NNNs and Common Area Maintenance - Shopping Center Management
Is there such a thing as market NNNs?  I would imagine not, as every property is maintained differently.  But I could be wrong.  I’ve checked Costar but info on there on any retail properties is limited.  Thoughts?

I also had a question regarding capex items.  If a tenant’s lease allows for capex (roof replacement, exterior facelift, parking lot slurrying etc) to be included in CAMs, what is the best way to pass this through?  If amortized, can you provide an example of how exactly it would be done?

Another question I had is, how do LLs typically handle a steep increase in NNNs due to an increase in taxes based on resale value of the property?

And finally, how are suite specific costs (such as white-boxing) get booked?  Obviously not passed through to existing tenants and obviously not yet to the new tenant as it needs to be tour ready.  Can’t figure out how to allocate these expenses.

I’ve been on the leasing side of the retail sector, and just now getting into PM, so forgive me if my questions seem too obvious 😊
[{"id": "goppw5b", "text": "Is there such a thing as market NNNs? **In my experience, the short and simple answer is no. NNN's are market and property specific.**\n\nIf a tenant\u2019s lease allows for capex (roof replacement, exterior facelift, parking lot slurrying etc) to be included in CAMs, what is the best way to pass this through? If amortized, can you provide an example of how exactly it would be done? I don't deal with this type of scenario too often. **As a tenant, I would be pissed if my attorney/advisor let this go in the lease. At worst, the lease should provide an amortization schedule or some other specifics on how the cost is passed on (for instance, only the tenants pro rata share). Best case for the owner would be amortize over a straight line schedule until the end of the lease term. Realistically you determine useful life of the cap x item and straight line it over that period.**\n\nAnother question I had is, how do LLs typically handle a steep increase in NNNs due to an increase in taxes based on resale value of the property? **I deal with this a lot. When purchasing, you should assume you'll get hit soon with a tax increase. Those increases can be tough to pass along to tenants immediately on the year it hits. You should therefore factor this into your underwriting and offer price. In real time, when taxes go up substantially we usually offer payment plans to tenants.**\n\nAnd finally, how are suite specific costs (such as white-boxing) get booked? Obviously not passed through to existing tenants and obviously not yet to the new tenant as it needs to be tour ready. Can\u2019t figure out how to allocate these expenses.  **Cap X. Ideally you have reserves or a capacity to draw from for these types of costs.**", "replies": [{"id": "gos28ae", "text": "If I could pass through CAPEX, my buildings would be the shiniest in town! Instead, my tenants audit CAM and protest that necessary maintenance on end of life systems is CAPEX...sigh.", "replies": [], "depth": 2}], "depth": 1}]