Gross Up Clause Impact Calculator

Gross-ups adjust CAM for partial occupancy.

Variable OpEx actual

Actual occupancy %

Target gross-up occupancy %

Grossed-up amount

$1,013,333

Uplift over actual

$213,333

Gross-up ratio

1.267

How the math works

Gross-up ratio = target / actual. Grossed-up = variable × ratio.

$800k × (95/75) = $1.013M grossed-up. Uplift $213k — properly billable to tenants under standard leases.

How to Use

Enter total variable OpEx.
Enter actual occupancy %.
Enter target gross-up %.
Read grossed-up amount.

Frequently Asked Questions

Why gross-up?

Some expenses (janitorial, utilities, elevator) vary with occupancy. If building 70% occupied, expenses ~70% of full. Landlord bills at 100% would overcharge. Gross-up calculates 'as if' expenses at target occupancy (usually 95%) and bills pro-rata from there.

Mechanics?

Variable OpEx × (target occupancy / actual occupancy) = grossed-up amount. Bills to tenants based on grossed-up. Landlord absorbs vacancy-related shortfall. Fair practice required by most modern institutional leases.

Tenant protection?

Gross-up protects tenants against underusage. Without gross-up, tenants pay disproportionate share during lease-up. Modern standard: gross-up in all classes. Audit rights confirm calculation. Major issue in secondary markets where smaller landlords may skip.

How often should I rerun this?

Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.