Retail Property: Building Revenue

The owner of this shopping center was playing the retail management role when he realized it was time to bring in the experts at Friedkin. Upon our initial review of the property and its financials, we realized that the owner was not performing Common Area Maintenance (CAM) reconciliation on an annual basis. Therefore, the property was not as profitable as anticipated. In addition, we noticed that prior management had not been billing all of the projected CAM revenue it could have on a monthly basis.

As our first order of business we researched several years of records to recapture the CAM reconciliation for each year. This substantially increased the cash position of the property. Updated monthly CAM billings also helped to improve the monthly cash flow.

With this additional cash flow we generated, we were able to make cosmetic improvements and initiate a leasing strategy to stabilize the building. With the building looking better, we attracted desirable tenants and renegotiated existing tenants for fixed terms. To reduce rollover exposure, we staggered the expiration dates of the various tenants. Now that the tenant roster is stabilized and the building's integrity and appearance have been improved, the monthly cash flow meets the owner's expectations.

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