We partner with tenants exclusively to uncover their portfolio’s hidden costs to optimize value.
2025 is shaping up to be a year of implementing strategies for organizational resilience and growth during uncertain times. Fewer companies are functioning on a hybrid model compared to the period following the widespread shift to remote work. Many companies have asked employees to come back and are continuing to use their existing space. Throughout the year we are projecting to see an increase in fees related to utilities, wages, insurance and more.
In the dynamic world of commercial real estate, it is crucial for businesses to proactively manage their operational costs. Lease expense reviews are instrumental in this goal. Cresa Toronto's team of experts enable tenants to thoroughly assess their leases and often recoup overlooked funds, mitigating the impact of rising expenses.
SERVICE LINE ONE-PAGER
Does your 2025 additional rent estimate fall outside the standard 3-5% range?
A Lease Expense Review is an invaluable tool to identify billing errors that often occur in commercial real estate leases.
Download this Lease Expense Review one-pager to explore the value of conducting a Lease Expense Review, and when is a good time to do so.
HOW IT WORKS
Our Lease Expense Review Process
01. Review of Historical Invoices
Examines the past three years of rental invoices to identify discrepancies between estimated and actual charges, ensuring accurate billing.
02. Analysis of Cost Trends
Tracks percentage increases in additional rent over three years to detect unusual cost fluctuations that may require further review.
03. Identification and Resolution of Discrepancies
Investigates irregularities to ensure charges are justified, preventing overbilling and ensuring lease compliance.
2024 is shaping up to be a year of implementing strategies for organizational resilience and growth during uncertain times. Fewer companies are functioning on a hybrid model as compared to the immediate aftermath of the pandemic. Many companies have asked employees to come back and are continuing to use their existing space. Throughout the year we are projecting to see an increase in fees related to utilities, wages, insurance and more.
In the dynamic world of commercial real estate, it is crucial for businesses to proactively manage their operational costs. Lease expense reviews are instrumental in this goal. Cresa Toronto's team of experts enable tenants to thoroughly assess their leases and often recoup overlooked funds, mitigating the impact of rising expenses.
SERVICE LINE ONE-PAGER
A Lease Expense Review is an invaluable tool to identify billing errors that often occur in commercial real estate leases.
Download this Lease Expense Review one-pager to explore the value of conducting a Lease Expense Review, and when is a good time to do so.
We partner with tenants exclusively to uncover their portfolio’s hidden costs to optimize value.
While mistakes made by landlords are not intentional, they are inevitable. Working with – and not in opposition to – your landlord, our advisors initiate an inquiry on basic lease compliance and fairness.
As your workspace continues to be underutilized, isn’t it time to get a second opinion on your commercial lease, to ensure every penny is accounted for? Talk to your Cresa Advisor today to review your 2023 estimates.
Your 2023 operating cost estimates have likely increased.
LEASE EXPENSE REVIEW
According to most leases, Landlords have the right to make adjustments in their calculation methodology which can increase or decrease operating costs, if they determine it is reasonable to do so. As a Tenant, it is crucial to look at the language in your lease to understand the rights required to challenge the Landlord’s determination of Additional Rent. In many leases, Tenants only have a limited amount of time to ask for support documents/information from the Landlord.
Understanding your rights, based on your specific lease, is important, particularly if you are being charged more than your appropriate share as per your lease. So, reading the fine print and being timely in terms of requesting and reviewing the Landlord’s support materials is more important now than ever.
Lease Expense Review
Additional rents are on the rise - Market Trends for 2023
Lease Expense Review
When is the ideal time to do a lease expense review
Lease Expense Review
Major Captial Expenditures Pass-through
OUR RESPONSES TO
Frequently Asked Questions
What are the most common hesitations clients have about Lease Expense Reviews?
Given the multitude of tasks that clients typically have on their plate these days, they often don't prioritize reviewing their lease expenses, because there's almost an assumption that the landlord has been doing it correctly. However, that's not always the case. As a partner to the occupier, we have developed a detailed process of going through this so that it isn't time burdensome on the tenant themselves.
We recommend clients perform a desktop review annually; however, performing an in-depth lease analysis every year will ensure consistent compliance with the lease over the term.
We provide customized attention to ensure that your best interests are at the forefront of everything we do.
A Desktop Review is a high-level review of the expenses paid, compared to what is indicated in the lease agreement. A Lease Analysis is a qualitative, in-depth investigation of all lease clauses and charges.
Lease Expense Review is an investment that pays off. Experience shows that close to 70% of the lease documents our experts reviewed contained errors. Our goal is to achieve cash recovery and cost avoidance for you while eliminating potential risks from your lease terms.
A properly conducted lease expense review does not adversely affect the tenant-landlord relationship. Instead, it enhances transparency, strengthens communication, and fosters a more collaborative and informed partnership. Through comprehensive lease analysis and financial documentation review, this process ensures accuracy in budgets, statements, and reconciliations. The result is a fair and professional assessment that benefits all parties while reinforcing trust and clarity between tenants and landlords.
Clients often hesitate to initiate lease expense reviews due to a limited understanding of the process and its advantages. To mitigate these concerns, clear guidance is provided on how the review ensures financial accuracy and compliance. Another prevalent hesitation stems from the perception that questioning lease-related expenses may strain the tenant-landlord relationship. However, tenants have a contractual right to verify that charges align with the lease agreement. Most commercial leases include provisions allowing tenants or their appointed consultants to review expense documentation. This process promotes fairness and transparency, benefiting both parties. It is recommended that tenants conduct lease expense reviews at least two to three times during their lease term to ensure ongoing accuracy.
The ideal time to conduct a lease expense review is approximately two years into a new lease term. Identifying discrepancies early allows for necessary adjustments that provide financial benefits throughout the remainder of the lease. For example, in a five-year lease, corrections made in the second year can generate savings over the next three years, while in a ten-year lease, savings extend over eight years. Regular reviews are particularly critical for long-term leases, as changes in building measurements, property management practices, and administrative personnel can impact expense calculations. A mid-term review, such as at the five-year mark of a ten-year lease, helps maintain accurate and equitable lease administration over the lease duration.
EXPERTISE
Our Experts
We know that for most organizations, a hybrid structure is inevitable. But a hybrid model isn’t one size fits all – it’s a spectrum. Understanding where your organization falls on the spectrum is the key is creating a sustainable workplace strategy.
Your 2025 Operating Cost Estimates Have Likely Increased.
LEASE EXPENSE REVIEW
According to most leases, Landlords have the right to make adjustments in their calculation methodology which can increase or decrease operating costs, if they determine it is reasonable to do so. As a Tenant, it is crucial to look at the language in your lease to understand the rights required to challenge the Landlord’s determination of Additional Rent. In many leases, Tenants only have a limited amount of time to ask for support documents/information from the Landlord.
Understanding your rights, based on your specific lease, is important, particularly if you are being charged more than your appropriate share as per your lease. So, reading the fine print and being timely in terms of requesting and reviewing the Landlord’s support materials is more important now than ever.
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