Retail is becoming a standard on the bottom floor of apartment communities, and while the storefront looks like any other, there are key differences in how the operations expenses, like property taxes and insurance are charged for retailers in apartment communities versus shopping centers.

"Operating expenses in a multi-family project that are passed-through to the retailer should be dealt with differently than in a conventional shopping center because many of these expenses do not benefit the retail tenants," Gary Glick, a partner with Cox, Castle & Nicholson, tells GlobeSt.com. Glick says that there are two standard ways to properly cover operating expenses. One it is the pro rata share of all of the operating expenses for the multifamily project and the other is by reasonably allocating operating expenses attributed to the retail tenants.

In the pro-rata example, the retailer's share of the expenses would be in proportion to the retailer's leaseable space within the property. "This is probably not the best way to determine the retailer's pro rata share of operating expense because the retailer is paying a share of expenses relating to common areas for the residential tenants, but without the right to use that common area, including the parking for the residential units," says Glick.