Operating Expense Exclusions. Operating Expenses" shall exclude all Landlord profits and all costs in excess of costs reasonably incurred by prudent operators and managers of similar office building in the Rockville, Maryland area. Landlord shall use commercially reasonable efforts to minimize Operating Expenses. Operating Expenses shall be net of any reimbursement, refund or credit received by Landlord for the corresponding item of Operating Expense. In no event shall Landlord recover from County more than an amount equal to Tenant’s Pro Rata Share of One Hundred Percent (100%) of Operating Expenses. Landlord shall not recover more than the full actual cost of any item through Additional Rent or charges to other Building tenants. Landlord shall make no profit in connection with Operating Expenses nor shall Landlord recover any item of cost twice through Operating Expenses. The following items shall be specifically excluded from the Operating Expenses: (1) expenses for any capital improvements that were made to the Land or Building after the Lease Commencement Date that are not reasonably expected to reduce Operating Expenses; (2) expenses occasioned by fire, windstorm or other insured casualty to the extent Landlord is reimbursed by insurance for such loss; (3) advertising, commissions, tenant improvements and all other expenses incurred in leasing or procuring new tenants; (4) expenses for repairs or improvements to other tenants’ leased space; (5) legal fees incurred in enforcing the terms of any lease or arising out of any mortgage or ground lease affecting the Building; (6) interest, principal, rental, late fees or other costs of any indebtedness or ground lease; (7) the cost of any work or service performed for any tenant at such tenant’s cost; (8) the cost of any work or materials performed or supplied to any facility other than the Building; (9) the cost of any items for which Landlord is reimbursed by insurance, any tenant or otherwise; (10) salaries, wages and benefits of Landlord’s officers, directors, and employees above the level of Building manager; (13) the cost of installing, operating, maintaining or refurbishing any specialty service, such as an observatory, broadcasting facility, luncheon club, restaurant, retail store, sundry shop, athletic or recreational club or locker rooms, meeting rooms or lounges; (14) any charge for depreciation of the Building or equipment; (15) any tenant improvement allowance or other payment from Landlord to Tenant; (16) taxes excluded from the definition of “Taxes”; (17) bad debt losses or reserves therefore; (18) costs of selling, syndicating, financing, mortgaging, or hypothecating any of the Building or Land or Landlord’s interest in the Building or Land; (19) expenses resulting from tortious conduct of Landlord, its employees, agents or contractors; and (20) any janitorial, HVAC and/or electrical expenses for the Leased Premises that Tenant pays directly to the Landlord or third (3rd) party.
Appears in 1 contract
Sources: Lease Agreement
Operating Expense Exclusions. Notwithstanding anything contained in the foregoing Section 3.1 the following expenses shall be excluded from Operating Expenses" shall exclude all :
3.2.1 Depreciation or amortization on the initial construction of the Project;
3.2.2 Debt service (including without limitation, interest, principal and any impound payments) required to be made on any mortgage or deed of trust recorded with respect to the Project;
3.2.3 The cost of leasehold improvements made for any tenants of the Project;
3.2.4 Leasing commissions, costs and disbursements and other expenses (including advertising) incurred in connection with leasing, renovating, or improving space for tenants or other occupants of the Project;
3.2.5 Repairs and replacements paid for by insurance proceeds;
3.2.6 Specific costs incurred for the account of, or separately billed to and paid by specific tenants of the Project;
3.2.7 Any cost or expense to the extent to which Landlord profits and all costs in excess of costs reasonably incurred by prudent operators and managers of similar office building in the Rockville, Maryland area. Landlord shall use commercially reasonable efforts to minimize is paid or reimbursed (other than as a payment for Operating Expenses. Operating Expenses shall be net of ), including, but not necessarily limited to, (i) work or services performed for any reimbursementtenant (including Tenant) at such tenant’s cost, refund or credit received by Landlord for (ii) the corresponding item of Operating Expense. In no event shall Landlord recover from County more than an amount equal to Tenant’s Pro Rata Share of One Hundred Percent (100%) of Operating Expenses. Landlord shall not recover more than the full actual cost of any item through Additional Rent for which