Lease Audit

PINNACLE’s lease consulting group specializes in understanding the financial and accounting impact of commercial leases. Our team possesses a unique combination of having worked both sides of a lease for both landlords, as well as retail and office tenants. Our unparalleled experience and attention to detail will allow your company the necessary resources to maximize your recovery opportunities.

Our lease advisory team has worked with a wide range of corporate tenants, from local retailers to corporate real estate groups of Fortune 100 companies. Our services are focused on providing you the expertise and resources needed to monitor your real estate related costs over your entire lease term and provide you real cost savings.

Lease Audit Overview

PINNACLE’s Lease Audit Service is a thorough review of your lease cost, comprised of building operating expenses, taxes & utilities charged by your landlord.

The cost of leasing space for a corporate office is comprised of two components – the base rent and the proportionate share of operating expenses (including property taxes) for an office. Base rent usually is stated as a fixed amount in a lease agreement. 

Operating expenses (common area maintenance, or CAM) also are defined in lease documents, but can vary from year to year due to changes in utility expenses, vacancy, service contracts, capital expenditures, property management and ownership. 

Leases contain specific exclusions to certain operating expenses that should not be passed through by the landlord. A lease audit should be conducted to verify whether expenses have been assessed accurately, based on negotiated lease provisions. 

The lease agreement will outline the process for conducting a lease audit and the specific windows during which to notify the landlord and conduct the audit. The clock starts when the tenant has received a reconciliation statement for actual expenses versus the accrued operating budget from the prior year. This usually occurs around March or April each year.

Our review goes beyond the annual expense statements provided to you. We include a detailed analysis of the landlord’s general ledger, documents and records to verify you are being charged no more than your negotiated share.