This office lease clause is used to respond to various changes that might occur within the tenant's office building or shopping center.
Virginia Measurement Representations and Proportionate Share Adjustment of Tenants Proportionate Tax Share
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FAQ
Hear this out loud PauseThe pro-rata share is the percentage of expenses shared by the tenant for the shopping center or office building. In most leases, the pro-rata share is calculated as a fraction of the tenant's demised square footage divided by the total square footage of the shopping center or the building.
Hear this out loud PauseIn general, the tenant's proportionate share is determined by taking the building's rentable square footage and dividing it by the tenant's rentable square footage. Local industry customs usually provide the landlord with the guiding principles for: Measuring the building.
In commercial real estate, many leases include a provision called an expense stop, ensuring that the landlord pays for operating expenses up to a certain point ? but not past that point.
Hear this out loud PauseAn expense stop is a contractual provision that protects the property owner from rising expenses over the lease term. In such a case, the property owner typically agrees to pay all of the operating expenses in the first year of the lease, which is known as the ?base year amount? and sets the expense stop.