, or administrative costs incur, tenants share these expenses as well.
However, OPEX and NNN do not include expenses directly related to a tenant and their leased space, such as separately metered gas, electricity, water costs, janitorial or repair costs for the interior of their space, including interior doors, ceilings, and interior walls. It is essential to understand your lease document's OPEX clause to prevent any confusion about your financial responsibility. An experienced agent will help guide you through the process and your expected expenses. If you are just getting started in the Reno area or established and looking to re-locate or expand your current facilities, let the team at Miller Industrial Properties help you streamline your process.
At Miller Industrial Properties, we want to help commercial and industrial real estate users make informed decisions about their investments, leasing, buying, or selling. Whether you are relocating, expanding, or establishing facilities in the Reno area, contact our experienced team to help streamline the process. If you find these posts informative, please spread the word via Facebook, Twitter, LinkedIn, Google+, or email.