Office Rent Grossing Up Calculator

Office leases require gross-up of expenses to fully occupied basis for fair tenant share allocation.

Actual variable expenses

Fixed expenses

Current occupancy %

Gross-up floor %

Tenant share %

Tenant share (grossed up)

$35,333

Total expenses (grossed up)

$353,333

Additional recovery vs actual

$5,333

How the math works

Variable grossed up = actual / occupancy × 95%. Total = grossed variable + fixed.

$200k / 75% × 95% = $253k variable + $100k fixed = $353k. Tenant 10% = $35.3k.

How to Use

Enter actual variable expenses.
Enter fixed expenses.
Enter current occupancy %.
Enter gross-up floor %.
Enter tenant share %.
Read tenant share (grossed up).

Frequently Asked Questions

Why gross up?

Office expenses contain fixed (taxes, insurance, capital reserve) and variable (utilities, cleaning, security) components. At low occupancy, fixed costs spread over fewer occupants — unfair burden. Gross-up calculates what variable expenses WOULD be at 95% occupancy, charges tenant share of grossed-up amount. Standard 95% occupancy floor in most modern office leases. Triple-net (NNN) and gross with expense escalations both use grossed-up base. Important during transition periods + new building lease-up.

How does this asset class compare to traditional CRE?

Specialty assets (self-storage, RV parks, MHP, marinas, cold storage, data centers, parking, car wash, QSR/c-store, billboards, cell towers) typically offer higher cap rates than office/retail but with more operational complexity. They reward specialized operators with deep market knowledge. Lender pool is narrower, capital costs sometimes 50–150 bps higher, but downside resilience often better.

Capex and operational considerations?

Specialty assets often have heavier operational burden than passive triple-net retail. Self-storage, RV, MHP: tenant turn, security, basic upkeep. Marinas, parking, car wash: equipment-heavy with replacement reserves. Cold storage, data center: utilities are major cost. Billboards, cell towers: minimal opex, near-passive. Match management capacity to asset operational intensity.

Exit strategy?

Specialty asset cap rates have compressed significantly over last cycle but volatility is real. Buyers: REITs, private equity rollups, regional operators, 1031 buyers. Strong NOI history, environmental clarity (especially for car wash, gas station), and lease structure (for billboards, cell towers) drive valuation. Plan exit 24+ months in advance for best execution.