Lease Auditing can be a tough business. It takes knowledge of real estate and accounting. It takes a keen understanding and respect for the tenant-landlord relationship. And when done right it cuts real estate and facilities costs dramatically. A Pacific Bell company that is now part of AT&T was looking for ways to reduce costs and catch excess expenses in their lease portfolio. TMC, with years of lease experience, dug down with our client to find opportunities.
We found and recovered $210,000 in their HQ lease at Rincon Center in San Francisco, at a time when the economy was challenging. It was part of a program where we reduced our client’s occupancy costs by 43% over several years.
As part of our transaction service TMC provides yearly lease audits for our clients at no charge. In the case of the Pacific Bell tenancy we found that the landlord had rounded up our client’s pro rata share of the building from 36.6% to 37%. Accounts Payable thought that to be a standard for passing through operating expenses. Rounding up is typical in many expense processes. But rounding up a tenant’s occupancy percentage is not a standard. We challenged the charge with the landlord as part of our overall audit.
Challenging and recovering from a landlord a 3-year overcharge of $70,000/year is a delicate business.
Yet knowing that sensitivity and treating the relationship with respect is a standard for TMC. We explained and effectively argued the overcharge. Our appeal was successful, and we improved our client’s earnings by the amount of the savings.
TMC focuses much of their attention on cost effectiveness. Whether it’s lease renegotiations, audits, restoration renegotiation, or deposit recoveries, we help our client’s bottom line. For more opportunities to reduce costs in a tough economy, contact us.