Audit Case Study Synopsis™ (10882)

Project
Irving, TX

Industry
Telecommunications

Savings (total)
$1,986,129
Savings (square foot)
$12.34

Audit Accuracy™
100.00%
Audit Timeline™
38 days
Audit Timespan™
23 days
Audit Return™
$12.34

Campaign Commencement
Q2 2006
Representation Type
Exclusive Service Provider
Campaign Scope
North American
Audit Cycles
Annual-Recurring

Through the audit, we noted that the landlord used operating expense and tax amounts that did not contain a gross-up factor when determining the base year costs for this build-to-suit property. Furthermore tax amounts used as the base year tax expense excluded the building value and were solely attributable to the land value. Our team interviewed and worked with the lead tax assessor in the state to determine the proper base year tax assessment for the project. We reviewed all records associated with the operation and the construction of the building, remodeled the costs and reset the base year expenses. The client exercised its termination right during the negotiation of the audit and was asked to pay the termination fee. Our team analyzed the multiple metrics making up the termination fee and concluded that adjustments were warranted due to the impact of the previously adjusted expenses and tax concerns. Additionally, we determined that the amortization schedule and methodology used by the landlord were inconsistent with the lease provisions and adjustments were made.

Base year costs
Real estate tax “gross-up”
Build-to-suit costs implications to base year expenses
Termination fee

 
 

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