Eight Operating Cost Rent Issues for Restaurant Tenants

Restaurant tenants are rarely happy with their operating costs; at best, they’re ambivalent to them and, at worst, they’re upset with them. The two issues that most upset restaurant tenants are ever-increasing operating costs and the landlord’s lack of attention to fully maintaining the commercial property. Restaurant tenants can, of course, request a limit on the amount that operating costs can be annually increased, but landlords resist this because these are supposedly true costs passed onto the tenant and not normally a profit center for the landlord. Restaurant tenants should also watch out for other issues buried within operating cost clauses that can cost them dearly. We have detailed these in our book, Negotiating Commercial Leases & Renewals FOR DUMMIES, and summarized them below: 

Administration Fees: If restaurant tenants are paying the property manager’s salary through operating costs, but the landlord adds a 15% administration fee to CAM costs, this can be…