Landlord is paid or reimbursed by insurance, warranties, service contracts, condemnation proceeds or otherwise, (iii) increased insurance or taxes assessed specifically to any Tenant of the Building, (iv) the portion of charges (including applicable taxes) for electricity, water and other utilities for which Landlord is entitled to other Building tenants. Landlord shall make no profit in connection with Operating Expenses nor shall Landlord recover reimbursement from any item tenant, and (v) the cost of cost twice through Operating Expenses. The following items shall be specifically excluded from the Operating Expenses: (1) expenses for any capital improvements that were made to the Land or Building after the Lease Commencement Date that are not reasonably expected to reduce Operating Expenses; (2) expenses occasioned by fireHVAC, windstorm janitorial or other insured casualty services provided to Tenants on an extra-cost basis after regular business hours;
3.2.8 Salaries and bonuses of officers and executives of Landlord and administrative employees above the extent Landlord is reimbursed by insurance for such loss; (3) advertising, commissions, tenant improvements grade of property manager or building supervisor and all other expenses incurred in leasing or procuring new tenants; (4) expenses for repairs or improvements to other tenants’ leased space; (5) legal fees incurred in enforcing the terms of any lease or arising out of any mortgage or ground lease affecting the Building; (6) interest, principal, rental, late fees or other costs of any indebtedness or ground lease; (7) the Landlord’s general overhead;
3.2.9 The cost of any work or service performed on an extra-cost basis for any tenant at such tenant’s cost; of the building (8) the including Tenant);
3.2.10 The cost of any work or materials services performed or supplied to for any facility other property other than the Building; (9) ;
3.2.11 Interest on debt or principal amortization payments or any other payments on any mortgage or any other payments under any ground lease;
3.2.12 Any fees, costs and commissions incurred in procuring or attempting to procure other tenants, including, but not necessarily limited to brokerage commissions, finder’s fees, attorney’s fees and expenses and entertainment cost and travel expenses and any costs of advertising or promotion of the Building;
3.2.13 Any cost included in Operating Expenses representing an amount paid to a person, firm, corporation or other entity related to Landlord which is in excess of the amount which would have been paid on an arms-length basis in the absence of such relationship;
3.2.14 Any costs of painting or decorating of any items for which Landlord is reimbursed interior parts of the Building occupied or occupiable by insurancetenants;
3.2.15 Any costs necessary to cure any violation of any law, ordinance or regulation applicable to the Building, existing as of the commencement date of this Lease or to remediate any tenant environmental condition existing as of the commencement date of this Lease, including the removal of, or otherwise; (10) salariesother steps taken with respect to, wages and benefits of Landlord’s officersasbestos located in the Building, directors, and employees above the level of Building manager; (13) the cost of installing, operating, maintaining or refurbishing any specialty service, unless such as an observatory, broadcasting facility, luncheon club, restaurant, retail store, sundry shop, athletic or recreational club or locker rooms, meeting rooms or lounges; (14) any charge for depreciation condition was caused by Tenant;
3.2.16 Depreciation of the Building or equipment; (15) any tenant improvement allowance part thereof;
3.2.17 Replacement or contingency reserves or any bad debt loss, rent loss or reserves for bad debts or rent loss;
3.2.18 Expenses for renovating Tenant’s space;
3.2.19 Legal or other payment from Landlord professional fees relating to Tenant; leasing, financing, tenant disputes or other services not related to the normal maintenance, cleaning, repair or protection of the Building;
3.2.20 If any operating costs are incurred because of a change of policy or practice in operating the Building that causes an increase in operating expenses for the Building over the operating cost base expenses, such expenses shall be included as Operating Expenses, only if the change in policy or practice would have been made by a reasonably prudent operator of a comparable building in the metropolitan area in which the Building is located. These changed expenses shall be included as Operating Expenses to the extent of the increase in cost over the projected cost that would have been included in the Operating Cost base had the policy or practice been in effect during the entire Operating Cost Base Year.
