This office lease clause should be used in a base year lease. This form states that when the building is not at least 95% occupied during all or a portion of any lease year the landlord shall make an appropriate adjustment in accordance with industry standards of the building operating costs. This amount shall be deemed to be the amount of building operating costs for the year.
Title: Understanding Wyoming's Gross Up Clause in a Base Year Lease Introduction: In the realm of commercial real estate leasing, understanding the nuances of a Base Year Lease is crucial. One vital component is the Wyoming Gross Up Clause, which governs the allocation of common area maintenance (CAM) costs among tenants. In this article, we will explore the different types of Wyoming Gross Up Clauses that should be utilized in a Base Year Lease. 1. Definition and Purpose of Wyoming's Gross Up Clause: The Wyoming Gross Up Clause is a provision within the lease agreement that outlines how CAM expenses are allocated among tenants in a multi-tenant building. Its purpose is to ensure fairness and equitable distribution of costs by accounting for variations in occupancy levels within the building. 2. Standard Wyoming Gross Up Clause: The standard Wyoming Gross Up Clause allows for the upward adjustment of CAM costs in the base year. It stipulates that if the occupancy level in the building during the base year is less than full occupancy, the landlord has the right to "gross up" the expenses to reflect the costs incurred at full occupancy. This clause benefits the landlord by recovering additional expenses resulting from empty spaces and directly affects the tenants' CAM reimbursement obligations. 3. Substantial Occupancy Wyoming Gross Up Clause: The substantial occupancy Wyoming Gross Up Clause is an alternative provision that takes into account an agreed-upon occupancy threshold. This clause varies from the standard clause by applying the gross up only when occupancy levels fall below the predetermined threshold. It offers tenants a safeguard against potential costs associated with long-term vacancies, incentivizes higher occupancy rates, and is commonly used in leases where there are anchor tenants. 4. Full Occupancy Wyoming Gross Up Clause: The full occupancy Wyoming Gross Up Clause is a less commonly used provision that allows the landlord to apply the gross up only when the building reaches full occupancy. In other words, if the building never attains full occupancy during the lease term, the gross up is not triggered. This clause may be favorable to tenants, as they are exempt from absorbing costs associated with vacancies in the building. 5. Advantages of Including a Wyoming Gross Up Clause: Including a Wyoming Gross Up Clause in a Base Year Lease offers numerous advantages for both landlords and tenants. Key benefits include: — Ensuring fairness in CAM expense allocation. — Encouraging desirable occupancy levels. — Protecting tenants from unforeseen expense spikes arising from vacancies. — Providing transparency by outlining the calculations and methodology used for the gross up. Conclusion: When drafting or reviewing a Base Year Lease in Wyoming, the inclusion of an appropriate Gross Up Clause is crucial. It helps establish a fair and balanced allocation of CAM expenses and safeguard both landlords and tenants from potential inequities. By comprehending the different types of Wyoming Gross Up Clauses available, all stakeholders can ensure a transparent and mutually beneficial lease agreement.
