CO-1, Understanding Operating Costs
September 16 @ 8:45 am - 10:15 am
A tenant’s base rent obligations are clearly outlined in the lease agreement, but what makes up those additional reimbursable costs referred to as operating expenses? This basic class will provide you with an understanding of the types of expenses, services, obligations, and events defined as an Operating Expense and will provide insight as to how these added expenses should be viewed given two key factors: different types of locations and different types of lease agreements.
This course is an introduction to a variety of concepts such as broad or limited definition of Operating Expenses and how either may help or hurt the tenant as well as the difference between what is commonly known as “CAM” (common area maintenance) expenses versus “Operating Expenses”; a sample line item breakdown of expenses; the type of location (a/k/a in the industry as “venue” type, such as urban office, office campus, industrial, mixed-use and retail) and the type of lease agreement (net, gross or modified gross) and how these two key factors impact tenant expenses; grossing up and why this language is a must for base year types of lease; the impact of capital amortization and accruals and how to identify red flags when reviewing annual reconciliation invoices.