Full Service Gross Lease: What It Means and Why It Matters

In the world of commercial real estate, lease structures can be complex and often confusing. Among the most tenant-friendly and widely used options is the full service gross lease. This type of lease is especially common in office spaces and high-end commercial properties where tenants prefer financial predictability and simplified management. In this article, we'll explore what a full service gross lease involves, why it may be the right choice for some businesses, and how it compares to other lease types.

What Is a Full Service Gross Lease?

A full service gross lease (also simply known as a "full service lease") is a commercial leasing arrangement where the tenant pays one consolidated monthly rent. That rent covers not only the use of the space, but also most — if not all — of the operating expenses associated with the property.

These expenses typically include:

• Property taxes

• Building insurance

• Utilities (electricity, water, heating, etc.)

• Janitorial services

• Common area maintenance (CAM)

• Repairs and general upkeep

In this model, the landlord takes on the financial responsibility for these operational costs. For tenants, this translates into a consistent monthly payment without the worry of surprise maintenance bills or rising utility rates.

Benefits for Tenants

There are several compelling reasons why businesses choose full service gross leases over other lease types:

1. Budget Certainty

With one fixed payment, companies can plan their monthly budgets without fluctuations from variable building expenses.

2. Operational Simplicity

Tenants don’t need to manage multiple vendors or track fluctuating costs. This is especially useful for smaller teams or businesses that want to focus on growth without administrative distractions.

3. Time Efficiency

Property maintenance, repairs, and service coordination are handled by the landlord, freeing tenants to focus on their core operations.

Key Considerations Before Signing

Although the simplicity of a full service gross lease is attractive, there are important factors to be aware of:

- Higher Base Rent

Since the landlord assumes the risk of operating expenses, the base rent may be higher than in other lease types. However, that premium often balances out against the predictability and time savings.

- Expense Escalations

Many full service leases include an "escalation clause" or "base year clause." This means if operating expenses increase significantly after a base year, the tenant may be responsible for their proportional share of the difference.

- Limited Transparency

Because the landlord controls the building’s operations, tenants might not have detailed visibility into how funds are allocated or how service providers are chosen.

Comparison With Other Lease Types

Lease Type	Tenant Pays	Landlord Pays
Full Service Gross	One fixed rent payment	All building expenses
Modified Gross	Base rent + selected expenses	Remaining shared costs
Triple Net (NNN)	Base rent + all operating expenses	Typically just structural repairs

This chart highlights how much more responsibility — both financial and operational — the landlord assumes in a full service gross lease compared to net lease structures.

Is a Full Service Gross Lease Right for You?

A full service gross lease is ideal for companies that:

• Want predictable monthly expenses

• Prefer not to manage or negotiate utility and maintenance services

• Lease office space in multi-tenant or premium buildings

However, businesses with in-house facilities teams or those seeking greater cost control might prefer a net or modified gross lease.

Conclusion

A full service gross lease offers a streamlined, all-in-one payment solution for tenants who prioritize convenience, predictability, and simplicity in their commercial real estate contracts. While the higher base rent may not appeal to every business, the benefits in reduced administrative hassle and financial stability often outweigh the cost — especially for companies focused on growth and efficiency.

Before committing to any lease, it’s essential to read the fine print, understand potential escalations, and seek expert advice to ensure your lease terms align with your business goals.