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  • Writer's pictureRaphael Collazo

What is a Modified Gross Lease?

A modified gross lease in real estate is a type of commercial lease in which the tenant is responsible for paying a base rent, as well as a share of certain operating expenses related to the property. These operating expenses may include things like property taxes, insurance, utilities, and maintenance.

In a modified gross lease, the landlord and tenant typically agree on the base rent and the tenant's share of the operating expenses upfront, and these expenses are typically included in the tenant's monthly rent payments. The tenant's share of the operating expenses is usually a fixed percentage of the total expenses, or it may be based on the tenant's square footage or other factors.

Modified gross leases are a common type of lease for commercial properties, as they allow both the landlord and the tenant to share in the operating costs of the property. They can be a good option for tenants who want the flexibility to customize their space and control their own operating expenses, while still having the landlord manage certain aspects of the property. It's important for tenants to carefully review the terms of a modified gross lease and understand their responsibilities for paying operating expenses before signing the lease.

I've worked with many tenants to help them identify, negotiate and secure a commercial space that best aligns with the needs of their business. If you're a business owner in Louisville, KY or its surrounding areas, I'd be happy to help you find the perfect space for you and your business! Feel free to call/text me at (502) 536-7315 or email me at

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