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Expense Recovery Calculator
Commercial leases pass operating expenses to tenants through expense recovery. Base year leases charge the tenant only for increases over a reference year; stop leases use a fixed threshold. This calculator runs pro-rata share, base year stop math, and adds the landlord's admin fee.
Tenant expense reimbursement
$38,180
Pro-rata tenant share of expenses
$36,000
Expenses over base year stop
$33,200
Admin fee $
$4,980
Reimbursement / SF
$4.77
Tenant pro-rata share
20.00%
How the math works
Expense recovery passes recoverable operating costs to tenants on a pro-rata SF basis. Base year lease: tenant pays over base year expenses. Stop lease: tenant pays over a fixed stop. NNN lease: tenant pays 100%, no base. Admin fees (10-15%) are added to cover property accounting cost.
Audit rights let tenants verify recoverable costs. Always carve out capex, finance charges, and owner partnership expenses from recoverables — these are the biggest dispute categories.
How to Use
- Enter total recoverable expenses for the period.
- Enter tenant SF and building total SF.
- Enter base year stop or fixed expense stop amount.
- Enter admin fee percent.
- Read tenant reimbursement, over-base amount, and per-SF cost.
Frequently Asked Questions
Base year vs stop?
Base year = first year's expenses establish the tenant's 'expense stop' dynamically; subsequent years increase over that base. Fixed stop = a pre-set dollar amount, doesn't change year to year.
What's recoverable?
Typically property tax, insurance, janitorial, utilities, landscaping, security, elevator maintenance, CAM. NOT recoverable: capex, debt service, property management salaries, owner legal/accounting, marketing.
Admin fee purpose?
Covers the landlord's accounting, invoicing, and audit cost — 10-15% is typical on top of recoverable expenses. Some markets cap at 10%; others allow 15-20%.
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Expense Reimbursement Calculator
Commercial lease expense reimbursement — pro-rata share, admin fee, expense stop, and gross-up calculation.