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?

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. I created a quick video describing How to calculate proportionate share of real estate taxes for office space in NYC. Find the link to this video here; How to calculate proportionate share of real estate taxes for office space in NYC? Video.

img

    Understanding How Rentable Square Feet Works 2020 This article clears up the confusion on what...

    Continue reading
    by Roy Somwaru

    The top 3 hidden costs when renting office space in NYC. The first hidden cost is the mark up of...

    Continue reading
    by Roy Somwaru

    How is electricity billed for office space in NYC? In commercial office buildings 3 common methods...

    Continue reading
    by Roy Somwaru

    Join The Discussion



    Contact Number:   212-335-0194



    Contact Number:   212-335-0194