Effective House Rent Billing Format for Operations to Streamline Your Workflow

House rent billing format for Operations

DISCLAIMER: The following video is intended as an introductory educational video for building owners and brokers to better understand the rate structure for offers for government leased space and does not address all elements of a lease procurement. For more comprehensive information, refer to GSA’s leasing desk guide, the request for lease proposals package, and lease documents for the project you are interested in pursuing. Let’s take a look at how to develop the base operating rent component of the fully serviced rental rate for your GSA offer. Lease Type: GSA typically enters into fully serviced or gross leases. Under these types of contracts, operating items such as utilities and janitorial services are included within one easy, tenant-friendly operating rent payment. Let’s take a closer look on how to calculate your operating costs: Worksheet/Calculation: The GSA Form 1217 “Lessor’s Annual Cost Statement” is a worksheet that assists offerors in calculating base operating rent by estimating all of the annual costs of utilities and services that contribute to the operating rent. The Government expects to pay its share of the overall building operating costs based on the share of the space we occupy. As such, the first step when using this worksheet is to determine the first year’s operating costs for the whole building. Next, offerors will allocate the total costs by the amount of the space the Government will occupy in order to determine the applicable costs for the Government’s requirement. Please note that while not all lease procurements will require you to fill out a Form 1217, you will still be required to identify your operating expenses. Inclusions: When determining the costs to be included in the base operating rent, offerors are expected to include the following categories: * Janitorial Services including restroom supplies * All utilities including heating, cooling, electric and water * Building systems’ maintenance expenses * Building management salaries, landscaping and building security. Exclusions: Be certain to distinguish between capital improvements and operating maintenance when pricing your base operating rent. For example, the anticipated replacement of your HVAC system is a capital expense and should be accounted for in your reserves for replacement which should be priced in your shell, whereas routine maintenance of your HVAC unit would be covered in your operating rent. Please also remember that building costs such as Real Estate Taxes, Insurance, Building Shell maintenance and reserves, commissions and management fees should all be included in the shell rental costs, and not in the operating rent. Additionally, security improvements, tenant improvements, and parking will be paid through separate rental components. Operating Cost Adjustments: It’s important to know that the base operating rent offered should reflect your expected costs in Year 1 of the lease as future costs are covered through annual operating cost adjustments. The Government protects Landlords against inflating costs by adjusting the operating costs each year in ance with the Consumer Price Index. For more information on the base operating rent, please refer to the section of the lease titled UTILITIES, SERVICES, AND OBLIGATIONS DURING THE LEASE TERM. For information on specific requirements, reach out to your regional GSA representatives. To explore other rate components, check out the other videos in this series.