These days, it has become very common for retail landlords to charge retail tenants “pass through” costs such as operating expenses, insurance costs, taxes, and marketing costs on a fixed cost basis with mandatory fixed increases as opposed to charging tenants a proportionate share of the actual amounts for these charges.
Switching to Fixed Operating Costs
By carefully analyzing those items that are included in Fixed Costs, those items that are excluded from Fixed Costs, and the manner by which Fixed Costs will be escalated each year, a tenant can effectively convert from the payment of a proportionate share of additional rent expenses to the payment of a Fixed Cost expense. Here's how.
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