What is a Full Service Lease in Real Estate?

What is a Full Service Lease?

A full service lease, particularly common in commercial real estate such as office buildings, is a type of rental agreement where the landlord pays for all or most of the property's operating expenses. These expenses typically include utilities, janitorial services, maintenance, taxes, and insurance. The tenant pays a single, inclusive rent amount that covers both the lease itself and these operational costs. This type of lease simplifies budgeting for tenants as it provides a clear, predictable cost structure.

Full service leases are good for tenants seeking simplicity and predictability in their real estate expenses, but they typically come at a premium compared to other lease types where the tenant assumes more responsibility for the operating expenses.

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