Looking to lease a commercial space, real estate agents says I have to pay increase in property taxes on top of monthly lease price.
So, I live in NyC. I’m trying to lease a warehouse, and I found a good spot.

Now when submitting my offer, the real estate agent is saying we have to add to the proposal that I am willing to pay any increase over the base real estate property taxes over the course of my lease.

Is this something standard? Or should I not agree to these terms, and just say the owner Pays for his own taxes. 

Please let me know what y’all think

 Thank you
[{"id": "hvh2jbu", "text": "https://www.investopedia.com/terms/t/triple-net-lease-nnn.asp\n\nIf it\u2019s triple net I\u2019d expect my tenant to cover a tax increase. \n\nUltimately it\u2019s usually hand in hand with what you submitted already, which sounds like a triple net + assessments delta. \n\nSometimes owners will pony up year1 and then every year after tenant pays the difference from base set in year1.\n\nAlso confirm the square footage related to property assessment - aka paying 50% of a bill with a 25% footprint.", "replies": [], "depth": 1}, {"id": "hvh2xm8", "text": "I'd expect a warehouse to be triple net. You're responsible for your proportionate share of property taxes, insurance, and common area maintenance.", "replies": [{"id": "hvhmpcv", "text": "Many landlords in NY have gross leases where many of the costs are factored into the base rent with the exception of utilities. Similar to office leases.", "replies": [{"id": "hvhq376", "text": "That is very rare, I've seen a lot of office space and the leases are triple net from the big management companies.", "replies": [], "depth": 3}, {"id": "hvirivj", "text": "Why did this get down voted?  It's an accurate statement.", "replies": [{"id": "hvivuus", "text": "Lol I don\u2019t know. I\u2019ve been a broker in NYC and Long Island for 25 years. To Op question I\u2019ve never met a landlord that didn\u2019t pass the tax increase to the tenant. It\u2019s an unknown variable where you can\u2019t just use a 3% increase.  I have seen many landlords include base tax in the lease and increase rent 3-5% annually including the tax and in addition bill for proportionate share of tax increase effectively double dipping on the taxes. To my last point there\u2019s so many variables regarding landlords, management companies, buildings systems that there is no real standard on how leases are structured for any asset class. As a broker that\u2019s how you add value to a tenant being able to do a proper lease analysis in comparing different spaces but also knowing what business points are negotiable. \n\nOP - not sure if your working with a broker but if you\u2019re not you should really consider finding one. Commercial leases are different then renting an apartment in the East Village where there\u2019s really nothing to negotiate it\u2019s usually take it or leave it. With commercial space your typically dealing with shrewd landlords and if your not familiar with what\u2019s customary and what\u2019s negotiable good chance you\u2019re going to over pay or end up with a lease terms that could hurt you down the line. Example restrictive sublease clauses, personal guarantees etc. When you find a great space and your focused on getting a deal done and getting in you may neglect to consider exit strategy in the event it doesn\u2019t work out and you want to get out of the lease.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hvh334n", "text": "You will be able to appeal the property tax assessments if youre the one paying.\n\nEdit: should be the one. Would be shitty not to able to control that aspect of it although that would be possible", "replies": [{"id": "hvhc3ja", "text": "The lease will determine who is able to appeal the property tax assessments. It is not necessarily the one paying.", "replies": [{"id": "hvhmz41", "text": "\ud83d\udcaf", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hvh7bdl", "text": "Very typical for taxes, insurance and common area maintenance to be paid by Tennant.  It\u2019s also very negotiable that none of these are paid by the tennant.  You have to ask and look around.", "replies": [], "depth": 1}, {"id": "hvhbhee", "text": "There is a very simple answer to \"Is this something standard?\"  \n\n\nYes.", "replies": [], "depth": 1}, {"id": "hvhcfpm", "text": "Standard.", "replies": [], "depth": 1}, {"id": "hvhehga", "text": "Extremely common in commercial leases.", "replies": [], "depth": 1}, {"id": "hvhm3hp", "text": "Yes in addition to annual rent increases.", "replies": [], "depth": 1}, {"id": "hvhmmqu", "text": "Normal NNN lease terms yes", "replies": [{"id": "hvi8mal", "text": "This isn\u2019t NNN. This is a base year lease structure. \n\n\u201c any **increase over the base** real estate property taxes over the course of my lease.\u201d", "replies": [{"id": "hvifmhf", "text": "Yes. A base year increase. Very standard in a modified gross lease.", "replies": [{"id": "hvihp7u", "text": "I know it may be a regional thing or an asset type thing but when I hear \u201cfull service\u201d I assume there are no expense reimbursements due from the tenant, but the base rent will obviously be much higher", "replies": [{"id": "hvihw74", "text": "Didn't mean to say full service actually. Good catch.