A tenant has a gross lease with an ''expense stop''of $2.75/SF. If the building has 200,000 square feet of leasable space, reimbursable operating expenses of $750,000, and the tenant rents 25,000 SF, then how much does the tenant owe the landlord in expense reimbursements (the total $ amount)?
A) $3.75/SF.
B) $25,000. : $750,000 / 200,000SF $\rightarrow$ Total OE/SF = $3.50. Less $2.50 stop $\rightarrow$ Tenant owes $1.00/SF * 25k SF.
C) $68,750.
D) $93,750.
E) Can't answer because it depends on the CPI adjustment in the lease.

Question

Quizplus · Accepted Answer

The tenant owes $25,000 in expense reimbursements. This is calculated by first determining the total operating expenses per square foot ($750,000 / 200,000 SF = $3.75/SF), then subtracting the expense stop ($3.75 - $2.75 = $1.00/SF). Finally, multiply the remaining amount by the tenant's square footage (25,000 SF * $1.00/SF = $25,000).

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