Retail and Office Tenants Warned to Stop Throwing Money Away

EAST LONGMEADOW, Mass., June 2, 2015 /PRNewswire/ -- Many office and retail tenants oversee their real estate portfolios very informally without a designated lease administration department trained to review landlord invoices. In fact, they often just pay what is billed by the landlord without any review, basically throwing money away.

Retailers and office tenants with multiple real estate locations must put a process in place to safeguard critical lease information and review all landlord billings. The National Retail Tenants Association (NRTA) warns that a single mistake regarding operating expenses can be very costly to the tenant, often without them ever knowing it.

Moe Laliberte, co-founder of the education-based NRTA, cites a recent audit performed for an office tenant that found the landlord was billing for parking garage expenses that were not included per the lease. The dollar-for-dollar savings to the tenant was $150,000.

Another lease audit shared at a recent NRTA Annual Education Conference for lease administration professionals, illustrates the seriousness of overcharges. A retailer completed a real estate tax audit and found four additional parcels included in the landlord's original invoice that were not part of the leased property. Once excluded, the savings amounted to more than $220,000 for the four previous years. In addition, language was put in place to prevent this discrepancy from occurring in the future.

Lease auditing skills are only the tip of the iceberg for savvy retailers wanting to protect bottom line performance. Laliberte encourages his fellow retailers to review dates such as rent start, option renewals, and lease end dates, which are critical to the bottom line. Other key areas for consideration are co-tenancy clauses. How can co-tenancy be monitored in these days of fast entry/exit to and from the marketplace?

Serious lease management discipline helps retailers and other commercial tenants to leverage or capitalize on business trends while effectively negotiating favorable renewals and avoiding additional rent charges. About 500 real estate lease specialists will be joining Laliberte and a cadre of lease administration professionals to share best practices at NRTA's education forum, which will be held in Orlando this September.

SOURCE National Retail Tenants Association

Related Links

http://www.retailtenants.org