A Capital Expenditure is cost incurred to replace, maintain, or improve fixed assets such as buildings, land, etc. Some examples include roof replacements, parking lot replacements, etc. that become an asset and are typically larger expenses and are typically depreciated over time. There are often two factors that differentiate a routine repair or maintenance expense from a capitalized expense and that is “lifespan” and “value”. It’s important to pay attention because often these items need to be budgeted for and in a lot of cases tenant leases do not allow for reserves or there are stipulations on a tenants’ contributions to capital expenses. We have more answers if you have more questions about commercial real estate.