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.
Chicago, Illinois is a bustling city located in the state of Illinois, United States. It is the third most populous city in the country and serves as a major hub for business, culture, and tourism. Chicago is known for its stunning architecture, vibrant arts scene, world-class museums, and renowned cuisine. One specific aspect of the renting and leasing process in Chicago, Illinois is the inclusion of a "Chicago Illinois Clause for Grossing Up the Tenant Proportionate Share" in commercial lease agreements. This clause addresses how the tenant's proportionate share of expenses, such as common area maintenance (CAM) charges, real estate taxes, insurance, and utilities, is calculated and adjusted. The Tenant Proportionate Share refers to the portion of these expenses that each tenant is obligated to pay, based on their leased square footage. Grossing up the Tenant Proportionate Share is a practice that ensures fairness among tenants by taking into account fluctuations in occupancy rates and varying levels of occupancy within a property. Types of Chicago Illinois Clauses for Grossing Up the Tenant Proportionate Share: 1. Fixed Percentage Gross-Up: This type of clause outlines a predetermined fixed percentage by which the Tenant Proportionate Share will be increased annually. For example, if the occupancy rate of the property is 80% but the tenant's occupancy is only 70%, the Tenant Proportionate Share will be grossed up to reflect the property's full occupancy. 2. Variable Gross-Up: In this type of clause, the grossing up is calculated based on the actual occupancy rate of the property. It ensures that tenants are paying their proportionate share based on the current occupancy level rather than a fixed percentage. 3. Stair-Step Gross-Up: This clause includes a gradual increase in the Tenant Proportionate Share over a specific period, such as every three or five years. This allows tenants to adjust their budgets accordingly and provides stability in lease expenses. 4. CPI-Based Gross-Up: This type of clause uses the Consumer Price Index (CPI) to adjust the Tenant Proportionate Share annually. It takes into account the inflation rate to ensure fair allocation of expenses. The Chicago Illinois Clause for Grossing Up the Tenant Proportionate Share plays an essential role in managing the financial obligations of both landlords and tenants in commercial leases. It promotes transparency, fairness, and stability in the expenses incurred by tenants, contributing to the overall success and sustainability of businesses in Chicago, Illinois.
