Is the lease a triple‑net (NNN) lease, and how will that affect the property's operating expense profile?

Lease structure

The press release does not state the specific lease terms for Perspire Sauna Studio, so we cannot confirm that the 1,700‑sq‑ft retail space at The Hartford is a triple‑net (NNN) lease. However, many street‑level retail leases in mixed‑use, transit‑oriented assets—especially those anchored by a strong developer like Comstock—are structured as NNN or modified‑NNN to pass the bulk of property‑level operating costs to the tenant.

Impact on operating‑expense profile

If the lease is indeed NNN, the tenant would be responsible for the majority of property‑level expenses (taxes, insurance, and common‑area maintenance). For the landlord, this means a lower and more predictable expense base, which boosts the net operating income (NOI) and the property’s cash‑flow coverage ratio. A reduced expense burden also improves the property’s risk‑adjusted return and can lead to a higher funds‑from‑operations (FFO) margin for Comstock’s REIT portfolio.

Trading implications

A NNN lease would be viewed positively by the market: the stable, landlord‑free expense structure tightens the upside on earnings and reduces downside volatility—especially in a region where retail demand can be cyclical. Assuming the lease is NNN, analysts may upgrade the property’s projected NOI and apply a higher capitalization rate, supporting a modest price‑target uplift for CHCI. Conversely, if the lease is a gross or modified‑gross arrangement, the operating‑expense risk remains with the landlord, which could temper the upside. Until the lease type is confirmed, the market will likely price in a modest “lease‑type uncertainty” premium, but the overall sentiment should stay bullish given the strong tenant concept and the strategic Arlington location.