AMTdirect’s corporate office is located just outside of Charlotte, NC. A little more than a year ago, Charlotte office lease rates as well as shopping center lease rates were hitting record highs. High-rise office towers were appearing like weeds all over the city as tenants were quickly filling these buildings.

Today, that seems like memories of the distant past. As with most of the major markets in the US, the current economy has changed the commercial real estate landscape. What was once a market dominated by landlords having the upper hand and dictating rent payments has drastically turned where tenants now have the upper-hand.

Property managers are slashing rents halfway through contracts and brokers are giving tenants free flat screen TVs. Of course this is nothing new as property managers always have adjusted rents depending on the market. However, today’s market has added complications with tighter credit markets and weakened demand, which is affecting both parties.

Tenants are asking for breaks and bargaining hard when it comes to lease negotiations. On the other side, Landlords are paying closer attention to their tenants more than ever. In many cases, they are requesting financial records of tenants who are asking for help to make sure the tenants are not trying to take advantage of them.

What it all comes down to is forcing both sides to have a tighter grip on their properties. A year ago, if a tenant went out of business, the space could be quickly leased, now it takes more due diligence on both sides to lease an office or retail space.

The market has also changed the way that both landlords and tenants have used AMTdirect. For those new to active real estate management solutions such as AMTdirect, AMTdirect gives you an ability to achieve significant cost savings through improving operational efficiencies by utilizing a 100% web based solution that enables visibility into real estate spend and process.

In the past, the driving force for a real estate management solution or commercial real estate software was because of stricter regulations (such as Sarbanes Oxley and FASB) and intense competition over locations. As tighter regulations still remain a top concern for purchasing commercial real estate management software, clients are using AMTdirect’s software in new ways. Now tenants and landlords alike are using commercial real estate software to monitor and scrutinize every intrinsic detail of their property in order to achieve hidden cost savings.

In a downtrodden economy where every penny matters, clients are retaining cost savings that were previously left on the table. As of recent, our clients are using AMTdirect to see typical savings of 3 to 6 percent of real estate management costs.

Announcing Instant On from AMTdirect.
First we revolutionized the industry with Active Real Estate Management, and now we are revolutionizing how you select, buy and implement real estate software solutions with Instant On. For years, real estate managers and professionals have struggled with the same what if questions:

What if you could try software before you buy it?

What if you could cancel all or part of your software expense if your needs changed?

What if you could start with breakthrough results instead of starting a tedious evaluation project followed by a backbreaking implementation project?

What if you could show your senior management a fully working solution rather than seeking permission to evaluate and buy a potentially effective new solution?

We now have the answer. Instant On changes everything. All you need is a web browser; no lengthy evaluation project and no software to install. Just enter your data, or start with our existing templated profiles. Experience, firsthand, all the benefits of Active Real Estate Management.

And remember, our Instant On delivery platform brings to you an Active Real Estate Management Solution that has been field proven in a wide range of demanding, real world environments, actively managing tens of thousands of properties throughout the world for mid-sized and major enterprise companies alike.

To ensure that Instant On delivers a roaring success, this approach is initially available in a selective release. If you are interested, we suggest you act quickly to secure an early position, as the limited slots are filling up rapidly.

As added support for our Instant On model, AMTdirect offers a comprehensive suite of traditional enterprise services. This “full service” approach complements the Instant On capabilities with expert consulting, in-depth training and onsite assistance. If desired, we will support you with step by step assistance, even offering “we do it for you” services whereby we implement the system and assist in building out your database of real estate information. Best of all, these industry leading services are all performed by our in-house, expert staff – no outside contractors – and all are available on an a la carte, use-as-you-need-it basis.

Why is AMTdirect revolutionizing the world of real estate software yet again? First, it’s because we are real estate professionals ourselves, and we know what we would want if we were a buyer. And second, we believe that once real estate professionals discover the value of Instant On, they will never have it any other way.

