Real estate and business principal, Jeremy Root, recently published an article on CCIM Institute’s website. Entitled “Gross-Up Provisions - Tenants benefit from having fixed variable costs,” Mr. Root explains how the gross-up provision works in commercial real estate leases.
Gross-up provisions minimize financial exposure for commercial real estate landlords, allowing them to pass on operating expenses to tenants consistent with a 100% occupancy model. Subsequently, tenants in commercial properties will pay relatively consistent operating expenses that aren’t subject to extreme fluctuations that would otherwise result from varying occupancy rates.
To read the complete article, click on the PDF link below. For more information on how to structure gross-up provisions in commercial real estate leases, contact Jeremy Root at email@example.com.