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How Do I Avoid Paying for Vacant-Space Costs in CAM?

📖 2,358 words🗓️ Published Jun 23, 2026

Direct Answer

When a building sits half-empty, the landlord still has to mow the lawn, light the lobby, and pay the management company — and without the right clause, *you* pick up the tab for space nobody's renting. The money move that stops this cold is a gross-up clause, and the counterintuitive truth is that the gross-up actually *protects the tenant* when written correctly. Demand that variable operating expenses be grossed up to 95% occupancy (some landlords push 100% — fight for 95%), so the per-tenant math stays stable regardless of vacancy. Here's why it matters: in a building running at 60% occupancy, an *ungrossed* janitorial line of $2.00/sq ft gets divided across fewer paying tenants, spiking your share — but a proper gross-up calculates costs *as if* the building were 95% full and bills you only your true 95%-occupied share. On 5,000 square feet, a mis-handled vacancy pass-through can cost you $8,000–$15,000 a year during a downturn. The other half of the defense: insist your CAM is calculated on a fixed pro-rata percentage tied to total rentable area, never on "occupied area," and exclude capital expenditures, leasing commissions, tenant-improvement costs for other tenants, and marketing for vacant space — all of which landlords love to smuggle into CAM. Vacant space is the landlord's risk, not yours. Make the lease say so.

Why Vacancy Costs Land On You Without A Gross-Up

Operating expenses come in two flavors: fixed (property taxes, insurance, the management base) and variable (janitorial, utilities, trash, supplies — costs that scale with how full the building is). The danger is in how the landlord allocates these when the building has empty suites.

Picture a 100,000 sq ft building that's only 60% leased. Variable janitorial runs $200,000 when full. At 60% occupancy, actual janitorial might only be $120,000 — but if the landlord divides that $120,000 across just the 60,000 leased square feet, that's $2.00/sq ft. Now imagine the building fills to 95%: janitorial jumps to roughly $190,000 spread over 95,000 sq ft, also about $2.00/sq ft. The per-tenant rate *should* be stable. The abuse happens when the landlord bills variable costs against the smaller occupied base during high vacancy, inflating your effective rate, then *also* fails to gross up — so you eat the inefficiency of an empty building.

The gross-up exists precisely to neutralize this. It's not a landlord trick when done right — it's tenant insurance against vacancy swings.

How A Gross-Up Clause Actually Protects You

A gross-up provision says: *variable operating expenses shall be adjusted as if the building were 95% (or 100%) occupied.* This means the landlord calculates what janitorial, utilities, and trash *would* cost at near-full occupancy, then bills each tenant only their fixed pro-rata share of that grossed-up number.

Why this helps you:

It locks your per-square-foot rate. Your CAM per square foot stays roughly constant whether the building is 60% or 95% full. No vacancy spike.
It prevents the "shrinking denominator" abuse. Because costs are spread as if the building is 95% occupied, the landlord can't divide real costs across only the paying tenants.
It keeps the landlord honest in good times too. When the building fills up, you don't suddenly get charged for the *additional* tenants' usage beyond your share.

The fight is over the gross-up percentage. Push for 95%, not 100%. At 100%, the landlord grosses up costs for a fully-occupied scenario that may never happen, slightly overcharging you. At 95%, you get protection without overpaying. Also insist the gross-up applies only to variable expenses — fixed costs like taxes don't change with occupancy and shouldn't be grossed up at all.

The Exclusions That Keep Vacant-Space Costs Out Entirely

A gross-up handles variable operating costs. But landlords also try to recover the *direct costs of their vacancy* through CAM — and those should be flatly excluded. Get these struck from the operating-expense definition:

Leasing commissions and broker fees for filling vacant space. That's the landlord's cost of doing business.
Tenant-improvement allowances and buildout costs for *other* tenants. You're not paying to renovate a competitor's suite.
Marketing, advertising, and signage to lease vacant space. Pure landlord expense.
Capital expenditures — roof replacements, HVAC system replacements, structural work — unless amortized over useful life *and* only the portion required by law or that reduces operating costs. Even then, cap the annual amortized amount.
Costs reimbursed by insurance, warranties, or other tenants. No double recovery.
The landlord's own corporate overhead, legal fees, and financing costs.

A tenant-rep rule of thumb: if a cost exists *because* space is empty, it's the landlord's problem. The lease's operating-expense definition should be a closed list of permitted costs, not an open-ended "all costs of operating the building."

