Annual cap on the tenant's share of building operating expenses.
Leasing · US, EU
Annual cap on the tenant's share of building operating expenses.
Caps prevent runaway opex pass-throughs in inflationary environments. Most aggressive structure: cumulative compound cap (e.g., 4% per annum, compounded). Most landlord-friendly: non-cumulative annual cap.
Operating expense cap is part of the leasing vocabulary that institutional Class A occupiers, landlords, and advisers use across US, EU markets. Understanding it correctly affects how you read lease documents, model occupancy economics, and benchmark deal terms across cities. Class A Atlas tracks regional variation alongside the global standard so cross-border occupiers can translate quickly.