That is a great question. Because the simple answer is that a modified gross lease means that you are going to need to ask the landlord what modified gross means.
If it is a modified gross, it means the lease is not a net lease, but it is not a gross lease. It is a hybrid and the tenant is going to have to cover some portion of the operating expenses. The possibilities are just about endless - kind of like Baskin Robbins - at least 31 different flavors.
In our case, some of our properties include janitorial service and some do not. Some modified gross leases include electric, some do not. In some cases we cover operating for the initial calendar year of the lease (Base Year) and the tenant pays the increases going forward. In some cases, operating expenses are paid by the landlord but the tenant is responsible for increases in taxes and insurance.
So to summarize, the only way to find out what modified gross means, is to ask each individual landlord what modified gross means to him or her.
If it is a modified gross, it means the lease is not a net lease, but it is not a gross lease. It is a hybrid and the tenant is going to have to cover some portion of the operating expenses. The possibilities are just about endless - kind of like Baskin Robbins - at least 31 different flavors.
In our case, some of our properties include janitorial service and some do not. Some modified gross leases include electric, some do not. In some cases we cover operating for the initial calendar year of the lease (Base Year) and the tenant pays the increases going forward. In some cases, operating expenses are paid by the landlord but the tenant is responsible for increases in taxes and insurance.
So to summarize, the only way to find out what modified gross means, is to ask each individual landlord what modified gross means to him or her.
http://answers.loopnet.com/Question/What-does-Modified-gross-mean_3222/
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