Leasing 101 - Part 7

7) Base Year: Much more important than you ever thought

• In most modified gross leases, the rent includes the costs of providing all of the normal building services,and the tenant is required to pay the landlord for its pro-rata share of increases in the costs of such services over time.
• Because the Base Year is used each year to measure cost increases, it is imperative that the Base Year be reflective of what it normally costs to run the building.