Allocating Operating Expenses in Commercial Real Estate Leases: Negotiating Strategies for Landlords and Tenants
Structuring Pass-Throughs, Exclusions, Gross-Up, Expense Cap, and Other Provisions in Net Leases and Structuring Gross Leases
A live 90-minute premium CLE video webinar with interactive Q&A
This CLE webinar will discuss net and gross real estate lease structures (and those in between) and the allocation of operating expenses for different types of lease agreements. The program will cover negotiation from landlords' and tenants' perspectives on defining operating expenses, pass-throughs and exclusions, and other lease provisions impacting costs such as gross-up and expense cap provisions.
Outline
- A brief overview of different types of lease structures
- Standard operating expense inclusions and exclusions
- Gross-up provisions
- Expense cap provisions
- Tenant audit rights of landlord operating costs
Benefits
The panel will review these and other key issues:
- Structuring gross-up provisions to protect both landlord and tenant
- Considerations for drafting a cap on operating costs
- Reasonable audit rights for operating expenses
Faculty

Hannah Dowd McPhelin
Partner
Troutman Pepper
Ms. McPhelin concentrates her practice in real estate matters and other business transactions, including the... | Read More
Ms. McPhelin concentrates her practice in real estate matters and other business transactions, including the acquisition, sale and financing of commercial real estate properties and leasing of office, retail, warehouse and industrial space, representing both landlords and tenants. She is a LEED® (Leadership in Energy and Environmental Design) Accredited Professional and a member of the firm’s Sustainability, CleanTech and Climate Change Team.
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Julia E. Tomec
Partner
Troutman Pepper
Ms. Tomec concentrates her practice in commercial real estate matters and other corporate business transactions,... | Read More
Ms. Tomec concentrates her practice in commercial real estate matters and other corporate business transactions, including the acquisition, sale, development and financing of industrial, office and retail properties. She represents both landlords and tenants in the negotiation of retail, office and industrial leases. Ms. Tomec also has experience representing lenders in credit tenant lease financings, as well as JV partners in connection with the acquisition, disposition, and programmatic developments of retail, office and industrial projects.
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