Commercial Real-Estate Operating Expense
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A Commercial Real-Estate Operating Expense is a real-estate operating expense that covers the costs associated with the operation, maintenance, and use of a Commercial Property.
- Context:
- It can (typically) be categorized into Fixed Operating Expenses and Variable Operating Expenses, with the former remaining constant regardless of property occupancy levels and the latter fluctuating based on usage or occupancy rates.
- It can range from being a Landlord Commercial Real-Estate Operating Expense to being a Tenant Commercial Real-Estate Operating Expense.
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- Example(s):
- Commercial Real-Estate Property Taxes, Commercial Real-Estate Insurance Premiums, Commercial Real-Estate Utilities, Commercial Real-Estate Repairs and Maintenance, Commercial Real-Estate Janitorial Services, and Commercial Real-Estate Property Management Fees.
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- A Common Area Maintenance (CAM) Tenant Charge, as specified in a Triple Net Lease.
- In a Gross Lease, the landlord absorbs the operating expenses, incorporating them into the fixed rent amount.
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- Counter-Example(s):
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- See: Net Lease, Gross Lease, Triple Net Lease, Variable Operating Expenses, Fixed Operating Expenses.