This office lease clause states the conditions under which the landlord can and can not furnish any particular item(s) of work or service which would constitute an expense to portions of the Building during the comparative year.
The Arizona Clause for Grossing Up the Tenant Proportionate Share is an important provision within commercial lease agreements in the state of Arizona. This clause determines how the tenant's share of operating expenses will be calculated and adjusted in case of a "gross-up" scenario. In simple terms, it ensures that tenants are not unfairly burdened with increased operating expenses due to vacancies or unoccupied space within the property. When a property has vacant space, the Arizona Clause for Grossing Up the Tenant Proportionate Share allows the landlord to adjust the tenant's share of operating expenses to reflect a fully occupied property. This adjustment aims to distribute the costs proportionately among the occupied units, mimicking the financial impact if the property were fully leased. Typically, a gross-up provision will include certain criteria such as a specified vacancy rate or threshold, and sometimes factors like market conditions or historical vacancy rates may be considered to determine the appropriate adjustments. This ensures a fair distribution of operating expenses and prevents an unfair burden on tenants who may occupy a smaller portion of the property. Different types of Arizona Clauses for Grossing Up the Tenant Proportionate Share may include: 1. Fixed Gross-Up: This type of clause involves a predetermined adjustment method that remains constant throughout the lease term. The landlord may determine a set vacancy rate or use historical data to calculate the proportionate share based on a fixed formula. 2. Market Condition Gross-Up: This type of clause takes into account the prevailing market conditions, such as the average vacancy rate in the local area. It adjusts the tenant's proportionate share based on these external factors, ensuring that the tenant is not disproportionately burdened by vacancies in the property. 3. Historical Gross-Up: In this scenario, the tenant's proportionate share is adjusted based on historical data within the property or similar properties. The clause may specify using a certain period's average occupancy rate or vacancy rate to determine the adjustment. The specific type of Arizona Clause for Grossing Up the Tenant Proportionate Share included in a lease agreement will depend on various factors, including the landlord's preferences, the property's characteristics, and market conditions. It is crucial for both landlords and tenants to clearly understand the provisions of this clause in order to ensure fair and transparent distribution of operating expenses.
