Commercial Gross Leases
Commercial gross leases bundle operating expenses into the base rent, often with expense stops or base year provisions that shift rising costs to tenants above a set threshold.
Key Structure Elements
- Base rent includes estimated operating expenses
- 3-10 year lease terms typical
- Annual escalations (fixed %, CPI, or market)
- Expense stop or base year provision
- Tenant improvement allowances
- Renewal options and permitted use clauses
Expense Stops
- Sets maximum landlord expense obligation
- Tenant pays excess as additional rent
- Base year: First-year expenses are the baseline
- Protects landlords from unlimited expense exposure
Included Expenses
Property taxes, insurance, CAM, common area utilities, management fees (3-6%), and repairs. Capital expenditures and tenant-specific costs are usually excluded.
Related Terms
- Contract — Commercial lease agreements
- Estate for Years — Leasehold interests
- Equity — Property investment returns
Barnes Walker Commercial Leasing
Barnes Walker's attorneys structure gross leases with appropriate expense stops for Florida commercial properties. Request a legal inquiry for assistance.
Florida Law Reference
Fla. Stat. Ch. 83, Part II
The Florida Residential Landlord and Tenant Act governs lease agreements, security deposits, maintenance obligations, and the eviction process.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC