Property Management
In New Mexico commercial real estate, a 'gross-up provision' in a lease allows the landlord to:
AIncrease the base rent during the lease term
BCalculate operating expenses as if the building were fully occupied, even when vacancies exist✓ Correct
CGross up the tenant's annual sales for percentage rent purposes
DCharge the tenant for capital improvements
Explanation
A gross-up provision allows landlords to calculate variable operating expenses (like utilities) as if the building were at a specified occupancy (e.g., 95%), protecting full-paying tenants from subsidizing vacant space costs.
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