OPERATING EXPENSE CLAUSES IN COMMERCIAL LEASES: The Capital Expenses Exclusion

Our last note highlighted the importance of effectively negotiating exclusions to Operating Expenses and offered examples of some exclusions that, if not properly negotiated, can significantly impact the tenant’s bottom line.

This note focuses on another important exclusion from its lease that every tenant must aggressively negotiate to obtain, in some form. This important exclusion is the Capital Expenses exclusion. It is fair to say that of all the exclusions to Operating Expenses, this is the single most important one because it is the one with the most money at stake.

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