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "hvimqlj", "text": "In our market, we call this a \u201cmodified gross\u201d lease, although it\u2019s usually increases above an \u201cexpense stop\u201d for not only taxes, but also insurance and CAM.", "replies": [{"id": "hvio1fg", "text": "Yea, I\u2019ve also seen modified gross leases that have stops or even straight pass throughs of certain expenses to the tenant and non reimbursements of other expenses. Either way, what OP is describing is in no way a NNN lease by any measure but a bunch of people are saying it is which is a little unsettling considering they\u2019re trying to give advice.", "replies": [{"id": "hvip8nw", "text": "I completely agree with you. What OP is describing is not a NNN lease.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hvhonea", "text": "Yes, it's a NNN lease.  Most commercial leases the Tenant is responsible for the Base Rent ($/sqft) then NNN costs (property tax, insurance, common area fee).", "replies": [], "depth": 1}, {"id": "hvhr0ts", "text": "Standard if it\u2019s triple net as others have said. However, please have an experienced attorney review your lease or license agreement before you sign. A proposal or LOI isn\u2019t a final commitment.", "replies": [], "depth": 1}, {"id": "hvhslwf", "text": "This is called a tax stop and is very common.", "replies": [], "depth": 1}, {"id": "hvhsp39", "text": "Very typical", "replies": [], "depth": 1}, {"id": "hvhswia", "text": "Welcome to commercial real estate. Landlords make all the rules, and those rules generally minimize their risk", "replies": [], "depth": 1}, {"id": "hvht9d5", "text": "It's a modified gross lease. You pay your share of any increase in taxes above the base year. Base year is baked in. Pretty standard. Nice it's not a net lease where you just pay the full tax bill.", "replies": [], "depth": 1}, {"id": "hvhtbys", "text": "Send me your lease. I\u2019ll give you a summary since it doesn\u2019t sound like you have a broker.", "replies": [], "depth": 1}, {"id": "hvi0ghf", "text": "Standard. Even in a retail space of a residential building you\u2019ll see commercial tenants paying their share of real estate taxes.", "replies": [], "depth": 1}, {"id": "hvi7vwm", "text": "It's always relative to what is customary in your market.  You never know what terms are better or worse unless you compare at least several other comparable property lease structures. If most all leases are structured similarly with base year escalators for taxes, CAM, etc. then you know your answer.  \n\nIn very competitive markets you will typically have similar leasing costs for comparable space.  The expense allocations are simply spread out different on how the lease is set up as a variety of net or gross lease terms.  So if you are paying a lower base rent for a net lease compared to a modified gross or gross lease it looks cheaper on the surface.  But the missing component expenses that are not part of the base rent are paid by the tenant out of their pocket rather than directly to the landlord in the form of a gross rent payment.  \n\nThe same goes for escalators as annualized or stepped rents. You have to do your own appraisal (or get a good broker or appraiser to help you) to figure out what is equivalent or not.", "replies": [], "depth": 1}, {"id": "hvi8ygy", "text": "I\u2019m amazed at people saying this is a standard NNN lease. If it was NNN they would be paying their pro rata share of the RE taxes but OP states it\u2019s the increase over the base RE taxes which is a base year gross lease structure.\n\nBut to answer OPs question, yes it is very common. You probably won\u2019t be able to add a cap either since it\u2019s a non-controllable expense.", "replies": [{"id": "hvjyvbb", "text": "Yup. furthest thing from a nnn lease.", "replies": [], "depth": 2}], "depth": 1}, {"id": "hvifvvj", "text": "Good for you finding warehouse space in the city!  I ended up moving my business to NJ.", "replies": [], "depth": 1}, {"id": "hviiq89", "text": "Yes, NNN contracts are common on anything that is not residential.", "replies": [], "depth": 1}, {"id": "hvireo0", "text": "It's called triple net.  It essentially covers the costs of doing business (taxes, landscaping and a 100 other things) that the landlord can't foresee exact costs on going forward.\n\nBecause none of these people (the tax agency, the landscaper, etc.) have told him what their fees will be in year 2, 3, 4, 5 and so on.\n\nWelcome to the adult end of the pool.\n\n(Yes).", "replies": [], "depth": 1}, {"id": "hvjlypv", "text": "Yes you do", "replies": [], "depth": 1}, {"id": "hvko3p2", "text": "If the taxes go up, you pay your fair share. If they increase, so do yours increase.", "replies": [], "depth": 1}, {"id": "hvktsyj", "text": "this is standard", "replies": [], "depth": 1}, {"id": "hvnpbs8", "text": "Yes. Industrial is usually triple\nNet but this sounds like a modified gross structure using a \u201cbase year\u201d for taxes. Taxes are almost always passed through to the tenant as well as insurance and CAM (common area maintenance). You can usually negotiate a cap on controllable expenses but never on uncontrollables, like taxes.", "replies": [], "depth": 1}]