What characterizes a straight lease?

A straight lease is characterized by level lease payments, which means that the tenant pays a consistent, fixed amount of rent for the duration of the lease term. This structure offers simplicity and predictability for both the landlord and tenant, making it easy to budget and plan finances without the variable fluctuations that may come with other leasing structures.

In contrast, other leasing arrangements may include variable rent payments that fluctuate over time or are tied to economic indices, meaning the rent adjusts based on specific market conditions or economic indicators. Additionally, some leases are based on a percentage of sales, particularly in retail environments, where the rent varies according to the tenant's sales performance. The stability of a straight lease makes it a favorable option for many landlords and tenants who prefer to avoid the uncertainties associated with these other types of leasing agreements.