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

In today’s complex commercial real estate landscape, risk management isn’t just about insurance policies and emergency protocols – it’s also about uncovering hidden financial exposures buried within your lease agreements. One powerful, often underutilized tool in this process is a deep dive Lease Analysis by a third-party firm.

Lease Reviews serve as a safety net, catching discrepancies early and helping mitigate financial and legal risks. Ways lease reviews enhance risk management include:

• Cost Control. Lease Reviews ensure all charges are in line with the lease agreement – Auditors find overcharges in Operating Expenses, CAM, Real Estate Taxes, HVAC, Insurance, Cleaning, Overtime Energy Usage, electric, wiring, Sundry charges, co-tenancy situations, indexes, misapplied Caps and everything in between.  Focusing on line items, including Administration, Management fees, Insurance, gross-up miscalculations, base year inaccuracies, improper utility calculations and other post-covid billing anomalies can save you money.
• Contract Compliance. Confirm Landlords and/or Management Companies are fulfilling their contractual obligations, reducing exposure to penalties or litigation.
• Data Accuracy for Strategic Decisions. Real Estate decisions – renew, relocate, renegotiate – are only as good as the data behind them. Reviews ensure that data is trustworthy.

Make Lease Reviews Part of Your Annual Risk Strategy

Don’t wait for an issue to arise. Incorporate lease reviews as a recurring risk management practice. Consider external audit specialists who can provide objective insights and expertise in lease interpretation and market benchmarking. 

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