Building Operating Expense “Base Year” Explained

A “Base Year” is a term whereby the Landlord agrees to cover all the operating expenses of a building up to an amount established by a “Base Year” (normally the first year of the lease), and the Tenant will be responsible for their pro-rata share of any increase in expense for subsequent years.

Here’s an illustration of Base Year:

A tenant leases a 5,000 square foot office suite in a multi-tenanted building that has a total size of 25,000 square feet.

Tenant’s proportionate share of the building’s operating expenses is 20% (5,000/25,000).

Tenant’s lease commences in May 2011. The Lease states the Base Year is 2010.

The 2011 actual operating expenses totaled $225,000 (the “Base Year”).

The estimate for the 2012 operating expense is $236,250.

The increase in operating expense increase over the tenant’s Base Year is $11,250.

Tenant’s proportionate share results in $2,250 ($11,250 x 20%). Typically this amount is paid monthly ($187.50/month) at the same time as the Base Rent and at the end of 2011 a reconciliation is performed and any overage is credited to the following year or conversely any increase is charged back to the Tenant.

18 thoughts on “Building Operating Expense “Base Year” Explained

  • November 29, 2011 at 6:39 pm
    Permalink

    I went over this website and I believe you have a lot of great information, saved to bookmarks (:.

  • January 5, 2012 at 10:41 pm
    Permalink

    Thank you very much for your interest, it is much appreciated. You may post these articles on your website if you credit me for writing the article and provide a link to my blog. Again, I really appreciate your interest.

  • January 27, 2012 at 5:16 am
    Permalink

    Utterly composed content material , thankyou for selective information .

  • February 16, 2012 at 8:09 am
    Permalink

    Hello! I am so thrilled I discovered your web site. I seriously located you by error, whilst I was browsing on Reddit for some other thing. Regardless, I’m here today and would just decide to say thank you for a amazing post along with a all-round appealing blog (I additionally really like the theme / design). I don’t have enough time to look through all of it at the moment but I have book marked it as well as put in your RSS feeds, so if I have time I’ll be returning to learn more. Please do keep up the great task.

  • February 18, 2012 at 5:45 pm
    Permalink

    A pity, but I debate with this unique post. I do really enjoy your particular weblog however and may keep on moving in return for news.

  • February 20, 2012 at 12:31 am
    Permalink

    That is the type of info that should be shared around the web. Shame on the search engines for now not positioning this higher up! Come on over and discuss with my web site. Thanks =)

  • February 21, 2012 at 9:27 pm
    Permalink

    Okay article. I located your blog plus needed to point out that We’ve really liked reading your blog post posts. However I’ll be registering to your supply we i do hope you post just as before before long.

  • March 21, 2012 at 3:06 am
    Permalink

    I was very pleased to find this web-site.I wanted to thank for your time of this wonderful read!! I definitely enjoy every little bit of it and I have you bookmarked to check out new stuff you blog post.

  • March 31, 2012 at 8:57 am
    Permalink

    I enjoy reading it. I fundamental to learn more on this subject.. Thanks for theme this astonishing post.. Anyway, I am gonna subscribe to your support and I desire you mail again soon.

  • April 2, 2012 at 6:02 am
    Permalink

    Many thanks for writing this. Quickquery, if you wouldn’t mind. Where did you get your web-site theme? I will be setting up a site and like your site.

  • April 8, 2012 at 8:36 pm
    Permalink

    Enjoyed reading this post, thanks for perking up a boring day. Added to bookmarks.

  • April 21, 2012 at 7:16 am
    Permalink

    Can I simply say what a reduction to find somebody who truly is aware of what theyre talking about on the internet. You positively know the best way to deliver a problem to mild and make it important. Extra people need to read this and understand this side of the story. I cant imagine youre not more widespread since you positively have the gift.

  • May 28, 2012 at 5:57 am
    Permalink

    I like the valuable info you provide in your articles. I’ll bookmark your weblog and check again here frequently. I am quite certain I will learn plenty of new stuff right here! Good luck for the next!

  • May 28, 2012 at 3:54 pm
    Permalink

    Hello.This post was really interesting, especially because I was looking for thoughts on this topic last Thursday.

  • May 28, 2012 at 4:12 pm
    Permalink

    Lovely blog! I am loving it!! Will come back again. I am taking your feeds also

  • September 22, 2014 at 4:57 pm
    Permalink

    I read a lot of interesting articles here.
    Probably you spend a lot of time writing, i know how to save you a lot of
    time, there is an online tool that creates unique, SEO friendly articles in seconds, just search in google – laranitas free content source

Comments are closed.

SEO Powered by Platinum SEO from Techblissonline
Skip to toolbar