AboutMike Fortunato Expertise Can answer questions on all aspects of commercial real estate management, including lease administration, eviction issues, financial reporting and budgeting, asset valuation/enhancement, marketing & leasing, and site maintenance and repairs. 20+ years of real estate management.
Experience 20+ years in commercial management. Current own and operate property management company in southern California.
Question Typically retail centers are run by management teams or companies who would have to rely on third party contractors, sub and general contractors, architects, and consultants to serve and maintain all on going, occasional and emergency needed repairs and services. And in consideration of a safer and more controlled efficiency in operating expenses I with my long experience and knowledge in the business had personally committed myself through my management and superintendent duties to keep the pass through cam charges at the lowest possible level by taking as many rolls as I possible could to save and limit the involvement of third parties and associated cost.
The results were the following:
A successful change in the appearance and image of the center where old thrift shop quality tenants were replaced with Tenants like Cingular, Quiznos and other quality business operations .
CAM Charges were consistently controlled: Year 2002 CAM was $3.55 per Sq Ft
Year 2003 CAM was $3.39 per Sq Ft
Year 2004 CAM was $4.09 per Sq Ft
Year 2005 CAM was $4.75 per Sq Ft
quotations from neighboring center’s dated Sept /04 that ranged from $4.78 per square foot to $6.99 with an average of $5.88. also other expert in the area quoted an average of 6.71.
included in the consistent cam charges billed was a superintendent fee where all tenants (11)were satisfied but for one tenant who claims that I should not be charging a superintendent fee in return to my extra duties and involvement even more he believe that I should not even charge for a management fee due to the fact that I am the owner , I tried to explain to him that if i did not do such a duty and have left the management of the center for a typical management company Cam will certainly be much higher,but unfortunately he keeps insisting on his position do you have any opinion of what is the best way to handle the situation.
Answer I would think that if you told your objecting tenant the same thing you wrote to me, that's a pretty solid case for your position. But what it really comes down to is your lease. If the lease allows you to charge an administrative or management fee, then youlre entitled to charge for that. Admittedly, some leases only allow a pass through for third party services, and if that's the case in your situation then you may be stuck. In the absence of such a provision, you probably can charge an admin fee assuming the charges are reasonable and the services you provide are comparable to that of a professional management company.
