Calculations
This is the pro-rata share for a tenant that has 2,000 SF in a 10,000 SF building.
Tenant Space / Total Space
2,000 / 10,000
20%
What does "NNN" stand for in "NNN Lease?"
Net, Net, Net (triple net)
What day do the TOES reports need to be sent to accountants by?
January 29th
What is the difference between a controllable and noncontrollable expense?
Noncontrollable expenses cannot be changed via RFP, negotiation, cancelling elective services, etc. Controllable expenses can be influenced.
What is the amount due for a tenant with a pro rata share of 8.5% if current year expenses are $2,670,000?
Current Year Expenses * Pro Rata Share
$267,000 * 0.085 = $226,950
What is a Base Year?
Year specified in the lease that ties a tenant's expense stop to a known year's operating expenses. Tenant is required to pay OPX amount over the base year amount.
How many folders need to be in the OPX folder for each year?
Six
Give three examples of a noncontrollable expense
A 150,000 SF building is 75% occupied. Janitorial expenses for the year were $135,000. What is the total janitorial cost to be included in the tenant's expense pool if the lease allows for a 100% gross up>
Gross up cost = Actual Expenses/Current Occupancy*Gross Up Allowed
$135,000 / 0.75 = $180,000
$180,000 * 100% = $180,000
How often should you update the Pulse OPX form if your reconciliation is delayed in any way?
At least weekly
When can you amortize capital back to tenants as an expense?
When allowed in the lease. Common examples are when you are replacing existing structures (not upgrades) to lower costs of OPX.
This lease year starts in 2005 and the expenses are $100,000. The tenant has a 5% cumulative and compounding CAP. What is the CAP amount in 2007?
100,000 * 1.05 * 1.05 = 110,250
What is an expense stop, and what type of leases are they commonly used in?
The max amount of OPX that a LL will pay. Anything above this amount is paid by the TT. Seen in full service gross leases.
Who completes the Pulse OPX form?
Managers and above
Why do we gross up management fees?
To maximize recoveries and profits for the LL. Most mgmt fees are calculated based on income - less occupancy = less income. Therefore, mgmt fees are impacted by occupancy, unless they're flat fees.