March 3, 2017
Increases in property taxes, along with higher operating costs, are being passed along to office tenants occupying space in downtown Austin. Specifically, since 2011, operating costs, or OPEX, jumped from $13.14 per square foot to $20.33 per square foot for seven CBD buildings, according to data from Cushman & Wakefield.
Cushman & Wakefield believes operating costs will continue into the foreseeable future, as commercial tax rates are not limited by caps. As property values increase, taxes will increase, and so will rents, leading Cushman & Wakefield Executive Director Ryan Kasten to suggest that tenants negotiate better terms with OPEX in mind before signing.
“It’s critical for tenants to carefully review the lease terms and negotiate controllable expense caps, which could offset higher OPEX later,” Kasten told the Austin Business Journal.
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