In today’s competitive real estate market where the cost of utilities and infrastructure use are always rising, shopping centers (whether mall or strip), industrial and office building leases frequently require that the tenant pay all or some portion of the landlord’s operating expenses to maintain the center in good operating condition. That is according to Dina Tecimer, a partner in the real estate and land use practice group at Manatt, Phelps & Phillips LLP. She, along with Tom Muller, a partner in the same group in the L.A. office, say in the exclusive commentary below that landlords usually prepare the proposed lease, frequently on one of the standard forms with an addendum attached containing the more deal specific business terms. “The landlord prepared lease will include broad language encompassing ‘operating expenses” which, more often than not, will include real estate taxes and insurance.”

The views expressed below are the author’s own.

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