Fix The Denominator: Total Rentable, Not Occupied

The gross-up protects the numerator (total costs). The denominator — what your costs get divided by — needs its own protection. Insist:

Your pro-rata share is your rentable SF divided by the building's TOTAL rentable SF, expressed as a fixed percentage in the lease.
The denominator is never "occupied square footage" or "leased square footage."
If the building is expanded or reconfigured, your percentage is recalculated transparently, not adjusted at the landlord's discretion.

This pairs with the gross-up: total-rentable denominator plus a 95% gross-up means vacancy genuinely cannot inflate your bill.

Verify It Every Year With An Audit

None of this works if you can't check the math. Pair the gross-up and exclusions with an annual audit right:

Demand the reconciliation show the gross-up calculation explicitly — the occupancy assumption used and the variable costs adjusted.
Confirm no excluded items crept into the operating-expense pool.
Use the error-shift clause: if the audit finds overcharges of 3–5%+, the landlord pays for the audit. CAM audits commonly recover 5–10% of billed amounts, with gross-up errors among the most frequent findings.

BOMA's expense standards give you a benchmark to spot a building billing well above market.

flowchart TD A["Building at 60% occupancy"] --> B{Gross-up clauseunder br/over in lease?} B -->|No| C["Variable costs spread overunder br/over only paying tenants"] C --> D["Your CAM rate SPIKESunder br/over +$8K-15K/yr exposure"] B -->|Yes - 95%| E["Costs calculated as ifunder br/over 95% occupied"] E --> F["You pay only your trueunder br/over fixed pro-rata share"] F --> G["Stable CAM regardlessunder br/over of vacancy"]

flowchart LR A[Total building costs] --> B["Gross up variableunder br/over to 95% occupancy"] B --> C["Subtract excluded items:under br/over commissions, TIs, capex, marketing"] C --> D["Multiply by your FIXEDunder br/over pro-rata percentage"] D --> E["Your true CAM billunder br/over vacancy-proof"]

Related on PULSE

[How Do I Avoid Paying Double Brokerage Fees?](/knowledge/q13701)
[How Do I Avoid Paying for the Landlord's Capital Improvements?](/knowledge/q13676)
[How Do I Avoid the 'Controllable vs Uncontrollable' CAM Trap?](/knowledge/q13749)
[How Do I Get Out of a Commercial Lease Early Without Paying a Fortune?](/knowledge/q13646)
[NCAA compliance gotchas every HS family should know before paying a recruiting service in 2027](/knowledge/q11082)
[How Do I Dispute a CAM True-Up Bill I Disagree With?](/knowledge/q13832)

Negotiate a "Vacancy Factor" or "Load Factor" Adjustment

Beyond the gross-up clause, a vacancy factor (sometimes called a "load factor" or "vacancy credit") directly reduces the CAM costs you're billed for empty space. This provision states that the landlord must multiply variable CAM expenses by the building's actual occupancy percentage before allocating them to tenants. For example, if the building is 70% occupied, you'd only pay 70% of the variable CAM costs — the landlord absorbs the rest. Push for this language in your lease: "Variable operating expenses shall be multiplied by the actual occupancy percentage of the building (not to exceed 100%) before allocation." Some landlords resist, arguing they need full cost recovery, but you can counter that they benefit from higher rents when the building fills up. This clause is especially powerful in multi-tenant buildings where vacancy fluctuates — it can save you 5–20% annually on CAM charges, depending on vacancy levels.

Use a "Base Year" or "Stop" That Excludes Vacancy Impact

Another effective strategy is structuring your base year or expense stop to exclude vacancy-related cost spikes. In a gross lease with an expense stop, you only pay operating costs above a certain threshold (e.g., $10/sq ft). Negotiate that the base year calculation uses grossed-up expenses at 95% occupancy — this prevents the landlord from setting a low base year when the building is empty, then charging you huge overages later when costs rise. For triple-net (NNN) leases, you can add a clause stating that CAM costs for the base year (or any comparison year) must be recalculated as if the building were 95% occupied. This locks in a fair baseline, so you're not penalized for the landlord's leasing failures. Landlords may push back on "hypothetical" calculations, but it's a standard commercial real estate practice — many national retailers and credit tenants demand it.

