Does the management fee charged in a NNN office lease include operating exp. and utilities?

I wanted to confirm whether it is typical to include the operating expenses and utility expenses as the total amount to apply the percentage charged for the management fee?
In Property Management - Asked by louie g. - Apr 23, 2015
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TANG F.
Broker/Agent
Dumfries, VA

Louie,
In a triple net "NNN" lease, a tenant pays all expenses, including property taxes, insurance, maintenance, and utilities, leaving the owner with no expenses associated with the property. It makes sense for the owner to include management fees and utilities expenses under "operating expenses", and disclose that to the tenant in writing. Most tenants will refuse paying extra for management and utilities charge in a NNN lease. See VIKING BANK v. FIRGROVE COMMONS, LLC
I hope this helps.

Apr 24, 2015
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Stephen B.
Broker/Agent
Lewisville, TX

If I'm reading your question correctly, you're asking whether or not the mathematical calculation of the management fee is based on the base rent only, or the base rent plus the NNN charges as well. It's been my experience that the management fee is based only on the base rent. The owner's charge for management fees will be included in the NNN charges, but the source of that fee should, in my experience, be the management fee percentage times the monthly base rent.

May 7, 2015
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