What is Pro-Rata Share?
A tenant's proportionate share of building operating expenses, calculated as their leased square footage divided by the total leasable area defined in the lease.
Definition
A tenant's pro-rata share is the fraction of total building operating expenses they are obligated to pay, calculated as their leased square footage divided by the total leasable area (or denominator as defined in the lease). This percentage determines how much of each recoverable expense category the tenant must reimburse. Incorrect denominator calculations — especially when vacancies are excluded, anchor tenants have separate arrangements, or new space is added mid-year — frequently produce over- or under-billing. Pro-rata share calculations must be recalculated whenever the denominator changes due to remeasurement, expansion, or BOMA standard updates.
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