Author: Portfolio Lease Administration & Advisory Team
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How A Lease Audit Can Boost Your Bottom Line
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Each year, commercial tenants collectively spend millions of dollars above and beyond their base rent in operating expenses. Unlike the rental rate that is negotiated and spelled out in the lease document, these operating expenses (OpEx) are subject to each property owner’s operating and accounting procedures. These charges are presented to tenants twice a year—in…
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Imagine trying to manage your leasing portfolio, with renewal and termination option notice dates, security deposit or letter of credit reduction dates, tenant improvement allowance use-by dates, insurance renewals, expansion & contraction options, base rent increases, and other critical dates in an excel spreadsheet, all while simultaneously juggling your other job functions? Maybe you don’t need to imagine—this could be…
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As businesses hunker down and look for ways to cut costs and improve their bottom line, one area that typically gets overlooked are the operating expense charges and common area maintenance (CAM) charges in commercial leases. These expenses are confusing for most, and therefore may seem like an overwhelming challenge to tackle. Nonetheless, this could be an area where significant…
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Companies scrambling to adopt to ASC 842 lease accounting changes are evaluating a variety of software and third party options to help comply with the new standards. Lease administration plays a critical role in the accounting compliance. While at its base lease administration is built on quality data management, proficient lease administration can do so much more by allowing a…
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Whether you are a tenant in an office, industrial or retail building, you are likely familiar with the CAM or operating expense charges passed on to you by your landlord. In a triple net lease, tenants are responsible for 100% of their proportionate share of these expenses on top of their rent. In a gross lease, tenants pay for their…
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Every year at this time, usually between March and June, landlords throughout the land present their tenants with the prior year’s Operating Expense Reconciliation. And while they take months to prepare these statements, the last thing they want is for the business owners and executives who receive them to spend time reviewing this all-important document. So what exactly is this…
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As today’s business leaders strive to stay ahead of the competition and grow their bottom line, the last thing they have is spare time to spend worrying about real estate lease obligations. This includes the burden that may be put on a finance department or a facilities team whose efforts are better utilized focusing on the work environment.
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When tenants enter into a lease, in addition to the base rent, they typically are required to pay for their share of building operating expenses. This is true whether your lease is structured as “full service,” “modified gross,” or “triple net.” The intent is that these expense charges will increase at an inflationary rate over the lease period. Unfortunately, the…
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The term “audit” carries many negative connotations. From the burden of a corporate audit to the unknowns of a tax audit, everyone wants to steer clear of an “audit.” Because of this, many businesses avoid entertaining the process of a lease audit, and are potentially leaving millions of dollars on the table by allowing their landlords to charge them expenses…
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You probably don’t give your monthly office rent statement much thought. After all, they should simply reflect the rent due under your lease, so common sense says you have better ways to spend your time than analyzing them down to the last detail. However, January is the month when landlords typically update their tenants’ share of operating expenses for the…
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At some point during your lease term, it is inevitable that your landlord will send a request asking you to execute an estoppel certificate. For most tenants, the request for an estoppel comes as a surprise as it is a legal document and the landlord is likely asking for a turnaround of 10 days. So what is an estoppel certificate?…
