Net Lease vs Gross Lease: Which One a Manhattan Office Will Actually Offer You

The difference between a net lease and a gross lease is who pays the building's operating expenses, real estate taxes and insurance. Under a gross lease they are inside the rent. Under a net lease the tenant pays its share of them on top of a lower base rent. A Manhattan office will almost always offer you a modified gross lease: one rent covers those costs at base-year levels, you pay your share of later increases, and electricity is billed separately. If you are holding two quotes that are not quoted the same way, neither number means much until you know what sits inside it.

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Updated 2026-10-03 · Nomad Group

Net and gross, side by side

Real estate taxes. Gross: in the rent. Net: your share billed on top.
Building insurance. Gross: in the rent. Net: your share billed on top once the lease is double or triple net.
Operating and maintenance costs. Gross: in the rent. Net: still the landlord's on a single or double net lease, yours on a triple net.
The quoted number. Gross: higher, with fewer surprises. Net: lower, and incomplete until the pass-throughs are added.
Who carries rising costs. Gross in its pure form: the landlord. Net: the tenant.

What a Manhattan landlord will actually put in front of you

Hardly any Manhattan office lease is purely one or the other. What you will be handed is modified gross with a base year. The quoted rent already contains the building's running costs and taxes at the level of the base year, typically year one of the term. After that, any growth above that level is shared among the tenants, and your portion arrives as additional rent.

That puts a first-time tenant in the middle: shielded from what the building costs to run now, exposed to how fast those costs rise. In smaller loft buildings a landlord may drop the pass-through altogether and write a flat yearly percentage increase into the lease, which is easier to budget. Operating expenses explains how the share is calculated.

Is the gross quote always the cheaper one?

No, and neither is the net one. A gross rent folds the building's costs into one figure and a net rent lists them separately, so either can come out ahead once everything is counted. The mistake is setting a net face rent beside a gross face rent and choosing the smaller number. Convert both to what you would pay in total, per square foot, over the whole term, then compare.

Four checks before comparing two asking rents

Gross or net. Ask in those words, and ask what the rent includes.
The base year. Which year it is, and whether it is a full year with the building normally occupied.
Electricity. Submetered or a fixed charge, and at what rate. Expect something like $2 to $4 a square foot over a year.
The operating expense definition. Whether capital projects and the landlord's financing or leasing costs are excluded, and whether you have a right to audit.

A quote that cannot answer these is not ready to be compared. Lease red flags lists the base-year and escalation games to watch for in a first draft.

The quotes a team of about 20 would be collecting

A 20-person team plans on about 3,500 rentable square feet and usually tours three to five floors. The floors listed below fall in that size range. Their asking rents are quoted the Manhattan way, gross per rentable square foot per year, so they compare directly with one another, and with a net quote only after its pass-throughs are added. Office space for 20 people has the wider list.

Floors that fit a team of 20

Live from our listings · 6 of the 20, smallest first

A team of 20 plans on about 3,500 square feet at 175 a person. 20 floors on our book sit in the range that fits, 3,500 to 6,300 square feet, asking $50 to $135 per square foot per year.

Floors: 20
Sizes: 3,500-6,100 sq ft
Asking rent: $50-$135 / sq ft

Every available floor, filterable by size →

The full guide

This page is the short answer. The long one, with the numbers worked through, is here:

Which is better for a first-time tenant, net or gross?

In a Manhattan office the choice is mostly made for you: the building's standard form will be modified gross. What you control is the detail inside it, especially the base year, the expense definition and how electricity is billed.

What is a base year, in one line?

It is the yardstick year. Whatever the building spent on taxes and operations that year is treated as already in your rent, and only later growth beyond it is passed on to you, in proportion to your space.

A listing calls its rent full service. Is that a gross lease?

Usually, with a caveat. As a lease term, full-service gross describes a rent with taxes, insurance and operating expenses already inside it, though a Manhattan landlord will normally still pass through increases over a base year. In marketing copy the same words can describe a furnished, serviced floor. Ask which one a listing means. Gross lease vs net lease covers both uses.

Who checks the quotes for me?

A broker on your side puts every landlord proposal on one basis before you choose. On your search, we work for you. As for cost, in most transactions the landlord pays the broker fee.

Talk to a broker

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Tell us three things: team size, timing, budget. A first shortlist can be ready within 24 hours, with the asking rent on every floor that publishes one.

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