What is OpEx?

A large warehouse with the words " what is opex ?" written in front of it.

In a NNN (triple net) lease, OpEx is a pass through of operating expenses to the tenant and is paid on a per sq. ft. basis.

OpEx covers property taxes, property insurance, and CAM (common area maintenance) expenses. These fees are passed through to the tenant separately from their base rent and are paid on a monthly basis.

An example of OpEx:
$4.00 psf NNN (base rent)
$1.00 OpEx (taxes. insurance, CAM)
= $5.00 per sq. ft. total lease rate

Also, the OpEx can change each year as taxes and insurance premiums increase or decrease. Typically, a landlord will forecast the expenses and, at the end of a year, would have a reconciliation to account for any expense changes.

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