The firm was able to lower its current remaining rental obligation substantially and obtain a new base-year expense stop.
It also benefitted from a new base-year operating expense stop, and was able to obtain additional expansion rights that were desperately needed after it had exhausted all its rights from the original lease.
This math can be daunting, especially if a building has a significant number of leases, or if energy and other operating expenses were combined into a single base year or expense stop.
Returning to our example, let's assume that Building A's leases have been in place for a while, and that operating expenses per square foot both before and after the upgrade are greater than the expense stops in most of the leases.
The energy savings captured by the owner and tenant depend on where the actual operating expenses are in relation to the expense stop
in the lease.
Lines 65-69 represent the projected expenses for which the tenant is responsible, over and above the amount provided by the owner as an expense stop
And if you know that the money you fork out for the carpet is for the good cause of building a shelter and hospital for animals, the expense stops
seeming to be a mere indulgence.
Henrik is reportedly paid pounds 30,000 per week, so it will take him less than a month to earn enough to pay for the car - but that's not where the expense stops
2005 NCF declined due to a decrease in expense reimbursements as the result of two large leases renewing and adjusting their respective expense stops
Operating expense stops
: Do you have operating expense stops
in your leases, and if so, what is your base year?
tenant improvements, stepped rents, credit desirability, level of finish work to be done, and target markets for types of tenants desired as well as actual rental rates and expense stops
However, it would also include specific property-level assumptions such as leasing of existing vacant space, miscellaneous revenue, operating and tax expense stops
for the upcoming year, and expected tenant improvement costs.