I’m underwriting a mixed use development with office over retail. I’ve been told retail tenants will likely not pay their pro rata share of the CAMs for the entire building, but wanted to ask the forum how to best think through what building recoverable expenses CAN be assigned to the retail tenants, and in what proportion. Think taxes, contract services, insurance, utilities (submetered electric) etc...
If retail is 10% of the building’s NRA (assume office is 90%), then are there expense types where retail is likely NOT paying 10% of said expenses due to disproportionate benefit going to the office users etc? Thanks
For record my office opex is around 18-18.50 psf and am told retail should be around 14.
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