Full Service Gross Lease

FSG

FSG leases include all operating expenses in one rent payment. Learn base year stops, gross-up provisions, and key red flags for office tenants.

By Angel Campa, Founder · Updated March 2026

Overview

A Full Service Gross (FSG) lease requires the tenant to pay a single all-inclusive gross rent, and the landlord is responsible for all operating expenses including taxes, insurance, utilities, janitorial, and maintenance. FSG leases are standard in Class A and Class B office buildings. The landlord's exposure to rising costs is typically mitigated by a base year expense stop that passes increases to tenants over time.

Expense Breakdown

Tenant Pays

  • •Base gross rent (all-inclusive)
  • •Operating expense increases above base year expense stop (after year one)
  • •Above-standard janitorial or after-hours HVAC (if separately metered)

Landlord Pays

  • •Property taxes
  • •Building insurance
  • •Common area maintenance
  • •Utilities (electric, water, gas for base building)
  • •HVAC maintenance and replacement
  • •Janitorial services
  • •Landscaping
  • •Security
  • •Roof and structural maintenance
  • •Elevator maintenance

Typical Profile

Typical Industries

Class A OfficeClass B OfficeMedical OfficeGovernment

Typical Term Length

5–10 years

Pros & Cons

For Tenant

Pros

  • +Maximum cost certainty — one rent payment covers all operating expenses
  • +Simplest structure to budget and forecast
  • +No exposure to unpredictable maintenance or capital costs
  • +Landlord incentivized to maintain the building well to control their own costs

Cons

  • −Base rent is higher than NNN or net lease structures
  • −Expense stop pass-throughs can increase costs significantly after year one
  • −Less visibility into actual building operating costs
  • −Base year selection matters — a low-expense base year benefits landlord in out-years

For Landlord

Pros

  • +Attractive to a broad tenant market who want simplicity
  • +Base year expense stop protects against long-term cost inflation
  • +Gross up provision ensures costs are fairly allocated in multi-tenant buildings
  • +Ability to bundle services creates operating efficiencies at scale

Cons

  • −Bears full risk of unexpected cost increases in year one
  • −Complex to administer — must track and reconcile expenses for each tenant's base year
  • −High building operating costs reduce effective net income
  • −Rising utility or insurance costs can compress margins if base year is poorly set

Critical Fields to Abstract

These are the highest-priority fields Lextract extracts from FSG leases. Click any field to learn what it means and why it matters.

Base RentRent Commencement DateLease Expiration DateCam Cap Base YearOperating ExpensesCam ChargesTenant Improvement AllowanceRenewal OptionsTermination OptionsPermitted Use

Common Red Flags

Lextract automatically detects these red flags in FSG leases. Click any flag to learn the impact and what to do.

No Gross Up ProvisionMissing Audit RightsNo Base Year Gross UpNo Cam CapExcessive Management Fee

Compare With

Modified Gross Lease

View expense breakdown and red flags →

Gross Lease

View expense breakdown and red flags →

Nnn Lease

View expense breakdown and red flags →

Double Net Lease

View expense breakdown and red flags →

Frequently Asked Questions

What is included in a full service gross lease?

A full service gross lease includes all building operating expenses in the base rent: property taxes, insurance, maintenance, janitorial, utilities, HVAC, and security. The tenant pays one monthly rent with no additional pass-throughs in year one. After the base year, operating expense increases above the expense stop are allocated to tenants proportionally.

What is an expense stop in a full service gross lease?

An expense stop is the per-square-foot amount of operating expenses included in the base rent. Once actual expenses exceed the expense stop, the excess is passed through to tenants. The expense stop is usually set at the actual expense level of the base year, meaning tenants absorb all increases after the first year.

Why does the base year gross-up matter in a FSG lease?

If a building is partially occupied in the base year, actual expenses will be artificially low because some variable costs (janitorial, utilities) scale with occupancy. Without a gross-up clause, tenants get a low expense stop — meaning they absorb almost all future costs as the building fills. A gross-up provision adjusts the base year to what expenses would have been at full occupancy, protecting tenants.

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