What type of buildings are modified gross leases often associated with?

Modified gross leases are often associated with multi-tenant industrial buildings and single-story office properties because these types of buildings generally feature simplified arrangements for lease agreements. In a modified gross lease, the tenant pays a base rent plus certain operating expenses, which can include utilities, janitorial services, and maintenance, but the terms can vary based on the specifics agreed upon between the landlord and tenant. This type of lease is suitable for smaller buildings or spaces where the landlord and tenant can negotiate specific shared expenses without the complexity associated with larger properties.

Multi-tenant industrial buildings and single-story office properties often have predictable operating costs that can be easily divided among tenants, making it practical to implement modified gross leases. In these types of properties, there is typically a balance between costs that the landlord bears and those that the tenant assumes, providing clarity and convenience for both parties. This flexibility can attract tenants who prefer this balanced approach in managing lease-related expenses.