This office lease clause is used to respond to various changes that might occur within the tenant's office building or shopping center.
Washington Measurement Representations and Proportionate Share Adjustment of Tenants Proportionate Tax Share
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FAQ
Also known as tenant's pro rata share. The portion of a building occupied by the tenant expressed as a percentage. When a tenant is responsible for paying its proportionate share of the landlord's costs for the building, such as operating expenses and real estate taxes, the tenant pays this amount over a base year.
Lessee's Proportion means the proportion that the net lettable are of the Premises bears to the net lettable area of the Building, being the percentage in item 16 of the Reference Schedule (or any other corrected or recalculated percentage notified in writing by the Lessor to the Lessee from time to time).
How do landlords calculate the ?proportionate share?? Ordinarily, this is calculated based on the relative square footage occupied by each tenant. That makes sense for fixed costs such as taxes, insurance and common area utility costs.
Proportionate Share of Operating Expenses means a fraction equal to the total Gross Rentable Area of the Premises divided by the total Gross Rentable Area of the Building.
The 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.