Property Management

A commercial property manager in Bellevue is negotiating a lease for office space. The tenant wants a gross lease. Under a gross lease structure, who pays operating expenses?

AThe tenant pays all operating expenses directly
BThe landlord pays operating expenses, and the tenant pays a flat rent✓ Correct
COperating expenses are split 50/50 between landlord and tenant
DThe tenant pays only utilities, and the landlord pays all other expenses

Explanation

In a gross lease, the landlord pays most or all operating expenses (taxes, insurance, maintenance) and the tenant pays a single gross rent payment. This is contrasted with a net lease, where the tenant pays some or all operating expenses.

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