3.2.21 costs, expenses and fees relating to solicitation of, advertising for and entering into leases and other occupancy arrangements for space in the Building, including but not limited to legal fees, space planners’ fees, real estate brokers’ leasing commissions and advertising expenses;
3.2.22 costs of defending any lawsuits with any mortgagee (16) taxes excluded from except as the definition actions of “Taxes”; (17) bad debt losses or reserves therefore; (18) Tenant may be in issue), costs of selling, syndicating, financing, mortgaging, mortgaging or hypothecating any of the Building or Land or Landlord’s interest in the Building, costs of any disputes between Landlord and its employees (if any) not engaged in Building operation, disputes of Landlord with Building management, or Land; (19) outside fees paid in connection with disputes with other tenants or adjacent property owners;
3.2.23 costs, expenses resulting from tortious conduct of Landlordor judgments occasioned by casualty, its employeesinjury or damage, agents or contractors; and (20) any janitorial, HVAC and/or electrical expenses for the Leased Premises that Tenant pays directly to the extent that such costs, expenses or judgments are or are required to be covered by insurance to be maintained by Landlord under this Lease; and
3.2.24 With exception of those items specifically referred to as an inclusion, the cost of any repairs, alterations, additions, improvements, changes, replacements or third (3rd) partyother items which under generally accepted accounting principles are properly classified as capital expenses.
Appears in 1 contract
Operating Expense Exclusions. Operating Expenses" shall exclude all Landlord profits and all costs in excess of costs reasonably incurred by prudent operators and managers of similar office building in Notwithstanding the Rockvilleforegoing, Maryland area. Landlord shall use commercially reasonable efforts to minimize Operating Expenses. ----------------------------- Operating Expenses shall be net not include the following:
a. Cost of any reimbursement, refund repairs or credit received by Landlord for the corresponding item of Operating Expense. In no event shall Landlord recover from County more than an amount equal to Tenant’s Pro Rata Share of One Hundred Percent (100%) of Operating Expenses. Landlord shall not recover more than the full actual cost of any item through Additional Rent or charges to other Building tenants. Landlord shall make no profit in connection with Operating Expenses nor shall Landlord recover any item of cost twice through Operating Expenses. The following items shall be specifically excluded from the Operating Expenses: (1) expenses for any capital improvements that were made to the Land or Building after the Lease Commencement Date that are not reasonably expected to reduce Operating Expenses; (2) expenses work occasioned by fire, windstorm or other insured casualty of an insurable nature or by the exercise of eminent domain if and to the extent Landlord is reimbursed by insurance for such loss; (3) advertising, receives compensation.
b. Leasing commissions, tenant improvements attorneys' fees, costs and all disbursements and other expenses incurred in leasing connection with negotiations or procuring new disputes with tenants; (4) expenses , other occupants, or prospective tenants or occupants.
c. Renovating or otherwise improving, or decorating or redecorating space for repairs tenants or improvements to other tenants’ leased space; (5) legal fees incurred in enforcing the terms occupants of any lease or arising out of any mortgage or ground lease affecting the Building; (6) interest, principal, rental, late fees or other .
d. Landlord's costs of any indebtedness electricity and other services that are sold or ground lease; (7) the cost of any work or service performed for any tenant at such tenant’s cost; (8) the cost of any work or materials performed or supplied provided to any facility other than the Building; (9) the cost of any items tenants and for which Landlord is entitled to be reimbursed by insurancetenants as an additional charge or rental over and above the Base Rent and Additional Rent payable under this Lease with such tenant.
e. Costs incurred by Landlord for alterations or improvements which are considered capital improvements or replacements under generally accepted accounting principles, except as expressly provided above in Section 3.2(a)(i)(F).
f. Depreciation and amortization, except as provided above in Section 3.2(a)(i)(F).
g. Expenses in connection with services or other benefits which are not made available to Tenant but which are provided to other tenants or occupants.
h. Costs incurred due to violation by Landlord or any tenant of the terms and conditions of any lease.
i. Interest on debt or otherwise; amortization payments on any mortgage or mortgages, and rental under any ground leases.
j. Any costs, fines or penalties incurred due to violations by Landlord or any governmental rule or authority, except if and to the extent such costs, fines or penalties are the subject of a good faith appeal by Landlord.
k. Compensation paid to officers and executives of Landlord (10) salaries, wages but it is understood that the on-site building manager and other on-site employees below the grade of building manager may carry a title such as vice president and the salaries and related benefits of Landlord’s officers, directors, these officer/employees of Landlord would be allowable Operating Expenses) and employees above the level of Building manager; (13) the cost of installing, operating, maintaining or refurbishing any specialty service, such as an observatory, broadcasting facility, luncheon club, restaurant, retail store, sundry shop, athletic or recreational club or locker rooms, meeting rooms or lounges; (14) any charge for depreciation general corporate overhead of the Building or equipment; (15) any tenant improvement allowance Landlord.
