In addition to the initial analysis, annual Operating Expense reviews should be performed to ensure the details of the Operating Expense lease clause (which was painstakingly negotiated between parties) are administered properly through the landlord’s Property Management division. The compounding effect from signing a multi-year lease can create big swings in costs, and six-figure savings have been achieved even for medium-sized tenants (i.e. less than 50,000 sq.ft.).
Biannually, landlords provide tenants with Operating Expense calculations – at the turn of the calendar year (December / January) a tenant receives the estimates for the upcoming calendar year, and in late Q1 or Q2, the reconciliation from the prior year will be delivered. Both deliveries are opportunities to ask questions and gain insights to the accuracy of the numbers on the books.