How Building Occupancy Impacts Your Lease Rates

Commercial real estate leases are complex to say the least. Many times, up to 70% of the lease cost is wrapped up in the tenant’s obligation to share in the building operating costs, including taxes and utilities.

As a tenant, you might suffer from time poverty and/or lack a thorough understanding of how these costs are calculated, which can lead to overpayments that occur year after year. This is especially likely if vacancy rates continue to remain high, as indicated in a recent Reis report, which states that the office vacancy rate was unchanged at 17.2% in Q2, only slightly lower than their 2010 third- and fourth-quarter high of 17.6%.

Our experience shows that approximately 25% of all landlord billings have some material errors. Generally, the impact of these errors is in the range of $2.00 to $4.50 per square foot, and in extreme cases, up to $10.00 per square foot. Silverback can help unlock the mystery of your real estate lease and ensure that you are paying only your negotiated portions of the building expenses.

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