This office lease clause is used to respond to various changes that might occur within the tenant's office building or shopping center.
Arkansas Measurement Representations and Proportionate Share Adjustment of Tenants Proportionate Tax Share
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FAQ
Also known as tenant's pro rata share. The portion of a building occupied by the tenant expressed as a percentage. When a tenant is responsible for paying its proportionate share of the landlord's costs for the building, such as operating expenses and real estate taxes, the tenant pays this amount over a base year.
Arkansas Code Annotated 26-35-901 is the primary state code dealing with real or personal property taxes erroneously assessed and paid.
In this Standard Clause, the tenant pays its proportionate share of the increases in real estate taxes and operating expenses above those expenses incurred in a base year.
The pro-rata share is the percentage of expenses shared by the tenant for the shopping center or office building. In most leases, the pro-rata share is calculated as a fraction of the tenant's demised square footage divided by the total square footage of the shopping center or the building.
Proportionate Share of Operating Expenses means a fraction equal to the total Gross Rentable Area of the Premises divided by the total Gross Rentable Area of the Building.
In general, the tenant's proportionate share is determined by taking the building's rentable square footage and dividing it by the tenant's rentable square footage. Local industry customs usually provide the landlord with the guiding principles for: Measuring the building.
Proportionate Share of Operating Expenses means a fraction equal to the total Gross Rentable Area of the Premises divided by the total Gross Rentable Area of the Building.
How do landlords calculate the ?proportionate share?? Ordinarily, this is calculated based on the relative square footage occupied by each tenant. That makes sense for fixed costs such as taxes, insurance and common area utility costs.
