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!

Sara Stanley, MCR, is Managing Director at Commercial Tenant Services, Inc.