If Only Buying a Car Was This Wonderful
What if you could get the car of your dreams free for the first 30 days? You could drive it out of the showroom, commute in it, shop in it and take trips all over with it. If you liked it, you could keep it beyond the first 30 days by paying a reasonable fee each month. If your needs changed, or if for any reason you no longer liked the car, then you could stop driving it and discard it along with your monthly fees.

While no one would sell you a car this way, we think that this is the only way to buy new software. In a decade or so, this will be the only way people will buy new software. That is why AMTdirect is revolutionizing the entire process for evaluating, selecting, implementing and acquiring our revolutionary Active Real Estate Management solution. We started with the industry’s most capable solution, a solution that is fully web based and available on demand as software as a service. Then we recognized that this premier solution, one that is proven to deliver superior value, is one that when tried, is one our customers can’t live without. So, we’re giving you the keys. For those of you who are skeptics – or need to prove value to your skeptical senior management – can you think of a better way to get new software? We don’t think so, and once you try Instant On we think you’ll see it our way.

Avoid The CAP Blues
By Rick Burke

A common statement from clients or potential clients when analyzing their portfolio to determine how much money a lease audit program will save them is: “We don’t worry about overcharges on these leases because our CAM and Real Estate costs are capped.” Right?…Wrong!

A CAP should never be confused with a fixed amount, but quite often it is. There are several situations where the landlord can inadvertently or intentionally overcharge a tenant even though a CAP is in place. These include the actual cost being lower than the CAP amount, yet the landlord passes through the maximum cap amount. Another situation is the timing of the CAP and how it is calculated. Is it for the calendar year, lease year, annual or cumulative? Lastly, if the subsequent years’ caps are based on the first year’s cap, the calculation error grows each year, creating a large overcharge by the end of the lease term.

The same is true for landlords as well. Often landlords undercharge tenants by not calculating CAPS correctly or not excluding variable expenses allowed per the lease from the CAP.

To illustrate a CAP overcharge to a tenant with a short example: a lease states that the CAM cost for the first year cannot exceed $3.00 per square foot and increases 5% annually thereafter. The tenant moves in on July 1st, 2007 and has 10,000 square feet. The landlord invoices the tenant a CAM billing for year end 2007 that states CAM cost is $30,000 ($3.00 x 10,000 sf) and adjusts the estimated payments for the following year based on the new CAP of $3.15 psf. Is this correct? No.

1. The landlord charged the entire $3.00 CAP to the tenant when we don’t know what the actual CAM cost is. The actual CAM cost could be less than the $3.00 psf.

2. The tenant moved in on July 1, 2007 and should only pay for the CAP for the period of July 1 – December 31, 07 for the year end 2007 CAM billing (i.e. 50% x 3.00 * 10,000 = 15,000). The following 6 months, January 1, 2008 – June 30, 2008, should also fall under the CAP for the next billing thus reducing the actual cost for calendar year 2008 and reducing the tenant’s estimated payments for 2008.

Furthermore, if the first year CAP is not reviewed in detail, the progression continues each year and the overcharge becomes greater and greater. If one does the math, the potential overpayment for a tenant with 10,000 sf that the actual CAM falls short of the CAP by 30% could overpay by as much as $30,000 in 3 years.

To avoid a CAP overcharge, the tenant should perform a detail desktop audit on the first years of a CAP. A good rule of thumb for reviewing CAPS is to ask the following questions about the CAP when reviewing the CAM Statement:

• Did the actual CAM cost exceed CAP?
• Was a partial year calculation applied correctly to the CAP?
• Was the CAP taken prior or after calculation of pro-rata share?
• Were the excluded expenses per the lease applied correctly to the CAP?
• Is the CAP annual or cumulative based?
• Does the CAP apply to subsequent years?

When it comes to CAPS, never assume that the CAP has been met. By asking the above few questions as you review a CAM statement with a CAP or if you’re billing a statement with a CAP, will keep you from “Singing the CAP Blues.”

