Who is really paying when your landlord gives amenities?

Guest Post by Sara Stanley, MCR, Managing Director at Commercial Tenant Services, Inc.

Landlords are in the business of leasing space for a profit. And while happy tenants and lease renewals make a landlord’s job easier (and more profitable), providing services and entertainment to a building roster of tenants increases costs.

From leasing and advertising fees to landlord entity expenses, a range of lease-excluded expenses hidden in larger operating expense pools is not uncommon. And those improper charges add up quickly to substantial sums.

Typical landlord amenities often included in operating expense billings:

• Tenant entertainment expenses

• Artwork in the lobby

• Fitness Center operating expenses such as cleaning, gym equipment leases, and even towel service

• Imputed Fitness Center rents

• Coffee bars & informal meet up spaces set up on a specific floor of the building

• Tenant “socials,” holiday events, other tenant treats

• Lobby conversions and updates

• Outside spaces – utilizing capital costs and operating expenses to repurpose those areas

These types of pass-throughs are seen often by third-party lease audit teams. What else is buried in your expenses? Let building-system experts grab their shovels and dig!