Adam Bothun

In a base year lease, everything hinges on the base year. Your rent increases are measured against the operating expenses incurred in that single year, so the composition of the base year determines what you pay for the entire term. Base year exclusions are the costs you negotiate out of that baseline, and they are … Read more

When a commercial lease sets renewal rent at fair market rent, or when a landlord quotes you a rate for new space, that number comes from somewhere. Fair market rent is supposed to represent what a willing tenant would pay a willing landlord for comparable space in an open market. But landlords and tenants often … Read more

Many commercial leases raise your rent automatically each year, and one of the most common mechanisms is a CPI escalation clause. Tied to the Consumer Price Index, this clause adjusts your rent based on measured inflation. It sounds objective and fair, but the details determine whether it treats you fairly in practice. CPI escalation shifts … Read more

Not every commercial lease charges tenants for operating expense increases the same way. In a base year lease, you pay the increases above your base year. In a net lease, you pay your full share from day one. An expense stop is a hybrid: a fixed dollar threshold that works like a deductible on your … Read more

Operating expenses in a commercial lease rarely stay flat. They creep upward year after year, and tenants with no protection watch their total occupancy cost drift far above the rent they originally negotiated. Caps on controllable expenses are the primary defense against that drift. A controllable expense cap limits how much certain operating expenses can … Read more

Every commercial building eventually needs a new roof, a new HVAC system, or a major elevator overhaul. These are capital expenses, big-ticket items with long useful lives, and the question of who pays for them is one of the most consequential negotiations in any commercial lease. Many leases pass some or all of these costs … Read more

Common area maintenance charges, usually called CAM, are one of the largest variable costs in a commercial lease. Inside that CAM bill sits a line item that puzzles many tenants: the management fee. Your landlord charges you for managing the building, and that fee flows straight into the operating expenses you share. Management fees are … Read more

In a commercial lease, your share of operating expenses depends on how full the building is. That sounds strange at first, but the logic is simple. Many building costs stay roughly the same whether the property is half empty or nearly full, and a gross-up clause exists to account for that reality. Without this clause, … Read more

In a commercial lease, your rent is only part of what you pay. Operating expenses, the costs of running the building, are passed through to tenants in most lease structures, and they can add a substantial amount to your annual occupancy cost. What many tenants do not realize is that not every cost the landlord … Read more

A right of first offer, known as a ROFO, gives you the first chance to lease space before the landlord offers it to anyone else. Unlike a right of first refusal, which lets you match someone else’s deal, a ROFO puts you at the front of the line to negotiate your own. For tenants planning … Read more