A modified gross lease is a commercial lease in which the tenant pays a fixed base rent on a monthly or annual basis, but also agrees to pay a proportional amount of the operating expenses for the property, such as:

• taxes

• property insurance

• utilities

• maintenance and repairs (including structures such as the roof), systems (heating, ventilation, and air conditioning and electrical)

• common area maintenance (CAM) such as maintenance of the parking lot, landscaping, maintenance staff, security staff, and maintenance of elevators and escalators.

There are many variations of modified gross leases, with different expenses reimbursed by the tenant to the landlord, and different methods of calculating the tenant’s proportionate share of the expenses.

In Alaska, a modified gross lease is a type of commercial lease agreement where the tenant pays a set base rent plus a share of the property's operating expenses. These expenses can include property taxes, insurance, utilities, maintenance and repairs of structures and systems, and common area maintenance (CAM) costs. The specific terms of a modified gross lease can vary significantly, with tenants sometimes responsible for different combinations of these expenses. The method for calculating the tenant's share of these costs is also subject to variation and should be clearly outlined in the lease agreement. It's important for both landlords and tenants to carefully negotiate and understand the terms of a modified gross lease to ensure clarity on financial responsibilities. As with any contract, it is advisable for parties entering into a modified gross lease in Alaska to consult with an attorney to ensure the lease complies with state statutes and to fully understand their rights and obligations under the lease.