Fundamentals of the Desk Audit                    Presented by: Jerry KingLease Administration Masterclass          Friday...
Session Objectives     • Overview Elements of a CAM       Reconciliation     • Identifying Key Issues     • Spotting the e...
Getting Organized     •    Legal on board?     •    Lease review: abstracts, caps, fixed…etc.     •    Did you receive bac...
Our Basic Rules     • Lease determines what can or cannot be       charged back by the Landlord.     • Landlord is respons...
What we need to Check     •   Pro-Rata Share     •   Administration and Management Fees     •   Expenses     •   Capital I...
Tools of the Trade                 Leases, Invoices and Documents     • Reconciliation and supporting documents        – I...
Typical Questionable Expenses     •    Repairs/Maintenance     •    Off-site Labor     •    Security     •    Snow Removal...
Pro-Rata Share     • Most critical element of the CAM invoice.     • All leasable space, including major       department ...
Pro-Rata Share     • Formula: Premises/GLA=Pro-rata share     • GLA (area) vs. GLA (average)     • Area based on actual sq...
Lease Caps     • Prior to beginning audit, perform test on       Lease Caps to determine if complete       Reconciliation ...
Administrative Fee     • Charged by Landlords as compensation for off-       site management & other non-direct expenses. ...
CAM or NOT?     •   Promo / Advertising Fees     •   Pylon Signs     •   Bank Fees     •   Employee Incentives     •   Chr...
CAM or NOT?     •    Off Site Expense     •    Property Manager’s Car     •    Maintenance Vehicle / Golf Carts     •    S...
Contact Information                           Jerry King                                   • jking@rent-research.com      ...
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Rpcon masterclass s204-fundamentals-desk_audit - jerry king

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  • For many companies-occupancy cost is the 2nd largest expense-right after payroll ( Make this our first give away question).
  • Rpcon masterclass s204-fundamentals-desk_audit - jerry king

    1. 1. Fundamentals of the Desk Audit Presented by: Jerry KingLease Administration Masterclass Friday, 23rd March 2012
    2. 2. Session Objectives • Overview Elements of a CAM Reconciliation • Identifying Key Issues • Spotting the errors • Collecting Over PaymentsLease Administration Masterclass Friday, 23rd March 2012
    3. 3. Getting Organized • Legal on board? • Lease review: abstracts, caps, fixed…etc. • Did you receive back-up? Request it! • Prior years reconciliations. • Collecting your findings – Letter Writing • Tracking your savings.Lease Administration Masterclass Friday, 23rd March 2012
    4. 4. Our Basic Rules • Lease determines what can or cannot be charged back by the Landlord. • Landlord is responsible for providing reasonable documentation supporting expenses charged on reconciliations. • Expenses must be necessary and relate directly to common area operations.Lease Administration Masterclass Friday, 23rd March 2012
    5. 5. What we need to Check • Pro-Rata Share • Administration and Management Fees • Expenses • Capital Items? • Overhead Expenses • Offsite ExpenseLease Administration Masterclass Friday, 23rd March 2012
    6. 6. Tools of the Trade Leases, Invoices and Documents • Reconciliation and supporting documents – Itemized CAM Expense Listing • Depreciation schedules – GLA Schedules • Excluded Tenants sq.ft / sqm (Anchors/Majors, Outparcels, etc) – Real Estate Tax and Municipal Rates Charges – Insurance Charges NRTA | Focus 08-SolutionsLease Administration Masterclass for Success Friday, 23rd March 2012
    7. 7. Typical Questionable Expenses • Repairs/Maintenance • Off-site Labor • Security • Snow Removal (US) • Landscaping • Utilities • Trash / Grease Trap • InsuranceLease Administration Masterclass Friday, 23rd March 2012
    8. 8. Pro-Rata Share • Most critical element of the CAM invoice. • All leasable space, including major department stores and outparcels, are included in the pro-rata share unless specifically excluded in the Lease.Lease Administration Masterclass Friday, 23rd March 2012
    9. 9. Pro-Rata Share • Formula: Premises/GLA=Pro-rata share • GLA (area) vs. GLA (average) • Area based on actual square footage of all buildings regardless of occupancy • Average based on occupancy rates of all square footage of buildings • Kiosk – Storage Trailers - Other incomeLease Administration Masterclass Friday, 23rd March 2012
    10. 10. Lease Caps • Prior to beginning audit, perform test on Lease Caps to determine if complete Reconciliation is necessary. • Are there any exclusions from the Lease Cap calculation? • Is Cap based on prior year PAID or Cumulative Cap?Lease Administration Masterclass Friday, 23rd March 2012
    11. 11. Administrative Fee • Charged by Landlords as compensation for off- site management & other non-direct expenses. • Generally based on a % of expenses, but can be based on actual expenses or a flat fee. • If the Lease is silent with respect to an admin fee, an admin fee cannot be charged!Lease Administration Masterclass Friday, 23rd March 2012
    12. 12. CAM or NOT? • Promo / Advertising Fees • Pylon Signs • Bank Fees • Employee Incentives • Christmas Decorations • Vacant LandLease Administration Masterclass Friday, 23rd March 2012
    13. 13. CAM or NOT? • Off Site Expense • Property Manager’s Car • Maintenance Vehicle / Golf Carts • Seasonal Flowers • Promotional Events / Advertising • Security for Special Events • MuzakLease Administration Masterclass Friday, 23rd March 2012
    14. 14. Contact Information Jerry King • jking@rent-research.com • www.rent-research.com • Rent Research Consultants, Inc. PO Box 372 Swansea, MA 02777, USA • Phone 1-866-635-5762 • FAX 1-888-473-1121Lease Administration Masterclass Friday, 23rd March 2012

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