Gross Lease

In a gross lease, the tenant's rent obligation is an all-inclusive figure — the landlord absorbs property taxes, building insurance, and common area maintenance costs. This structure offers predictability for tenants, as monthly costs remain stable regardless of fluctuations in operating expenses. Modified gross leases — a common variation — split some expenses between landlord and tenant (e.g., tenant pays electricity while landlord covers taxes and insurance). Gross leases are less common for healthcare properties in the Chicago suburbs than NNN leases, but may be found in multi-tenant office parks or converted retail spaces. Healthcare operators should compare gross lease quotes carefully against NNN equivalents to determine which offers better overall value.

Gross leases offer budget predictability but often come with higher base rents to offset the landlord's assumption of operating costs. Understanding the lease structure helps healthcare operators make accurate comparisons across different properties.

A behavioral health practice signs a modified gross lease for $38/sq ft all-in, with the landlord covering taxes, insurance, and CAM. The tenant only pays for electricity and phone services separately.