Weekly Commercial Real Estate Terms

Base Year Expense Stop When a tenant is responsible for paying a portion of the operating expenses as part of a lease agreement. Typically, the “base year” is the tenant’s first year of occupancy. The expense amount for that first year becomes the owner’s “base year expense stop”. That is the maximum amount of expenses the owner will pay over the life of the lease per year. Any expenses in future years, which exceed the stop, are “passed through” to the tenant in addition to the rent. Passthroughs are also formally known as Recovered or Recaptured Expenses.]]>