Gross Lease

A gross lease is one where the tenant pays a single rent and the landlord pays all operating expenses: taxes, insurance, maintenance, management and any utilities included in the deal. It is the structure of almost every residential lease, and it is the case where the full expense list comes out of NOI.

Under a gross lease the landlord's NOI carries every cost of the building. The default property is a gross lease in this sense. The tenant pays $2,500 and nothing else, and the owner pays $3,600 in taxes, $1,500 in insurance and $5,130 for maintenance, reserves and management, leaving $18,270 of NOI from $28,500 of collected rent.

The contrast is a net lease, where some or all of those costs pass to the tenant and NOI sits much closer to rent. Wikipedia describes the modified gross lease that sits between them, common in office buildings, where the tenant pays base rent plus increases in taxes and operating costs above a base year. When comparing two properties by NOI, check the lease type first. A $2,500 gross rent and a $2,500 net rent are not the same income.

Further reading: Gross Lease on Wikipedia.