I'm looking to lease office space I was told $1.85 NNN plus 2.5% increase. What does this mean

NNN means "triple net lease" which requires you, the tenant, to pay the property tax, the insurance, the maintenance and the utilities for the property.

If your location is similar to where I am (NYC), the $1.85 would mean that you are paying $1.85 per square foot per year on your lease. The 2.5% would mean that this rate goes up 2.5% each year.

On a 5000sqf site, you would be paying $9250/year, which would work out to be $770.83/month (for the first year at least). You would also be in charge of paying the utility bills for your space as well as the property tax and any maintenance.

I'm not 100% positive, but I think that on a NNN lease, the building owner is only responsible for the upkeep of the shell of the building, ie. make sure the roof doesn't leak, etc. You as the tenant would be responsible for any upkeep inside the space (leaking faucets, clogged toilet, etc).

I would confirm this with your real estate broker though as conditions certainly change from market to market.

The $1.85 is per square foot per month. NNN is a triple net lease where you are responsible for your share of taxes, building maintenance and all maintenance within your unit. And %2.5 is probably the increase per year that you'll pay for rent. Office rental usually goes up by a percentage each year for the life of the lease.

You're going to have triple net lease. 2.5% is a pretty normal rate, I pay 2% per year, but the landlord was not careful in writing the lease so I got it to start after the first five. I wouldn't count on that. And the $1.85 is subjective to where you live. Check on some other locations, see what the going rate is. you can always contact a commercial real estate agent. Tomlinson Black or Keller Williams (who I used) would be able to make sure you get the best possible deal and can take care of little stuff for you.

Good luck!