Definition: The term "Gross-Up" usually applies to Fully Serviced Leases (sometimes also called "full service leases). In fully serviced leases the tenant pays fixed amounts for certain services on top of a rent for the actual space leased. For example, the landlord pays for common area maintenance (CAM) expenses. The landlord then divides this fee by the number of gross square feet in a building and charges each tenant an amount based on the percent of square feet the tenant occupies.
Gross-Up means if the building is less than 90-95% occupied, the expenses are still calculated for the tenants pro-rated share of operating expenses.
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