Eric Greenberg Published in Commercial Leasing Law & Strategy

“In the Spotlight: Negotiation of Operating Expenses in an Office Lease”

Eric Greenberg’s article, “In the Spotlight: Negotiation of Operating Expenses in an Office Lease,” was published in the January 2008 issue of the Commerical Leasing Law & Stretegy. In his article, Eric notes that because so much of today’s retail space is leased in mixed-use buildings, particularly office buildings, “developers and retailers should familiarize themselves with leasing concepts inherent in office leases.” He remarks that this is important because, “the allocation of which party pays the costs of an office building’s operating expenses is one of the most negotiated provisions in an office lease.”

Eric’s article provides “a brief overview of commonly negotiated operating expenses” from both the landlord’s and the tenant’s point of view. Specifically, Eric discusses issues related to: a list of exclusions, capital expenditures, replacements, equipment, costs attributed to a specific tenant, artwork, charitable contributions, management costs, specialty items and market considerations. While the above is not an exhaustive list of operating expenses included in the negotiation by tenants and landlords, Eric also offers a list of five questions that should be considered when negotiating any operating expenses.