Occupancy Cost Reduction Services

AsiaPac’s occupancy cost reduction programs can significantly improve a company’s bottom line performance and increase the contribution of corporate real estate to shareholder value by reducing the largest operating expense – occupancy costs. AsiaPac’s proactive approach to improving the performance of the corporate portfolio extends beyond transactions and includes a full analysis of all operating costs.

AsiaPac’s portfolio administration team’s primary role is to identify ways to reduce the occupancy costs of our clients by offering the following services:

• Occupancy Cost Reduction
• Lease Audit and Reconciliation
• Cost Mitigation During Lease Termination
• Lease Translations and Abstracts

Occupancy Cost Reduction:

Existing Leases: AsiaPac will renegotiate and restructure your lease to immediately reduce your monthly rent and Common Area Maintenance (CAM) payments regardless of the time remaining on the lease. CAM charges typically include utilities, common area maintenance, and taxes. In many cases, this will also represent a reduction and refund of the existing deposit

Lease Renewals: During the lease renewal process AsiaPac will audit the landlord charges (rent and CAM charges) for the previous lease term identifying overcharges and errors to reduce the client’s occupancy costs moving forward.

Lease Audits and Reconciliation:

AsiaPac provides savings through a desktop lease audit in which CAM charges imposed by the Landlord, are reviewed for accuracy and compliance with the lease terms. These savings are tracked and reported annually to clients for whom this service is provided, under separate agreement. An additional benefit to a lease audit is our ability to confirm the correct costs are charged by the Landlord going forward and to reinforce that the client is diligent about lease compliance. This includes:

Recovering past overpayments Identifying and quantifying future cost savings over the balance of the lease term Ensuring Landlord billing practices are in compliance with lease specific provisions Financial Reconciliation: Once the results are documented, AsiaPac will contact the Landlord to negotiate a refund for all amounts overbilled.

Cost Mitigation During Lease Termination:

When a Tenant’s lease expires, there are a number of issues the Landlord will identify and intends to deduct from the deposit on file. The items that need to be addressed include:

Restoration: In most international leases, the Tenant is obligated to remove all of the improvements they installed prior to taking occupancy. In all instances, the Tenant is obligated to pay for this service and in many leases today the Landlord requires the Tenant to pay for this service with the work required to be done by the Landlord’s contractors. This is always a more expensive option than getting competitive bids with local vendors and often represents a premium cost of 25-40% above market rates. AsiaPac provides a project management service to work with the Landlord on the Tenant’s behalf to provide a lower cost solution and ultimately mitigate the final cost of terminating the lease.

Financial Reconciliation: AsiaPac will provide a comprehensive analysis and audit of all costs the Tenant has paid over the tenure of the lease including rent and CAM charges. Additionally many landlords charge their tenants for more space than they are actually using. This error has a double affect on the total occupancy cost as it increases the rent and the CAM since they are directly calculated based on the square feet stated on the lease document.

Lease Translations and Abstracts:

Many clients elect not to translate a foreign lease into English relying instead on their local office to interpret the lease terms. As a result many tenants do not fully understand the legal and financial obligations of their lease which can be problematic.

AsiaPac will provide a complete translation of a client’s international lease agreement including exhibits and addendums for all the primary languages into English. In addition, AsiaPac will also provide an abstract version to be used to directly input the lease terms into a client’s real estate portfolio database.