“Triple net.” Two words that make a Hawaii commercial property sound effortless — the tenant pays everything, the owner collects a cheque. Sometimes that is exactly true. Sometimes it is not remotely true. And the difference is not decided by the acronym printed on the offering memorandum. It is decided by the lease.
I am Jason Wong, President and Principal Broker of Island Dragonfly LLC, working across Oʻahu, Maui, the Big Island, Kauaʻi, Molokaʻi and Lānaʻi. In this segment I walk through why “NNN” is shorthand, not due diligence — and what I actually read before I will underwrite a net-leased asset in Hawaii.
WHAT THIS VIDEO COVERS
- What a net lease typically shifts to the tenant — property taxes, insurance, certain operating and maintenance obligations — and why “typically” is doing enormous work in that sentence
- The ten questions that decide the real economics: roof replacement, structural components, parking lot resurfacing, capital improvements, insurance deductibles, compliance with newly adopted law, common area management, utilities serving multiple tenants, casualty, and environmental obligations
- Who is responsible, how the cost is allocated, whether there is a cap, an exclusion, or an amortization formula
- Why a property marketed as triple net can still leave meaningful expense with the landlord — and why a well-drafted lease can produce very strong expense recovery
- The Hawaii-specific layer: leasing real property is taxable business activity under Hawaii’s general excise tax system, and how rent, GET and expense recoveries are invoiced and reported belongs in front of your CPA
- Why this matters most to sellers: unrecovered operating expense reduces NOI, and when NOI changes, value can change
- The expense recovery matrix I build before taking a net-leased property to market
FOR OVERSEAS AND MAINLAND INVESTORS
If you are underwriting Hawaii income property from Hong Kong, Taipei, Tokyo, Seoul, Singapore or the U.S. mainland, this is the layer that does not translate. “NNN” does not mean the same thing in every market, and Hawaii’s general excise tax structure has no clean equivalent in most home jurisdictions. I have closed for owners who never set foot on the island. It works — but only when someone reads the documents.
WORK WITH ME
Own a net-leased building in Hawaii and thinking about selling? I will build you an expense recovery matrix before we discuss price. Buying? I will read the lease and every amendment before I let you sign anything.
Jason Wong (PB), MBA — President & Principal Broker
Island Dragonfly LLC | RB-22819 / RB-24348
🔗 https://jasonwong.us
🔗 https://islanddragonfly.com
Serving Oʻahu, Maui, Big Island, Kauaʻi, Molokaʻi and Lānaʻi. Consultations by appointment, in person or virtual.
This video is general information for real estate brokerage purposes and is not legal, tax or accounting advice. Commercial leases are contracts; the lease language, Hawaii law and your specific facts all matter. Have a qualified Hawaii attorney and CPA review your particular situation. Island Dragonfly LLC is a licensed Hawaii real estate broker and abides by equal housing opportunity laws.
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