Need advice on commercial property Utilties.
Hello BP community,
I need some advice on handling escalating utility bills. My previous office manager really let things slide on my 30k sqft office complex. We have 60 tenants with 6 in lease. Thats right, the office manager had not renewed leases in the past few years. Our leases were a gross lease with utilities included. This has become a problem. It's time to write up new leases and I'm unsure on how to handle utilities.
Electric, gas, water and trash cost me ~80k a year. I'd like to move to a modified gross lease with tenants paying utilities. The problem is most units share electric meters. The water and gas meters are one per building. We have 25+ electric meters which include meters for community lighting and AC.
What are some methods to divide up the Utility costs?
- Add sub meters for each unit. I'm not sure this would work as our electric meters are on a rate schedule that I do not believe can be legally submetered.
- Take the previous years utility costs from all the meters and charge it by sqft. At the end of the year charge/refund the difference in the actual charges.
- Use the previous method but break out utilities for the units on each shared meter instead of the total cost for all meters.
- Break up each bill as it arrives. and divide it by units on the meter This would add a lot of overhead to the work load.