This office lease clause should be used in a base year lease. This form states that when the building is not at least 95% occupied during all or a portion of any lease year the landlord shall make an appropriate adjustment in accordance with industry standards of the building operating costs. This amount shall be deemed to be the amount of building operating costs for the year.
Keywords: Kentucky gross up clause, base year lease, types In commercial real estate leasing, a Kentucky gross up clause refers to a provision used in a base year lease to address the cost fluctuations of operating expenses throughout the lease term. The purpose of this clause is to adjust the tenant's rent payment by "grossing up" the expenses to reflect the expenses in a specific comparison year, usually the base year. One type of Kentucky gross up clause commonly used in base year leases is the Expense Gross Up Clause. This clause allows the landlord to estimate and adjust the tenant's rent based on a predetermined formula. The formula typically takes into account the percentage variation in operating expenses between the base year and the comparison year. This ensures that the tenant is not penalized for increases in operating expenses that are beyond their control. Another type of Kentucky gross up clause is the CPI (Consumer Price Index) Gross Up Clause. This clause links the adjustment of the tenant's rent to the fluctuations in the Consumer Price Index. By using this clause, the tenant's rent is adjusted annually based on changes in the CPI, which provides a measure of inflation. The intent behind this type of gross up clause is to maintain the tenant's purchasing power by reflecting the increased costs of goods and services. A third type of Kentucky gross up clause used in base year leases is the Operating Expense Escalation Gross Up Clause. This clause allows the landlord to adjust the tenant's rent payment based on the actual operating expenses incurred during each year of the lease term. The tenant's rent is then adjusted to reflect the proportional increase or decrease in operating expenses relative to the base year. It's important to note that the specific terms and conditions of the Kentucky gross up clause may vary from lease to lease, depending on the negotiation between the landlord and tenant. It is crucial for both parties to carefully review and understand the language of this clause before signing the lease agreement, as it can have significant financial implications for both the tenant and landlord throughout the lease term.
Keywords: Kentucky gross up clause, base year lease, types In commercial real estate leasing, a Kentucky gross up clause refers to a provision used in a base year lease to address the cost fluctuations of operating expenses throughout the lease term. The purpose of this clause is to adjust the tenant's rent payment by "grossing up" the expenses to reflect the expenses in a specific comparison year, usually the base year. One type of Kentucky gross up clause commonly used in base year leases is the Expense Gross Up Clause. This clause allows the landlord to estimate and adjust the tenant's rent based on a predetermined formula. The formula typically takes into account the percentage variation in operating expenses between the base year and the comparison year. This ensures that the tenant is not penalized for increases in operating expenses that are beyond their control. Another type of Kentucky gross up clause is the CPI (Consumer Price Index) Gross Up Clause. This clause links the adjustment of the tenant's rent to the fluctuations in the Consumer Price Index. By using this clause, the tenant's rent is adjusted annually based on changes in the CPI, which provides a measure of inflation. The intent behind this type of gross up clause is to maintain the tenant's purchasing power by reflecting the increased costs of goods and services. A third type of Kentucky gross up clause used in base year leases is the Operating Expense Escalation Gross Up Clause. This clause allows the landlord to adjust the tenant's rent payment based on the actual operating expenses incurred during each year of the lease term. The tenant's rent is then adjusted to reflect the proportional increase or decrease in operating expenses relative to the base year. It's important to note that the specific terms and conditions of the Kentucky gross up clause may vary from lease to lease, depending on the negotiation between the landlord and tenant. It is crucial for both parties to carefully review and understand the language of this clause before signing the lease agreement, as it can have significant financial implications for both the tenant and landlord throughout the lease term.
