Landlord Side CAM Audit Increases Cash FlowShare
A long-time institutional real estate client asked us to audit the recoverable operating expense schedules for a portfolio of office buildings that incur $30 million annually in recoverable expenses. We reviewed the properties’ lease agreements and worked closely with the property manager to be sure that all potential expenses were included for recovery purposes. More significantly, we analyzed the property manager’s assumptions and calculations in allocating and grossing-up the shared costs associated with the central HVAC plant, parking garage, restaurant facility and general property maintenance. AGH was able to provide our client with comfort that the property manager’s allocation and gross-up calculations were based on sound assumptions and in line with common industry practice, but more importantly, we were able to increase the properties’ cash flow by generating additional CAM revenue.
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