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.
The Orange, California Gross up Clause in a Base Year Lease is an essential provision that ensures fair allocation of operating expenses among tenants in a commercial or retail property. This clause addresses the need to adjust for changes in occupancy levels and accounts for fluctuations in expenses, benefiting both tenants and landlords. By incorporating the Gross up Clause, tenants are protected from disproportionate cost burdens, while landlords maintain a steady cash flow. There are three primary types of Orange, California Gross up Clauses that can be utilized in a Base Year Lease: 1. Full Building Gross up Clause: This type of clause enables the landlord to adjust operating expenses based on the actual occupancy levels in the entire building. It considers the total square footage leased versus the total leasable square footage, ensuring that expenses are divided fairly among tenants. For example, if a building has an occupancy rate of 75%, the operating expenses would be grossed up to reflect the building at full capacity. 2. Floor Gross up Clause: In larger commercial properties with multiple floors, a Floor Gross up Clause is suitable. This provision bases the grossing up calculation on the total square footage of each floor individually. It considers only the occupied floors, ensuring that expenses are proportionately shared among tenants on that specific floor. For instance, if there are three floors, but only two have tenants, the operating expenses would be grossed up based on the occupied square footage. 3. Tenant Gross up Clause: This type of clause is beneficial for landlords when there is an uneven distribution of tenants across different areas of a property. It allows the landlord to adjust operating expenses based on the actual occupancy level of each tenant. For example, if one tenant occupies 50% of the leasable space, their portion of the operating expenses will be grossed up considering only their occupied area. In Orange, California, incorporating a Gross up Clause in a Base Year Lease is crucial for maintaining fairness and transparency in cost allocation. By considering the specific circumstances of a property, whether it's a full building, multiple floors, or an uneven distribution of tenants, landlords can ensure equitable sharing of operating expenses.The Orange, California Gross up Clause in a Base Year Lease is an essential provision that ensures fair allocation of operating expenses among tenants in a commercial or retail property. This clause addresses the need to adjust for changes in occupancy levels and accounts for fluctuations in expenses, benefiting both tenants and landlords. By incorporating the Gross up Clause, tenants are protected from disproportionate cost burdens, while landlords maintain a steady cash flow. There are three primary types of Orange, California Gross up Clauses that can be utilized in a Base Year Lease: 1. Full Building Gross up Clause: This type of clause enables the landlord to adjust operating expenses based on the actual occupancy levels in the entire building. It considers the total square footage leased versus the total leasable square footage, ensuring that expenses are divided fairly among tenants. For example, if a building has an occupancy rate of 75%, the operating expenses would be grossed up to reflect the building at full capacity. 2. Floor Gross up Clause: In larger commercial properties with multiple floors, a Floor Gross up Clause is suitable. This provision bases the grossing up calculation on the total square footage of each floor individually. It considers only the occupied floors, ensuring that expenses are proportionately shared among tenants on that specific floor. For instance, if there are three floors, but only two have tenants, the operating expenses would be grossed up based on the occupied square footage. 3. Tenant Gross up Clause: This type of clause is beneficial for landlords when there is an uneven distribution of tenants across different areas of a property. It allows the landlord to adjust operating expenses based on the actual occupancy level of each tenant. For example, if one tenant occupies 50% of the leasable space, their portion of the operating expenses will be grossed up considering only their occupied area. In Orange, California, incorporating a Gross up Clause in a Base Year Lease is crucial for maintaining fairness and transparency in cost allocation. By considering the specific circumstances of a property, whether it's a full building, multiple floors, or an uneven distribution of tenants, landlords can ensure equitable sharing of operating expenses.