Cap Your Year-Over-Year CAM Increase

A CAM cap (e.g., 3–5% annual increase) limits how much your total CAM charges can rise each year, regardless of vacancy changes. This doesn't directly address vacant-space costs, but it indirectly protects you: if the landlord tries to spread empty-space costs across fewer tenants, the cap prevents the per-square-foot charge from skyrocketing. Negotiate a hard cap on variable CAM (excluding taxes and insurance, which are harder to control) — aim for 3–4% in stable markets, 5% in volatile ones. Some landlords offer a "consumer price index (CPI) plus 2%" formula, which can exceed 5% in high-inflation years, so a fixed percentage is safer. Combine this with the gross-up clause for maximum protection: the gross-up stabilizes the base, and the cap limits annual escalation. This dual approach can reduce your total CAM exposure by 10–30% over a 5–10 year lease term.

FAQ

What exactly is a gross-up clause and how does it stop me from paying for vacant space? A gross-up clause lets the landlord recalculate variable operating expenses—like utilities, janitorial, and management fees—as if the building were 95% or 100% occupied. This prevents you from being charged for costs that would normally be spread across empty suites, because the landlord artificially inflates the occupancy to allocate those costs only to occupied tenants.

Can I negotiate a cap on how much my CAM costs can increase due to vacancy? Yes, you can often negotiate a cap that limits annual CAM increases to a fixed percentage (commonly 3–5%) or ties them to the consumer price index. This protects you from sudden spikes when more space goes vacant and the landlord tries to recover those costs from fewer paying tenants.

What other lease language should I look for to avoid paying for empty spaces? Beyond a gross-up clause, request a “vacancy factor” or “vacancy credit” that explicitly excludes costs tied to unoccupied suites—such as their share of common area maintenance, property taxes, or insurance. Also ask for a “base year” or “stop” that locks in a fixed amount for CAM, so you’re only responsible for increases above that baseline.

Does the type of property—office vs. retail—affect how vacant-space costs are handled? Yes, it can. Office leases often use gross-up clauses to normalize expenses, while retail leases may rely more on “pro-rata share” calculations based on leasable square footage. In retail, you might also see “common area maintenance” defined narrowly to exclude costs tied to vacant anchor stores or outlots, so review the definitions carefully.

If I’m in a multi-tenant building, can the landlord still charge me for vacant space if I have a gross-up clause? A properly drafted gross-up clause should prevent that, but only if it’s written to cap variable expenses at the occupancy level you agree on (e.g., 95%). If the landlord uses a different gross-up method—like “actual occupancy” plus a percentage—you could still be charged for vacant space. Always have your attorney confirm the clause uses a fixed occupancy assumption.

What happens if I don’t have a gross-up clause—can I still fight vacant-space charges? You can try to negotiate a waiver or amendment mid-lease, but it’s harder once signed. Without the clause, your best leverage is to argue that the costs aren’t “reasonable and necessary” under your lease’s standard, or that the landlord hasn’t mitigated vacancy by marketing the space. However, most leases give the landlord broad discretion, so prevention is far easier than cure.

Sources

CBRE, "Operating Expense Pass-Throughs and the Gross-Up Provision" — occupier guidance.
JLL, "Tenant Guide to CAM, Gross-Ups, and Vacancy Cost Allocation."
Cushman & Wakefield, "Lease Audit Findings: Common Operating Expense Errors."
BOMA International, "Operating Expense Accounting and Building Benchmarks."
NAIOP, "Commercial Lease Operating Expense Structures and Exclusions."
The Tenant Advisor / tenant-rep broker commentary on gross-up clauses and excluded costs.

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![How Do I Avoid Paying for Vacant-Space Costs in CAM?](https://orchardbenefits.ca/wp-content/uploads/2025/05/Empty-Office-Spaces.png)

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# How Do I Avoid Paying for Vacant-Space Costs in CAM?

## Direct Answer

When a building sits half-empty, the landlord still has to mow the lawn, light the lobby, and pay the management company — and without the right clause, *you* pick up the tab for space nobody's renting. The money move that stops this cold is a **gross-up clause**, and the counterintuitive truth is that the gross-up actually *protects the tenant* when written correctly. Demand that variable operating expenses be **grossed up to 95% occupancy** (some landlords push 100% — fight for 95%), so the per-tenant math stays stable regardless of vacancy. Here's why it matters: in a building running at **60% occupancy**, an *ungrossed* janitorial line of **$2.00/sq ft** gets divided across fewer paying tenants, spiking your share — but a proper gross-up calculates costs *as if* the building were 95% full and bills you only your true 95%-occupied share. On **5,000 square feet**, a mis-handled vacancy pass-through can cost you **$8,000–$15,000 a year** during a downturn. The other half of the defense: insist your CAM is calculated on a **fixed pro-rata percentage tied to total rentable area**, never on "occupied area," and exclude **capital expenditures, leasing commissions, tenant-improvement costs for other tenants, and marketing for vacant space** — all of which landlords love to smuggle into CAM. Vacant space is the landlord's risk, not yours. Make the lease say so.

