The reference year for operating expense escalations under a modified-gross lease.
Lease structure · US
The reference year for operating expense escalations under a modified-gross lease.
The base year is typically the first full calendar year of the lease term. Escalations in subsequent years are calculated as the difference between current-year operating expenses and the base-year operating expenses. Negotiate the base year explicitly — a partial first year as the base year produces inflated escalations.
Base year is part of the lease structure vocabulary that institutional Class A occupiers, landlords, and advisers use across US markets. Understanding it correctly affects how you read lease documents, model occupancy economics, and benchmark deal terms across cities. Class A Atlas tracks the US definition alongside the global standard so cross-border occupiers can translate quickly.