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Is It You? Or Is It Your Landlord?
New York, N.Y., December 12, 2008 – – Property Works, a lease-administration specialist based in Decatur, Ga., recently recovered more than $238,000 in erroneous property costs for a 20-unit supermarket chain. The company described what had happened as a series of faulty charges that went undetected for 24 months. As the struggling economy depresses revenues for landlords and retailers alike, reducing costs emerges as a key tool for preserving profits. Careful, though, say the experts. Reducing costs is one thing; reducing strategic components of the business, such as labor and store counts, can slow response time when the economic recovery arrives. The first steps aim to reduce mistakes and waste. That’s where lease and property administration, occupancy-cost management and real estate tax management come into play. When those costs have been wrung out, it may still be possible to cut costs by restructuring leases. Under the heading of lease administration, the Property Works Web site offers a case history in which the company recovered $40,000 for a restaurant chain by reviewing the language in lease documents and ensuring compliance by both the restaurant units and the landlords. Occupancy-cost management may provide many opportunities to reduce costs. Property Works recovered more than $535,000 in overcharged rent, CAM and related charges for a 210-unit quick-service restaurant. For a 50-unit casual-dining restaurant chain, Property Works negotiated a 38% reduction in real property-tax assessment, creating a $12,000 savings. Certainly in the early stages of a slowdown, whether it turns out to be shallow or deep, the first step in cost reduction is to slash (not trim) fat without hurting the business model or its ability to perform strategically. Lease administration, occupancy-cost reduction and real estate tax analysis and reduction slash fat and never cut into bone.
-- Courtesy of SiteTalk, a product of Chain Store Age.
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