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NN Leases - Reserves & Capital Expenditures

Reserves and Capital Expenditures (CapEx) are important issues for property owners with a so-called "NN lease".

By Jonathan Hipp | Updated on May 15, 2013

Reserves and Capital Expenditures (CapEx) are important issues for property owners with a so-called “NN lease”. These lease agreements give the landlord responsibility for maintaining the condition of the roof and structure of their property. Expenses may consist of either repairs to existing property or replacement of property through capital improvements (CapEx), but both will involve an outlay of cash that is potentially large and unpredictable. How do you deal with this problem? Plan in advance to gradually build a reserve of funds that will be available when the bill comes due.

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