It is interesting that the so many brokers representing commercial tenants do not have in-house lease auditors or relationships with lease auditors. We should be best friends!!!
It is in the best interest of any tenant thinking about extending their Lease to initiate an audit of the additional rent currently being charged for the space. Not only the Common Area Costs, but the property tax allocations, and any other significant contributions – for example promotion or advertisement fund payments. Not only would this be a great added value service, but anything that was found could be used as leverage in the renewal negotiations.
Often times discussions with a tenant may reveal for example – the current $5 psf charge for Promotion seems excessive since the tenant:
- Is not aware of any promotion it currently receives; or
- The mall had significantly reduced the decorations and activities provided last holiday season.
Or perhaps there is an allocation for an elevator maintenance contract buried in the CAM charge, but the Tenant had specifically negotiated out any charges associated with the 2nd floor – ie. elevator maintenance should not be charged!
Having someone like us who really understands how to read every part of a lease and decipher year end billings to narrow in on the important areas where leverage could be created during upcoming lease renewal negotiations is key. We work in conjunction with the Realtor to ensure the best deal is achieved for the client!
We can be your expert!
Make Jensen Consulting part of your team today.