Rick Burke is President of Lease Administration Solutions, LLC specializing in Lease Auditing, Lease Administration and Lease Abstracting for office, retail, industrial and telecom space.

Rick Burke works closely with AMTdirect users and clients on an ongoing basis to resolve their lease administration and lease audit problems
http://www.leaseadminsolutions.com/

AMTdirect has been an active member of the NRTA (National Retail Tenants Association) for sometime now, and in my opinion, it has always been one of the better organizations out there. There are numerous benefits of becoming a member of the NRTA, but one of my favorite benefits is the ability to access their message board.

Message Boards and User Forums provide industry experts with an online bulletin-board community that is responsible for uniting industry professionals in order to share thoughts, ideas, and provide technical assistance. The NRTA message board is a great online resource for industry professionals to obtain advice from fellow professionals.

For example, one of last month’s NRTA posts dealt with removing prior year’s CAM charges when a new management company is in place. Listed below is the question posted by a lease management professional on the message board along with fellow industry professionals’ responses.

NRTA’s Message Board Question of the Month:

Question:

While reconciling 2005 and 2006 CAM charges against our Lease, I discovered my company was being charged for expenses that are not our obligation under the Lease. The management company for the Landlord agreed with my assessment, is crediting my company $10,000 to reimburse for the charges, is adjusting the monthly payment down going forward, and removing these charges from future reconciliations.

Looking deeper into the file, I discovered that we have paid these charges dating back to 2002, when our Lease began. Is there a statute of limitations in this situation? Is the current management company obligated to credit erroneous charges assessed by another company prior to their contract? Management companies I have dealt with in the past reason that they are only responsible for that which happens under their guard. I appreciate any insights on the matter.

Responses:

1) I have had this happen multiple times and have always been successful at getting it back. There have been a couple of times where we only got half back after negotiations. You have to look at whether or not it was just the property management company that changed or the ownership (and along with that, the new PM). If the ownership changed, was an estoppel given? Always try, because it doesn’t hurt to ask. Good Luck.

2) If I understand this correctly your issue is with the previous landlord, not with either a current or previous management company. It would seem inappropriate to expect the current landlord to reimburse overpayments made to the previous landlord, unless you could document that the funds representing the overpayments transferred ownership to the purchaser through the purchase and sale agreement.

3) This is an interesting question that is frequently posed at NRTA conferences. Not suprisingly, it touches on a number of topics and issues. The first is the role of the management company, which is strictly an agent of the Landlord. Therefore, their “objection” that the overcharge occured on someone else’s watch is legally irrelevant. Assuming that the landlord hasn’t changed over the years, then the issue becomes one of lease language — was there a limitaiton of the time to object or audit? - and applicable law, ie: the statute of limitations. Given that the statute of limitations for contract (ie: lease actions) is usually at least four years - and your time to bring a claim commences only when you recieve the final reconciliation, it is likely that this would not foreclose your claim. You may also be foreclosed from pursuing this by what are called “equitable” defenses, that is, that you failed to object to these charges over the years and are now prohibited from doing so. Having said all this (and warning you that you can only get legal adivse from your counsel), I would politely but firmly inform the management company that regardless of who was representing the landlord in the past, you are still entitled to recovery (if, indeed you are), and that you hope that they will pursue the matter in your behalf, or you will do so directly.

This is just a small preview of what the NRTA message forum has to offer and I encourage you to visit their website to learn more about their organization.

Other organizations/associations include:

International Council of Shopping Centers (ICSC) – www.icsc.org
Corenet – www.corenetglobal.org
National Retail Federation – www.nrf.com
Realcomm – www.realcomm.com
Boma – www.boma.org

I ran across an interesting article in this month’s issue of Realcomm Edge regarding the Top 10 IT Issues for Commercial Real Estate in 2008. Realcomm surveyed their 2008 Real Estate CIO advisors on a number of topics from server utilization to staff development and asked where they see there top IT issues in the coming year.

