# Industrial Lease Structures Research

## Purpose

- Supports `knowledge/industrial-lease-structures.md`
- Intended to justify reusable guidance on how U.S. industrial leases are commonly structured and abstracted

## U.S.-Only Assumptions

- Focus is U.S. industrial leasing practice
- The file is issue-spotting oriented, not a state-law treatise
- Common structures include triple net, modified gross, and negotiated hybrid reimbursement arrangements

## Source Table

| Source | Publisher | URL | Publish Date | Access Date | Source Type | Notes |
|--------|-----------|-----|--------------|-------------|-------------|-------|
| Commercial Real Estate Terms and Definitions | NAIOP | https://www.naiop.org/education-and-career/industry-terms-and-definitions/ | n.d. | 2026-04-22 | Institutional glossary | Shared industrial lease terminology |
| Annual Report | Rexford Industrial Realty / SEC | https://www.sec.gov/Archives/edgar/data/1571283/000157128323000019/rexfordindustrialrealty_ars.pdf | 2023-02 | 2026-04-22 | Primary public filing | Triple net or modified gross operating structure |
| 2025 Annual Report | STAG Industrial / SEC | https://www.sec.gov/Archives/edgar/data/0001479094/000147909426000009/stag-20251231.htm | 2026-02 | 2026-04-22 | Primary public filing | Lease duration and industrial operating profile |
| Q4 2025 and Full Year 2025 Earnings Release | Prologis / SEC | https://www.sec.gov/Archives/edgar/data/1045609/000119312526017256/pld-ex99_1.htm | 2026-01 | 2026-04-22 | Primary public filing | Leasing economics and rollover cost context |
| Rent Abatement in Commercial Leases: Free Rent & CAM Impact | CAMAudit | https://www.camaudit.io/resources/lease-language/rent-abatement-clause | 2026-04 | 2026-04-22 | Practitioner explainer | Abatement and reimbursement treatment |
| Commercial Lease Addendum for Expense Reimbursement | HAR Form Library | https://content.har.com/FormManager/pdf/20.pdf | 2025-12 | 2026-04-22 | Quasi-primary form source | Expense reimbursement line items and exclusions |
| Assignments and Subletting in Commercial Lease Transactions | Cozen O'Connor | https://www.cozen.com/admin/files/publications/CommercialLeaseTransactions_022112.pdf?embed=1 | 2012-02-21 | 2026-04-22 | Legal commentary | Assignment / sublet mechanics |
| Commercial Lease Assignment and Sublet Provisions | Colorado Lawyer | https://cl.cobar.org/features/real-estate-law/ | 2024-01-24 | 2026-04-22 | Legal commentary | Continuing liability and consent standards |
| Estoppel Certificates | Maslon | https://www.maslon.com/webfiles/maslonattorneypublications/prel1405_jacobson.pdf | 2014-05 | 2026-04-22 | Legal commentary | Estoppel and lender diligence function |
| 10 Step Commercial Lease Guide | Bernhard Law Firm | https://www.bernhardlawfirm.com/documents/WP-10StepLeaseGuideR.pdf | 2025-10 | 2026-04-22 | Legal/practitioner guide | Repairs, structure, roof, and operating obligations |

## Key Findings

- Industrial lease structures are often described as NNN, but the real economic outcome depends on what is reimbursed, excluded, capped, grossed up, or carved out.
- Lease-structure guidance should focus on:
  - base rent
  - taxes
  - insurance
  - CAM or operating expenses
  - capital improvements
  - roof / structure / slab / HVAC obligations
  - assignment and subletting
  - estoppel / SNDA / lender cooperation
- Assignment and subletting clauses deserve special attention because industrial users often need flexibility for restructurings, affiliate transfers, partial disposals, or space rationalization.
- Estoppel and SNDA provisions materially affect sale and financing execution and should be treated as core lease-structure items.

## Benchmark and Formula Decisions

- The knowledge base should organize industrial lease structures into:
  - triple net
  - modified gross
  - hybrid reimbursement
  - build-to-suit / specialized allocation considerations
- It should include a checklist of abstract fields rather than hard legal conclusions.
- It should caution users not to infer roof, structure, slab, or dock obligations from the NNN label alone.
- It should explicitly remind users that abatements and concessions can affect reimbursements differently than base rent.

## Conflicting Source Resolution

- Form documents and legal articles differ by jurisdiction and drafting style. The knowledge base should abstract recurring issue categories rather than imply uniform outcomes.
- Public REIT disclosures confirm broad lease-structure patterns but are not substitutes for abstracting the actual lease language.

## Edge Cases and Red Flags

- Full NNN labels that still leave landlords with major structural or parking-lot obligations
- Modified gross language with annual resets that function more like partial pass-throughs
- Capital improvement language that effectively shifts major building systems to tenants
- Assignment clauses with recapture, profit-sharing, or overly narrow affiliate exceptions

## Open Questions

- Whether future versions should include state-law caution boxes for a few major industrial markets
- Whether a separate shared estoppel and SNDA note should be created for all sectors
- Whether later sector packs should use a common commercial lease issue taxonomy
