Office Lease Terms: Extra Charges

Additional Charges:

Buildings usually add charges to base rent. The primary additional charge is electricity.

This is billed in one of three ways:

1) Direct – You pay your own electric bill (this is usually the most desirable)

2) Submetered – there’s a meter in your space that belongs to the building (not the electric company) and they send you an electric bill along with your rent every month. They will often add a surcharge for this (for example: 5-10% on top of your usage)

3) Per square foot/per year: this is usually between $3 and $3.50 per square foot per year regardless of your usage. For example, in a 1000 sf space with the electric at $3.50 psf, the monthly electric charge would be:

$3,500 per year/12 (months) = $291

Other charges tenants are frequently held responsible for are water, sprinkler, sewer, doorman, security guard, and garbage removal. These are usually billed as flat monthly charges.

For example, a 2000 sf office could have a $40 water and a $40 sprinkler monthly charge and the tenant would have to pay the refuse removal company $30 per month for their services