## Why Vacancy Costs Land On You Without A Gross-Up

![How Do I Avoid Paying for Vacant-Space Costs in CAM? — Why Vacancy Costs Land On You Without A Gross-Up](https://image.pollinations.ai/prompt/high%20quality%20editorial%20business%20professional%20office%20photograph%20illustrating%20Why%20Vacancy%20Costs%20Land%20On%20You%20Without%20A%20Gross-Up%20How%20Do%20I%20Avoid%20Paying%20for%20Vacan%2C%20realistic%20magazine%20style%2C%20warm%20light%2C%20no%20text%2C%20no%20watermark?width=1200&height=675&nologo=true&model=flux&seed=55685)


Operating expenses come in two flavors: **fixed** (property taxes, insurance, the management base) and **variable** (janitorial, utilities, trash, supplies — costs that scale with how full the building is). The danger is in how the landlord allocates these when the building has empty suites.

Picture a **100,000 sq ft building** that's only **60% leased**. Variable janitorial runs **$200,000** when full. At 60% occupancy, actual janitorial might only be **$120,000** — but if the landlord divides that $120,000 across just the 60,000 leased square feet, that's **$2.00/sq ft**. Now imagine the building fills to 95%: janitorial jumps to roughly $190,000 spread over 95,000 sq ft, also about $2.00/sq ft. The per-tenant rate *should* be stable. The abuse happens when the landlord bills variable costs against the **smaller occupied base during high vacancy**, inflating your effective rate, then *also* fails to gross up — so you eat the inefficiency of an empty building.

The gross-up exists precisely to neutralize this. It's not a landlord trick when done right — it's tenant insurance against vacancy swings.

## How A Gross-Up Clause Actually Protects You

![How Do I Avoid Paying for Vacant-Space Costs in CAM? — How A Gross-Up Clause Actually Protects You](https://image.pollinations.ai/prompt/high%20quality%20editorial%20business%20professional%20office%20photograph%20illustrating%20How%20A%20Gross-Up%20Clause%20Actually%20Protects%20You%20How%20Do%20I%20Avoid%20Paying%20for%20Vacant-Spa%2C%20realistic%20magazine%20style%2C%20warm%20light%2C%20no%20text%2C%20no%20watermark?width=1200&height=675&nologo=true&model=flux&seed=36222)


A gross-up provision says: *variable operating expenses shall be adjusted as if the building were 95% (or 100%) occupied.* This means the landlord calculates what janitorial, utilities, and trash *would* cost at near-full occupancy, then bills each tenant only their **fixed pro-rata share** of that grossed-up number.

Why this helps you:

- **It locks your per-square-foot rate.** Your CAM per square foot stays roughly constant whether the building is 60% or 95% full. No vacancy spike.
- **It prevents the "shrinking denominator" abuse.** Because costs are spread as if the building is 95% occupied, the landlord can't divide real costs across only the paying tenants.
- **It keeps the landlord honest in good times too.** When the building fills up, you don't suddenly get charged for the *additional* tenants' usage beyond your share.

The fight is over the **gross-up percentage**. Push for **95%, not 100%**. At 100%, the landlord grosses up costs for a fully-occupied scenario that may never happen, slightly overcharging you. At 95%, you get protection without overpaying. Also insist the gross-up applies **only to variable expenses** — fixed costs like taxes don't change with occupancy and shouldn't be grossed up at all.

```mermaid
flowchart TD
  A[Building at 60% occupancy] --> B{Gross-up clauseunder br/over in lease?}
  B -->|No| C[Variable costs spread overunder br/over only paying tenants]
  C --> D[Your CAM rate SPIKESunder br/over +$8K-15K/yr exposure]
  B -->|Yes - 95%| E[Costs calculated as ifunder br/over 95% occupied]
  E --> F[You pay only your trueunder br/over fixed pro-rata share]
  F --> G[Stable CAM regardlessunder br/over of vacancy]
```

