Building Tour Reveals Inequitable AllocationsMajor global firm saves $2.5 million |
A major global firm was leasing office space in a London office building that had a seven-story central atrium. Although the atrium was not accessible to our client, the landlord, who was also the only other tenant in the building, was treating the atrium as part of the common areas. After a physical tour of the building, Deloitte identified that all costs associated with the atrium, including elevator maintenance, heating and cooling, electricity and cleaning were being charged as part of the general operating expenses of the building and not directly to the only tenant of the building with access (the landlord). Relying on certain definitions and exclusions contained in the lease, we assisted the client in a successfully negotiated settlement with the landlord to exclude the majority of the atrium-related costs.
Total savings: $2.5 million over the life of the lease.
Overlying lessons:
The value of a building tour should not be overlooked. The building tour allows for the lease audit team to obtain a better understanding of the building’s operations and management. We have global offices to assist you with your lease audit* needs.
*The term "audit" as used herein is not and should not in any way be construed to be synonymous with the terms "audit," "audit procedures," "compilation," "review" or any form of "attestation" service as described in the pronouncements on professional standards issued by the American Institute of Certified Public Accountants.
As used in this document, ‘Deloitte’ means Deloitte LLP (and its subsidiaries). Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.
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