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What is an expense gross up?

Gross-up is additional money an employer pays an employee to offset any additional income taxes (Social Security, Medicare, etc.) an employee would owe the IRS when that employee receives a company-provided cash benefit, such as relocation expenses. Gross-up is optional and is usually used for one-time payments.

What does gross up mean in commercial real estate?

Simply stated, the concept of gross up provision stipulates that if a building has docHub vacancy, the landlord can estimate what the variable operating expense would have been had the building been fully occupied, and charge the tenants their pro-rata share of that cost.

Do expense stops limit the expenses paid by the landlord or the tenant?

An expense stop is the maximum amount a landlord will spend on operating expenses. Any amount above the expensive stop becomes the tenants responsibility.

Can you have a base year with a NNN lease?

A Base Year is a clause found in many Full-Service and Gross Leases. It is not found in NNN leases. The Base Year is a year that is tied to the actual amount of expenses for property taxes, insurance and operating expenses (sometimes called CAM) to run the property in a specified year.

What does an expense stop do in a lease?

An expense stop is a contractual provision that protects the property owner from rising expenses over the lease term. In such a case, the property owner typically agrees to pay all of the operating expenses in the first year of the lease, this is known as the base year amount and it sets the expense stop.

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