Rebilling Recovery Types

Recovery Types

It is important to understand the functionality of the various recovery types offered by eSite for commercial properties. Use this information to determine which recovery types work best to recapture eligible operating and capital expenses. Since recovery types are set at the tenant level, more than one type can be used per tenant. This widens the range of possibilities for recouping increased expenses from tenants.

eSite uses the following recovery types:

Net

Net assumes tenants are responsible for all operating expenses, and all or a portion of capital expenses. This type of lease is frequently used for industrial properties, especially when there is only one tenant in the facility.

In these cases, it is clearly shown that the charges incurred for operations have only one beneficiary. Some office markets, however, also use this lease format because it allows the landlord to quote a lower base rental rate.

The following types hold tenants responsible for increases in operating expenses above a predetermined base.

Base Year

Base Year sets your obligation as the sum of the expenses incurred that can be allocated to a designated fiscal year calendar. A tenant would pay for increases in operating expenses over the amount established for its base year.

Expense Stop

Expense Stop assumes a fixed dollar amount for operating expenses is established as your obligation, with all expenses incurred above that point being the tenant’s responsibility. The stop does not need to be set at the expected current level of expenses.

Expense Stop per Square Foot

Expense Stop per Square Foot assumes a fixed dollar amount per square foot the tenant is occupying for operating expenses is established as your obligation, with all expenses incurred above that point being the tenant’s responsibility. The stop does not need to be set at the expected current level of expenses.