## The Exclusions That Keep Vacant-Space Costs Out Entirely

![How Do I Avoid Paying for Vacant-Space Costs in CAM? — The Exclusions That Keep Vacant-Space Costs Out Entirely](https://image.pollinations.ai/prompt/high%20quality%20editorial%20business%20professional%20office%20photograph%20illustrating%20The%20Exclusions%20That%20Keep%20Vacant-Space%20Costs%20Out%20Entirely%20How%20Do%20I%20Avoid%20Paying%20f%2C%20realistic%20magazine%20style%2C%20warm%20light%2C%20no%20text%2C%20no%20watermark?width=1200&height=675&nologo=true&model=flux&seed=76058)


A gross-up handles variable operating costs. But landlords also try to recover the *direct costs of their vacancy* through CAM — and those should be **flatly excluded**. Get these struck from the operating-expense definition:

- **Leasing commissions and broker fees** for filling vacant space. That's the landlord's cost of doing business.
- **Tenant-improvement allowances and buildout costs** for *other* tenants. You're not paying to renovate a competitor's suite.
- **Marketing, advertising, and signage** to lease vacant space. Pure landlord expense.
- **Capital expenditures** — roof replacements, HVAC system replacements, structural work — unless amortized over useful life *and* only the portion required by law or that reduces operating costs. Even then, cap the annual amortized amount.
- **Costs reimbursed by insurance, warranties, or other tenants.** No double recovery.
- **The landlord's own corporate overhead, legal fees, and financing costs.**

A tenant-rep rule of thumb: if a cost exists *because* space is empty, it's the landlord's problem. The lease's operating-expense definition should be a **closed list of permitted costs**, not an open-ended "all costs of operating the building."

## Fix The Denominator: Total Rentable, Not Occupied

The gross-up protects the numerator (total costs). The **denominator** — what your costs get divided by — needs its own protection. Insist:

- Your pro-rata share is **your rentable SF divided by the building's TOTAL rentable SF**, expressed as a **fixed percentage** in the lease.
- The denominator is **never** "occupied square footage" or "leased square footage."
- If the building is expanded or reconfigured, your percentage is **recalculated transparently**, not adjusted at the landlord's discretion.

This pairs with the gross-up: total-rentable denominator plus a 95% gross-up means vacancy genuinely cannot inflate your bill.

```mermaid
flowchart LR
  A[Total building costs] --> B[Gross up variableunder br/over to 95% occupancy]
  B --> C[Subtract excluded items:under br/over commissions, TIs, capex, marketing]
  C --> D[Multiply by your FIXEDunder br/over pro-rata percentage]
  D --> E[Your true CAM billunder br/over vacancy-proof]
```

## Verify It Every Year With An Audit

None of this works if you can't check the math. Pair the gross-up and exclusions with an **annual audit right**:

- Demand the reconciliation show the **gross-up calculation explicitly** — the occupancy assumption used and the variable costs adjusted.
- Confirm **no excluded items** crept into the operating-expense pool.
- Use the **error-shift clause**: if the audit finds overcharges of **3–5%+**, the landlord pays for the audit. CAM audits commonly recover **5–10%** of billed amounts, with gross-up errors among the most frequent findings.

BOMA's expense standards give you a benchmark to spot a building billing well above market.

<!--pillar-weave-->
## Related on PULSE

- [How Do I Avoid Paying Double Brokerage Fees?](/knowledge/q13701)
- [How Do I Avoid Paying for the Landlord's Capital Improvements?](/knowledge/q13676)
- [How Do I Avoid the 'Controllable vs Uncontrollable' CAM Trap?](/knowledge/q13749)
- [How Do I Get Out of a Commercial Lease Early Without Paying a Fortune?](/knowledge/q13646)
- [NCAA compliance gotchas every HS family should know before paying a recruiting service in 2027](/knowledge/q11082)
- [How Do I Dispute a CAM True-Up Bill I Disagree With?](/knowledge/q13832)

## Negotiate a "Vacancy Factor" or "Load Factor" Adjustment

Beyond the gross-up clause, a **vacancy factor** (sometimes called a "load factor" or "vacancy credit") directly reduces the CAM costs you're billed for empty space. This provision states that the landlord must multiply variable CAM expenses by the building's actual occupancy percentage before allocating them to tenants. For example, if the building is 70% occupied, you'd only pay 70% of the variable CAM costs — the landlord absorbs the rest. Push for this language in your lease: "Variable operating expenses shall be multiplied by the actual occupancy percentage of the building (not to exceed 100%) before allocation." Some landlords resist, arguing they need full cost recovery, but you can counter that they benefit from higher rents when the building fills up. This clause is especially powerful in multi-tenant buildings where vacancy fluctuates — it can save you 5–20% annually on CAM charges, depending on vacancy levels.

