In a triple-net (NNN) lease, the tenant pays for taxes, insurance, and maintenance on top of base rent – which means you, not the landlord, foot the bill when the roof leaks or the HVAC dies. Triple-net lease due diligence is the inspection process that tells you what you are actually agreeing to maintain before you sign. Skip it and you inherit deferred problems at full cost.
Why NNN tenants and buyers inspect
The whole point of a net lease structure is that the landlord shifts operating risk to the occupant. On a true NNN, the tenant is typically responsible for the building’s interior, the roof, the HVAC equipment, the parking lot, and often the structure itself, depending on how the lease defines the demised premises. That is a very different deal than a gross lease where the owner absorbs those costs.
Here is the trap: the lease language describes who pays, but it says nothing about condition. A landlord has every incentive to hand off a building with a 22-year-old roof and a parking lot full of alligator cracking, because the moment you sign, those become your problems. A pre-lease inspection is how a tenant pushes back with facts – either negotiating repairs before signing, capping a capital obligation, or walking away from a building that will bleed money.
This applies just as much to buyers acquiring a property with an NNN tenant in place. If you are purchasing a single-tenant net-leased asset, you are underwriting the building’s remaining useful life on every major system. A surprise roof replacement two years in can swallow a year of net operating income.
The capital items that actually hurt
Most NNN disputes are not about light bulbs or a leaky faucet. They are about the big-ticket systems that fail expensively and on their own schedule. A general commercial building inspection gives you a visual, non-invasive read on each of these so you can budget realistically.
The roof
This is the number one capital risk on almost every NNN deal. Flat and low-slope commercial roofs – the TPO, modified bitumen, and built-up membranes common across San Diego County’s industrial and retail stock – have a finite service life and visible warning signs long before they fail. An inspector documents ponding water, membrane shrinkage, failed seams, deteriorated flashing, and the condition of penetrations and drains. If the roof is near the end of its run, a full replacement on even a modest commercial footprint runs well into five or six figures. You want that number before you commit to maintaining it.
HVAC and rooftop units
Packaged rooftop units (RTUs) are the workhorses of commercial HVAC here, and they are expensive to replace. An inspection confirms the number of units, estimates their age from data plates, and notes whether they are running, the condition of the cabinets, and obvious signs of neglect. Three aging RTUs nearing failure is a meaningful future liability that belongs in your negotiation, not your first-year surprise budget.
Parking lot, paving, and site
Asphalt and concrete are easy to ignore until ADA compliance, drainage, or a trip-hazard claim forces the issue. Inspectors note cracking, settlement, failed striping, and accessibility concerns at entries and parking. Sealcoating is cheap; a full repave is not.
Plumbing, electrical, and the building envelope
Beyond the headline systems, the service line at a panel, the age and capacity of electrical service, water intrusion at the envelope, and the condition of the slab all factor into long-term cost. For older inventory, we sometimes recommend a sewer scope add-on with a camera, since underground lines are invisible from the surface and a collapse is a tenant problem under most net leases.
Establish a condition baseline before you sign
The single most valuable thing a tenant gets from pre-lease due diligence is a dated, documented condition baseline. When you eventually exit, the landlord will hold you to a surrender clause that requires returning the premises in good condition, “reasonable wear and tear excepted.” If you have no record of what you inherited, you are exposed to being charged for damage that predated your tenancy.
A thorough commercial property condition assessment creates that record. It photographs and describes the state of every major system on the day you took possession, which becomes your evidence in any move-out dispute. It also gives you the data to build a realistic capital reserve so a roof or HVAC failure is a planned expense rather than a crisis.
Use the report to negotiate, too. Common, reasonable asks include: the landlord repairs or replaces systems already at end of life; a dollar cap on your roof or structural obligation; a warranty period on the systems that were near failure; or a rent concession that funds your future reserve. None of those conversations happen credibly without an inspection backing them up.
Match the inspection to the lease language
Read your lease’s repair-and-maintenance and surrender clauses before the inspection, then tell your inspector what you will be on the hook for. If the lease makes you responsible for the roof structure and membrane, the roof inspection needs to be detailed. If structure is carved out to the landlord, the focus shifts. The goal is to inspect against your actual obligations, not a generic checklist.
Where a single-tenant building anchors your business, it is also worth a dedicated roof inspection and, for assets you plan to hold, a maintenance program afterward. Staying ahead of small roof issues is far cheaper than reacting to a failure – the logic behind ongoing commercial roof maintenance.
What a general inspection does and does not cover
Be clear on scope so you commission the right specialists. A general commercial inspection is a visual, non-invasive assessment of accessible systems. It does not include a structural engineer’s load or foundation analysis, environmental testing for asbestos, lead, or mold beyond visual observation, or a termite and wood-destroying-organism report, which requires a licensed pest operator. On commercial deals, many buyers and tenants commission those as separate Phase I environmental and engineering studies. We will tell you when a finding warrants one rather than guessing.
Talk to a San Diego commercial inspector
If you are evaluating a triple-net deal anywhere in San Diego County, get the building inspected before you sign – the cost is trivial against a single capital surprise. The Real Estate Inspection Company performs visual commercial inspections and condition assessments countywide; owner and lead inspector Joseph Romeo is an InterNACHI Certified Professional Inspector and holds CSLB General Contractor License #1113143. Call (619) 752-4399 or reach out through our contact page to scope a pre-lease inspection.
Related reading: our guide to commercial property condition assessments, what to inspect when buying a multifamily building, and the limits of a visual inspection.
