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Operating Expense Pass-Through
A commercial lease mechanism passing increases in operational costs, taxes, and insurance directly to tenants above established baselines.
An Operating Expense Pass-Through is the lease mechanism enabling commercial landlords to bill tenants for increases in building operational costs—such as property taxes, insurance, and utilities—above a negotiated baseline.
Pass-through calculations follow specific lease formulas (e.g., base year stops or net lease allocations) to protect ownership net cash flow against inflationary expense pressures.
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