Protecting Your Business From Supplemental Tax Bills

As a tenant occupying a commercial building you are paying your proportionate share of that building's common area maintenance, property taxes, and property insurance. The way these property expenses are billed to your business varies depending on the type of lease structure you have negotiated. NNN lease structures pass all cost through to their tenants directly, Gross leases have a base year (cumulative actual expenses needed for the building in that particular calendar year) for calculating a tenant's exposure to building maintenance costs and then any expenses over the base year expense value are billed back to each tenant based on their pro-rata share. In Q4 2018, commercial real estate values are at an all time high. Property owners are selling their real estate for a profit but as a tenant, this means you are going to receive a higher assessed property tax value after the sale. In short you're occupancy costs are going to increase due to the sale of the property. There are way to protect yourself and your business against these costs. If you're interested in finding out how, contact us. We can help. 858.356.2990