How to calculate proportionate share of real estate taxes for office space in NYC?

How to calculate proportionate share of real estate taxes for office space in NYC? In a net type lease a tenant pays real estate taxes based on their proportionate share of real estate tax increases, which means a tenant pays real estate taxes based on their size of space in relation to the office buildings total rentable square feet.  For example, if a tenant occupies 5000 rentable square feet in a 60,000 square foot building then, their proportionate share would be 8.33%. If the tax increase was $2,500 for the entire building. This tenant would pay $208.25 because their proportionate share of space is 8.33% and 8.33% of $2,500 equals $208.25 for their tax bill.

Base Year

 The landlord pays the real estate taxes for the first year. This is called the base year. The base year is the first year of a rent period that sets the pace or precedent for the proportionate share of real estate tax increases.

Verify your Proportionate share

 When you receive your draft lease. It is important to verify that your proportionate share for increases are correct otherwise you can be charged in excess for your bill.

How much are my taxes going to be?

Since real estate taxes cannot be predicted. Ask your broker or a landlord for the previous tenant’s tax increase for the last 1-3 years if possible. This will give you an idea of the future tax bill.

The takeaway from this article/video is to understand how your proportionate share of real estate taxes are calculated and to verify your proportionate share amount so you won’t be overcharged for your tax bill. If you are on the market for office space in NYC and would like a free consultation, then you can contact me here.