Article 7 of the lease for The Meadows Racetrack & Casino, signed 9 September 2016, says that any imposition the lessee owes which would not otherwise be due until after the term is payable to the lessor on the last day of the term. Then a proviso carves assessments payable in installments back out. C-PACE assessments run up to thirty years in Ohio, sit on the property tax bill, and carry the lien priority of an ad valorem tax. Texas requires thirty days notice and written consent from the mortgage holder before one is imposed and says nothing about tenants; Florida's statute defines property owner to exclude anyone renting or occupying. Gladstone Commercial's December 2024 noteholders wrote a covenant that stops counting a PACE loan as debt to the extent a tenant pays it. No reported case anywhere decides whether it passes through under a lease taxes clause.
Four New York leases filed with the SEC price the same commodity four different ways. The Graybar Building lease guarantees SL Green a markup of at least 20% over its own utility bill, in a sentence that overrides the tenant's apparent protection of a 1970 Con Edison tariff. One Penn Plaza caps Vornado at 104% of metered cost and sends disagreements to expedited AAA arbitration, and separately raises fixed rent whenever the utility's average cost per kilowatt hour rises. G-III settles on 5% over a named rate schedule. Commercial power prices rose 24% in Ohio and 21.5% in Virginia in the year to July 2026, and the clause decides who absorbs it.
Four executed office leases filed with the SEC all gross up the base year for operating expenses, and no two do it the same way. Life360's lease at 539 Bryant Street grosses the base year up to 95% occupancy and then, in the next three sentences, strips amortized capital costs and market-wide extraordinary increases out of that same base year and puts a floor under utility, service and insurance costs in every later year. Alarm.com's Ninth Amendment, signed 12 March 2020, grosses up base year expenses to 95% and leaves base year taxes at actual. Spaceflight's Herndon lease grosses up to 100% and adds that base year management fees are grossed up as if the building were fully leased with full rents regardless of rental abatements. Tufin's lease at 2 Oliver Street grosses up both years identically and then closes the base year audit window 60 days after the base year ends, before any reconciliation statement arrives. The only reported fight is about the denominator: a Dallas law firm claimed $419,007 and $104,601 in overcharges because its landlord ran the occupancy calculation on 285,111 square feet instead of the 280,432 stipulated in the lease, and the court held that a disclosed overcharge is a breach of lease, not fraud.
The 2026 Atlantic season has produced seven named storms and no hurricanes, and more than a billion dollars of damage. A hurricane deductible would not have fired once. A named storm deductible fires on a 45 mph tropical storm, and on a Gulf Coast property it is usually 5 percent of the insured value, which on a mid-sized shopping center is a seven-figure number the insurer never pays. The AIR CRE form then calls the loss an Insured Loss anyway, bills the deductible to the tenants as an operating expense, and caps rent abatement at insurance proceeds that were never released.
Ask the Bureau of Labor Statistics for the October 2025 CPI-U and it returns a dash. The 43-day appropriations lapse killed the collection and BLS said it could not go back for it. Leases that measure rent from October to October now have a base month that does not exist, the index substitution clause most of them contain does not fire, and the derivatives market and BLS's own productivity program filled the hole with two different numbers.
New York City published its first year of Local Law 97 enforcement data in September 2026: 470 buildings over their carbon cap and $270,150 in penalties. Around 57% of covered buildings are projected to miss the 2030 caps. Whether the owner or the tenants pay turns on an operating expense clause, and on whether its compliance-with-laws language is limited to laws enacted after the lease was signed.
Tariffs just pushed construction materials costs up 6% and office fit-out costs up 5.5% year over year — and every dollar of that has somewhere to go in a CAM reconciliation. Most tenants have 30 to 90 days to catch it before the statement is deemed final, and most never check the clock.
For eight years the operating expense clause did one job: move rising insurance premiums from landlord to tenant. Premiums are now falling, and the clause does not run in reverse.