At number one in the list was Document Management. The article states that commercial real estate remains the most paper-intensive industry on the planet and, at the same time, offers the greatest potential for paperless workflows. Document and file versioning, indexing, and retention strategies are among the greatest challenges for IT today.

The explosion of the “Green” movement has been a driving force for Document Management being number one. Under the “Green” movement, it is more common that employers are willing to let employees work from home a couple of days of week resulting in an increased need for automation and anytime access to your leases/contracts. It seems that not only are real estate management systems aligning your real estate strategy with corporate strategy, but are also playing a pivotal role in aligning your real estate strategy with your “Green” strategy. The article goes on to mention other Top 10 concerns include vendor viability, business intelligence, and staffing.

The Top 10 in order are as follows:
1. Document Management
2. Disaster Recovery - If your company suffers a major loss of data, are you prepared?
3. Business Intelligence - Does the “one-size-fits-all” approach really apply for enterprises?
4. Building Automation Strategies - Intelligent, green building technology experts are in short supply.
5. Global Expansion
6. Alignment - Are you maximizing the ROI of IT services by leveraging them across multiple business units?
7. Vendor Viability - How secure is your vendor with companies being acquired at an increasingly frenzied pace.
8. CRM -
9. Staffing
10. Virtualization - Virtual machines offer a significant means to cut IT costs while “greening” IT operations.

To see a detailed list of the Top 10, see this month’s RealcommEdge Magazine.

The good news is that if you are using AMTdirect, then you are already utilizing one of the eleven tips to green your work. The Software as a Service (SaaS) model provides a twofold approach to green savings. SaaS allows corporations to focus on the actual dollar cost savings needed to grow your company as well as the environmental benefits that can assure future generations a greener world. At AMTdirect, we believe it is the corporation’s responsibility to not only grow their respective companies, but to do their part in improving the earth. AMTdirect’s SaaS model accomplishes both feats by offering greater agility, profitability, efficiency and innovation. Through the utilization of AMTdirect’s SaaS model, you are taking a step towards a greener world.

How does AMTdirect’s SaaS model contribute to a Greener World?

Reduction of Carbon Dioxide Emissions:

AMTdirect’s SaaS model saves a ton of energy by more efficiently using computing resources through the centralization of data center operations. Instead of thousands of individual companies operating their own power hungry data facilities, SaaS combines the operations of countless companies, therefore driving efficiencies and directly reducing the amount of carbon dioxide emissions that are released into the atmosphere. On average, a typical server operates at 450 watts, multiply this number by the tens of thousands of servers needed for companies to host their own software and the energy savings become substantial. In addition, corporations will see a significant financial cost savings because of the electricity reduction that is no longer needed to run their own large data center.

Additional Energy Savers:

SaaS data centers are built to maximize energy usage and improve efficiency as a result of stringent customer service level agreements that require data centers to have the most up-to-date energy efficient equipment on the market. Therefore, AMTdirect’s data centers are always running at their most efficient energy level.

Not to be overlooked is the actual AMTdirect application. AMTdirect’s foundation is based on the premises of helping you actively manage your real estate assets through the use of our web-based software. And as a result, you can eliminate the rows of filing cabinets containing redundant leases, work order requests, and countless other contracts that can pollute your hallways.

As more and more companies move to the SaaS model, AMTdirect is committed to continue using only SaaS applications when conducting business. Whether it’s doing payroll, customer relationship management, or sales, AMTdirect strives to do its part and serve as a role model for environmental responsibility.