## Use a "Base Year" or "Stop" That Excludes Vacancy Impact

Another effective strategy is structuring your **base year** or **expense stop** to exclude vacancy-related cost spikes. In a gross lease with an expense stop, you only pay operating costs above a certain threshold (e.g., $10/sq ft). Negotiate that the base year calculation uses **grossed-up expenses at 95% occupancy** — this prevents the landlord from setting a low base year when the building is empty, then charging you huge overages later when costs rise. For triple-net (NNN) leases, you can add a clause stating that CAM costs for the base year (or any comparison year) must be recalculated as if the building were 95% occupied. This locks in a fair baseline, so you're not penalized for the landlord's leasing failures. Landlords may push back on "hypothetical" calculations, but it's a standard commercial real estate practice — many national retailers and credit tenants demand it.

## Cap Your Year-Over-Year CAM Increase

A **CAM cap** (e.g., 3–5% annual increase) limits how much your total CAM charges can rise each year, regardless of vacancy changes. This doesn't directly address vacant-space costs, but it indirectly protects you: if the landlord tries to spread empty-space costs across fewer tenants, the cap prevents the per-square-foot charge from skyrocketing. Negotiate a hard cap on variable CAM (excluding taxes and insurance, which are harder to control) — aim for 3–4% in stable markets, 5% in volatile ones. Some landlords offer a "consumer price index (CPI) plus 2%" formula, which can exceed 5% in high-inflation years, so a fixed percentage is safer. Combine this with the gross-up clause for maximum protection: the gross-up stabilizes the base, and the cap limits annual escalation. This dual approach can reduce your total CAM exposure by 10–30% over a 5–10 year lease term.

## FAQ

**What exactly is a gross-up clause and how does it stop me from paying for vacant space?**  
A gross-up clause lets the landlord recalculate variable operating expenses—like utilities, janitorial, and management fees—as if the building were 95% or 100% occupied. This prevents you from being charged for costs that would normally be spread across empty suites, because the landlord artificially inflates the occupancy to allocate those costs only to occupied tenants.

**Can I negotiate a cap on how much my CAM costs can increase due to vacancy?**  
Yes, you can often negotiate a cap that limits annual CAM increases to a fixed percentage (commonly 3–5%) or ties them to the consumer price index. This protects you from sudden spikes when more space goes vacant and the landlord tries to recover those costs from fewer paying tenants.

**What other lease language should I look for to avoid paying for empty spaces?**  
Beyond a gross-up clause, request a “vacancy factor” or “vacancy credit” that explicitly excludes costs tied to unoccupied suites—such as their share of common area maintenance, property taxes, or insurance. Also ask for a “base year” or “stop” that locks in a fixed amount for CAM, so you’re only responsible for increases above that baseline.

**Does the type of property—office vs. retail—affect how vacant-space costs are handled?**  
Yes, it can. Office leases often use gross-up clauses to normalize expenses, while retail leases may rely more on “pro-rata share” calculations based on leasable square footage. In retail, you might also see “common area maintenance” defined narrowly to exclude costs tied to vacant anchor stores or outlots, so review the definitions carefully.

**If I’m in a multi-tenant building, can the landlord still charge me for vacant space if I have a gross-up clause?**  
A properly drafted gross-up clause should prevent that, but only if it’s written to cap variable expenses at the occupancy level you agree on (e.g., 95%). If the landlord uses a different gross-up method—like “actual occupancy” plus a percentage—you could still be charged for vacant space. Always have your attorney confirm the clause uses a fixed occupancy assumption.

**What happens if I don’t have a gross-up clause—can I still fight vacant-space charges?**  
You can try to negotiate a waiver or amendment mid-lease, but it’s harder once signed. Without the clause, your best leverage is to argue that the costs aren’t “reasonable and necessary” under your lease’s standard, or that the landlord hasn’t mitigated vacancy by marketing the space. However, most leases give the landlord broad discretion, so prevention is far easier than cure.

## Sources

- CBRE, "Operating Expense Pass-Throughs and the Gross-Up Provision" — occupier guidance.
- JLL, "Tenant Guide to CAM, Gross-Ups, and Vacancy Cost Allocation."
- Cushman & Wakefield, "Lease Audit Findings: Common Operating Expense Errors."
- BOMA International, "Operating Expense Accounting and Building Benchmarks."
- NAIOP, "Commercial Lease Operating Expense Structures and Exclusions."
- The Tenant Advisor / tenant-rep broker commentary on gross-up clauses and excluded costs.

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Kory White