For tenants with net leases, the annual expense reconciliation bill from your landlord will arrive soon. You should carefully review the expenses passed through to your company. Top five things to look for:
1. Utility Costs: Should be lower due to lower occupancy hours. When computers and lights aren't on, electricity used is less.
2. Trash Removal: Less trash should mean lower cost, provided the property manager modified service accordingly.
3. Janitorial Services: When spaces aren't occupied, cleaning should logically be less. However, some buildings added cleaning for COVID.
4. Gross Up Clause: This allows the landlord to artificially increase occupancy-sensitive expenses when building occupancy is below a certain percentage. Check your lease for this number.
It makes sense to review your reconciliation even if you are receiving a credit. Operating expenses and tax costs can be a significant part of your total occupancy cost.