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THE RUNDOWN

Do you know your opex?

Opex is the jargon for operating expenses- the out-of-pocket costs for running a space, maintaining it, and keeping it legal.

What's included?

Many of the costs that are passed to unit owners or to the HOA in a multifamily building are shared between lease-holders and landlord in a commercial property. These include:

Property taxes

Property insurance

Management/administration fees

Common area maintenance (CAM), not including capital improvements

Utilities, such as HVAC and electricity

Contracted services, such as janitorial and security

Supply costs

The following are not opex. They are the entire responsibility of the landlord or management company:

Advertising and marketing costs

Fees associated with refinancing the property.

Consultant fees and market study fees.

Tenant improvements, which are negotiated individually with each tenant and are not always the landlord's responsibility to pay.

Capital improvements/structural repairs. Although they are common area maintenance, but typically require prior approval from tenants, since they can be major additional expenses.

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