l. Cost incurred in the removal of asbestos or other payment from Landlord substances considered to be detrimental to the health or the environment of occupants of the Building.
m. Costs associated with bringing the Building in compliance of general building codes, which codes were enacted prior to Tenant; (16) taxes excluded from 's occupancy, whether such work is performed before or after the definition Commencement Date of “Taxes”; (17) bad debt losses or reserves therefore; (18) costs of selling, syndicating, financing, mortgaging, or hypothecating any of the Building or Land or Landlord’s interest in the Building or Land; (19) expenses resulting from tortious conduct of Landlord, its employees, agents or contractors; and (20) any janitorial, HVAC and/or electrical expenses for the Leased Premises that Tenant pays directly to the Landlord or third (3rd) partythis Lease.
Appears in 1 contract
Sources: Lease Agreement (Wells Real Estate Investment Trust Inc)
Operating Expense Exclusions. Notwithstanding the provisions of Section 7.4 above, the following costs and expenses shall be excluded from Landlord’s Operating Expenses" shall exclude all Landlord profits and all costs in excess of costs reasonably incurred by prudent operators and managers of similar office building in the Rockville:
(1) Landlord’s Tax Expenses;
(2) principal or interest on indebtedness, Maryland area. Landlord shall use commercially reasonable efforts to minimize Operating Expenses. Operating Expenses shall be net of any reimbursement, refund debt amortization or credit received ground rent paid by Landlord for the corresponding item of Operating Expense. In no event shall Landlord recover from County more than an amount equal to Tenant’s Pro Rata Share of One Hundred Percent (100%) of Operating Expenses. Landlord shall not recover more than the full actual cost of any item through Additional Rent or charges to other Building tenants. Landlord shall make no profit in connection with Operating Expenses nor shall Landlord recover any item mortgages, deeds of cost twice through Operating Expenses. The following items shall be specifically excluded from the Operating Expenses: (1) expenses for any capital improvements that were made to the Land or Building after the Lease Commencement Date that are not reasonably expected to reduce Operating Expenses; (2) expenses occasioned by fire, windstorm trust or other insured casualty to the extent Landlord is reimbursed by insurance for such loss; (3) advertisingfinancing encumbrances, commissions, tenant improvements and all other expenses incurred in leasing or procuring new tenants; (4) expenses for repairs or improvements to other tenants’ leased space; (5) legal fees incurred in enforcing the terms of any lease or arising out of any mortgage or ground lease affecting the Building; (6) interest, principal, rental, late fees or other costs of any indebtedness or ground lease; (7) the cost of any work or service performed for any tenant at such tenant’s cost; (8) the cost of any work or materials performed or supplied to any facility other than the Building; (9) the cost of any items for which Landlord is reimbursed by insurance, any tenant or otherwise; (10) salaries, wages and benefits of Landlord’s officers, directors, and employees above the level of Building manager; (13) the cost of installing, operating, maintaining or refurbishing any specialty service, such as an observatory, broadcasting facility, luncheon club, restaurant, retail store, sundry shop, athletic or recreational club or locker rooms, meeting rooms or lounges; (14) any charge for depreciation leases of the Building or equipment; the Property;
(153) capital improvements to the Property other than those provided in subsection 7.4(i) above;
(4) legal, auditing, consulting and professional fees and other costs paid or incurred in connection with financings, refinancings or sales of any tenant improvement allowance interest in Landlord or other payment from Landlord to Tenant; (16) taxes excluded from the definition of “Taxes”; (17) bad debt losses or reserves therefore; (18) costs of selling, syndicating, financing, mortgaging, or hypothecating any of the Building or Land or Landlord’s interest in the Building or Land; the Property or in connection with any ground lease (including, without limitation, recording costs, mortgage recording taxes, title insurance premiums and other similar costs, but excluding those legal, auditing, consulting and professional fees and other costs incurred in connection with the normal and routine maintenance and operation of the Building and/or the Site);
(5) legal fees, space planner’s fees, architect’s fees, leasing and brokerage commissions, advertising and promotional expenditures and any other marketing expense incurred in connection with the leasing of space in the Building (including new leases, lease amendments, lease terminations and lease renewals);
(6) the cost of any items to the extent to which such cost is reimbursed to Landlord by tenants of the Property (other than pursuant to this Section 2.6), or other third parties, or is covered by a warranty to the extent of reimbursement for such coverage;
