How would you calculate the utilities expense of a property that is 35,000 SF with a utility cost of $0.15/SF/Year and 35% fixed occupancy?

To determine the utilities expense for the property, the calculation begins with understanding the total utility cost based on the size of the property and the cost per square foot.

First, calculate the total utility cost without considering occupancy:

• Total square footage of the property is 35,000 SF.

• Utility cost is $0.15 per square foot per year.

The formula to find the total utility cost is:

Total Utility Cost = Total SF × Cost per SF

Total Utility Cost = 35,000 SF × $0.15/SF = $5,250.00

Next, since 35% of occupancy is fixed, this indicates that you will only be considering the expense incurred in relation to that fixed occupancy level.

To find the applicable utilities expense:

Applicable Utilities Expense = Total Utility Cost × Occupancy Rate

Applicable Utilities Expense = $5,250.00 × 35% (or 0.35)

Applicable Utilities Expense = $5,250.00 × 0.35 = $1,837.50

However, the answer provided is $4,567.50, which appears to suggest that the calculation may have misinterpreted the occupancy or possibly did not consider only the variable portion correctly,