Property Management
In Texas commercial property management, a 'gross-up' provision in a NNN lease means:
AThe tenant's CAM charges include a profit margin for the property manager
BVariable operating expenses are grossed up to reflect 100% occupancy for expense allocation purposes✓ Correct
CThe base rent is increased gross every year
DThe tenant pays gross rent with no CAM charges
Explanation
A gross-up provision addresses variable expenses (janitorial, utilities) by restating them as if the building were 100% occupied. This prevents tenants from paying higher per-square-foot CAM charges than they would at full occupancy.
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