(7) expenditures for any leasehold improvement which is made in connection with the preparation of any portion of the Building for occupancy by any tenant or which is not made generally to or for the benefit of the Building or the Property;
(8) the cost of performing work or furnishing service to or for any tenant other than Tenant, at Landlord’s expense, to the extent such work or service is in excess of any work or service Landlord is obligated to provide to Tenant or generally to other tenants in the Building at Landlord’s expense;
(9) the cost of repairs or replacements incurred by reason of fire or other casualty, or condemnation (other than costs not in excess of the deductible on any insurance maintained by Landlord which provides a recovery for such repair or replacement), to the extent Landlord actually receives proceeds of property and casualty insurance policies or condemnation awards or would have received such proceeds had Landlord maintained the insurance required to be maintained by Landlord under this Lease;
(10) the cost of acquiring sculptures, paintings or other objects of fine art in the Building in excess of amounts typically spent for such items in Class A office buildings of comparable quality in the competitive area of the Building;
(11) bad debt loss, rent loss, or reserves for bad debt or rent loss;
(12) reserves;
(13) contributions to charitable or political organizations;
(14) expenses related solely and exclusively to the operation of the retail space in the Building;
(15) damage and repairs and other expenses necessitated by the negligence or willful misconduct of Landlord Parties;
(16) fees, costs and expenses incurred by Landlord in connection with or relating to claims against or disputes with tenants of the Building;
(17) interest, fines or penalties for late payment or violations of Legal Requirements by Landlord, if any;
(18) the cost of remediation and removal of “Hazardous Materials” (as that term is defined in Section 11.2 below) in the Building or on the Property required by “Hazardous Materials Laws” (as that term is defined in Section 11.2 below), provided, however, that the provisions of this clause 18 shall not preclude the inclusion of costs with respect to materials (whether existing at the Property as of the date of this Lease or subsequently introduced to the Property) which are not as of the date of this Lease (or as of the date of introduction) deemed to be Hazardous Materials under applicable Hazardous Materials Laws but which are subsequently deemed to be Hazardous Materials under applicable Hazardous Materials Laws (it being understood and agreed that Tenant shall nonetheless be responsible under Section 11.2 of this Lease for all costs of remediation and removal of Hazardous Materials to the extent caused by Tenant Parties);
(19) expenses resulting from tortious conduct costs of Landlordreplacements, its employeesalterations or improvements necessary to make the Building or the Property comply with Legal Requirements in effect and applicable to the Building and/or the Property prior to the date of this Lease (provided, agents however, that the provisions of this clause 19 shall not preclude the inclusion of costs of compliance with Legal Requirements enacted prior to the date of this Lease if such compliance is required for the first time by reason of any amendment, modification or contractors; and reinterpretation of a Legal Requirement which is imposed after the date of this Lease);
(20) costs and expenses incurred for the administration of the entity which constitutes Landlord, as the same are distinguished from the costs of operation, management, maintenance and repair of the Property, including, without limitation, entity accounting and legal matters;
(21) salaries and all other compensation (including fringe benefits) of partners, officers and executives above the grade of Regional Property Manager;
(22) the wages and benefits of any janitorialemployee who does not devote substantially all of his or her employed time to the Property unless such wages and benefits are prorated on a reasonable basis to reflect time spent on the operation and management of the Property vis-à-vis time spent on matters unrelated to the operation and management of the Property;
(23) except as may be otherwise expressly provided in this Lease with respect to specific items, HVAC and/or electrical the cost of any services or materials provided by any party related to Landlord, to the extent such cost exceeds, the reasonable cost for such services or materials absent such relationship in self-managed buildings similar to the Building in the vicinity of the Building;
(24) depreciation for the Building;
(25) expenses incurred for the repair, maintenance or operation of the 100 Clarendon Garage, including but not limited to salaries and benefits of any attendants, electricity, insurance and taxes; and
(26) expenses for any item or service for which Tenant separately reimburses Landlord (i.e., items or services in excess of what Landlord is obligated to provide to Tenant or generally to other tenants in the Leased Premises that Tenant pays directly Building), and expenses incurred by Landlord to the Landlord extent the same are separately reimbursable or reimbursed from any other tenants, occupants of the property or third (3rd) partyparties.
Appears in 1 contract