Amount Saved: $425,000+
Recovery Type: CAM/Operating Expenses; Lease Audit
Client Use: Retail
Overview:
During a lease audit for a national retail client, National Lease Advisors (NLA) uncovered a major billing error. The landlord had included CAM charges in both the 2024 reconciliation and the 2025 budget, despite the lease being structured as gross plus utilities only. This misapplication resulted in significant overcharges that would have continued throughout the remaining lease term.
Challenge:
The client operated under a gross lease, which stipulates that the landlord is responsible for all operating expenses, with the tenant only covering utilities. However, the landlord had improperly billed the tenant for CAM charges—charges typically found in NNN leases. These charges appeared in both the prior year’s reconciliation and the forward-looking budget and would have totaled hundreds of thousands of dollars over time.
Solution:
NLA’s team conducted a detailed lease audit as part of its ongoing lease administration services. Upon discovering the discrepancy, the team took swift action:
- Lease Review: Analyzed the lease agreement and reconciliations to confirm that CAM charges were not permitted.
- Landlord Engagement: Presented findings and supporting documentation to the landlord to dispute the charges.
- Charge Correction: Successfully removed all CAM charges from both the 2024 reconciliation and 2025 budget.
- Future Protection: Ensured that CAM would not be charged going forward, locking in long-term savings for the client.
Results:
- Immediate 2024 Savings: $34,518.65
- 2025 Budget Savings: $35,544
- Ongoing Monthly CAM Savings: $2,962/month over 96 months = $284,352
Total Savings: $354,414.65 (with additional value in avoided overcharges and billing consistency)
This outcome highlights the importance of expert lease audits and the value of active lease administration. By identifying and correcting the billing error, NLA protected the client from long-term financial exposure and delivered meaningful savings.