Opex Stop Escalation Calculator

Expense stop structures protect tenants from early-year expense shocks and landlords from long-term stagnation.

Tenant SF

Building SF

Opex year 1

Expense stop

Annual opex growth %

Years

Total pass-through

$49,959

Pro-rata %

0.07%

Average annual pass-through

$9,992

How the math works

Pro-rata = tenant SF / building SF. Each year, tenant pays its share of expenses above the stop.

12,000 / 180,000 = 6.67% share. $1.8M × (1.04^4) = $2.1M year 5. Excess over $1.8M stop × 6.67% = tenant contribution. Totals $40k over 5 years at 4% growth.

How to Use

Enter tenant SF.
Enter building SF.
Enter opex year 1.
Enter expense stop.
Enter annual opex growth %.
Enter years.
Read tenant pass-through.

Frequently Asked Questions

What is an expense stop?

A fixed dollar amount of operating expenses that the landlord absorbs each year. Tenant pays its pro-rata share of expenses above the stop. Usually equals year 1 actual or budgeted expenses. Frozen for the lease term unless adjusted.

Stop vs base year?

Stop is a fixed dollar figure; base year is the actual year 1 expenses, adjusted for gross-up. Base year is more flexible (corrects for lease-up vacancy). Stops are cleaner on paper but punish tenants when year 1 expenses are unusually low due to temporary factors.

Common disputes?

Capital vs operating classification, controllable caps on specific line items, gross-up math when the building is partially vacant in year 1, and whether one-time items (insurance premium spike) are included. Spell out each in the lease to limit arguments at reconciliation.