What type of lease includes operating expenses such as insurance, real estate taxes, and utilities within the base rent?

A gross lease includes operating expenses such as insurance, real estate taxes, and utilities within the base rent. In this type of lease, the landlord is responsible for covering these operating costs, which means that the tenant pays a single amount for the rent that encompasses both the base rent and the extra expenses. This arrangement simplifies the budgeting process for tenants, as they do not need to account for variable expenses on top of their rent.

In contrast, a net lease would typically require the tenant to pay some or all of these expenses separately from the base rent, which introduces variability in the tenant’s total costs. A net-net lease goes further by requiring tenants to cover not only property tax and insurance but also maintenance costs. An absolute net lease places nearly all financial obligations, including structural maintenance and management fees, on the tenant, thus making the distinction of a gross lease even clearer in terms of expense coverage.