Expense Gross-Up Gap Calculator

Even with gross-up language, LL may under-collect due to lease carve-outs. This calculator sizes the leakage.

Theoretical grossed-up

Actual collected

Carve-out exclusions

Gap (leakage)

$10,000

Leakage %

4.88%

Expected with carve-outs

$205,000

How the math works

Gap = expected (with carve-outs) − actual collected. Shows leakage from errors or disputes.

Annual CAM reconciliation reviews routinely find 2-5% leakage. On a $1M expense pool, that's $20-50k left on the table. Hire external auditor every 3 years to validate methodology.

How to Use

Enter theoretical grossed-up recovery.
Enter actual collected recovery.
Enter carve-out exclusions.
Read gap and leakage %.

Frequently Asked Questions

Common carve-outs?

Capital expenditures. Management fees above cap. Certain repairs. Legal fees. Each carve-out is a leakage point. Bigger portfolios = bigger absolute leakage.

Audit it?

Annual reconciliation review. Compare grossed-up theoretical to collected. Flag tenants with biggest gap. Ask: lease language or reconciliation error?

Plugging?

Renegotiate carve-outs at renewal. Update lease templates to reflect current-year exposures. Train accounting team on gross-up methodology. Small gaps compound.

When does a lender negotiate vs foreclose?

Lenders calculate their net recovery from foreclosure (asset value minus legal, time, and sale costs) and compare to any workout proposal. If your offer nets the lender more than foreclosure, and you present it with clear sources of capital, most lenders will engage. Bring a credible sponsor, documented sources, and a timeline — vague asks get declined. Build the relationship before distress, not after.