Top Ten Ways To Go Green At the Office:

Did you know that one office worker can use a quarter ton of materials in a year–which includes 10,000 pieces of copier paper? Heating, cooling and powering office space are responsible for almost 40% of carbon dioxide emissions in the U.S. and gobble more than 70% of total electricity usage. Commuters spew 1.3 billion tons of CO2 a year. Computers in the office burn $1 billion worth of electricity annually–and that’s when they’re not producing a lick of work (according to Time Magazine). All our unnecessarily generated company waste adds up to unnecessarily wasted company cash. TreeHugger has put together a top ten list of simple ways a company can go green:

1. More work, less energy
For many people, a computer is the central tool at work. Optimizing the energy settings for computers and other devices can be more than a modest energy saver. Set computers to energy-saving settings and make sure to shut them down when you leave for the day (“standby” settings will continue to draw power even when not in use). By plugging hardware into a power strip with an on/off switch (or a smart power strip), the whole desktop setup can be turned off at once (make sure to power down inkjet printers before killing the power—they need to seal their cartridges). Printers, scanners, and other peripherals that are only used occasionally can be unplugged until they’re needed. And of course, turn off lights in spaces that are unoccupied.

2. Digitize
It does seem a bit strange that in the “digital age” we still consume enormous amounts of mashed up, bleached tree pulp, most of which gets used once or twice and then tossed or recycled. The greenest paper is no paper at all, so keep things digital and dematerialized whenever possible. The more you do online, the less you need paper. Keep files on computers instead of in file cabinets (this also makes it easier to make offsite backup copies or take them with you when you move to a new office). Review documents onscreen rather than printing them out. Send emails instead of paper letters.

To see the rest of the Top 10 Ways To Green Your Office…go HERE

If you have any other ways that you are greening your office place, then let us know by commenting below.

Most tenants and landlords operate under the belief that once their lease is signed that neither party would be willing to change it. After all it’s a lease - a legal document - the contract between the landlord and tenant, a “historic documents” like the Declaration of Independence or the Bible. It was drafted by several brilliant lawyers and should never be altered by mere mortals!!

Think this through and you reach the opposite conclusion. The lease document represents the agreed position of both parties at a point in time. Change is certain and the relative positions of each must have changed as both moved to the current point in time. Can you change the lease? YES YOU CAN, but you first need make a realistic determination of what has changed for both parties, what negative events have or are about to happen to each and what actions you can take to avoid these unpleasant future events.

The trick to all of this is understanding the landlord’s needs at a point in time vs. the tenants needs at the same point in time. This could be today or at some point in the future (i.e. the upcoming renewal.) What do you have to trade? How much is it worth to both the landlord and tenant? What can you get of equal value? When that point in time arrives, you then bundle both needs in a package and present them to the respective party.

In order to do this you need to put on the opposite hat. Be the landlord or tenant; look around the center where your store is located. What is wrong or missing? How could you make more money from the real estate? What do you need to achieve a higher return on your investment? What or who stands in your way?

I recently represented a tenant who wanted to close or reduce the size of a poorly performing store. They believed that the landlord would have to be paid to a fee to accomplish their goal. The lease imposed significant use restrictions on the landlord. When the lease was signed Kmart looked like a good long term bet, but now it was vacant. They were both at a new point in time but just did not realize it. We were able to recognize this and lead both to a more comfortable new point in time. The landlord got relief and was able to divide the vacant store into three new tenant spaces. Our client got her store size reduced and the rent for the remaining space was reduced well below the market value of the space at NO cost to my client.

So next time your store or shopping center is in a bad place, give some thought to your new point in time and where your respective party stands. Can you change the lease to recognize the new point in time?
– YES YOU CAN!

Jerry King
jking@rent-research.com
Rent Research Consultants, Inc.

Al Gore’s movie and Nobel Prize, Kyoto, green credits, demand response, wind farms, smart grids, record oil prices and the list of reasons energy is such a hot topic goes on and on. Venture capitalists poured over $148 billion into clean energy technologies last year alone.

According to a Wall Street Journal survey of the Fortune 1000 annual reports, over 65% of these companies have the support of the CEO and Board for clean energy initiatives.

It’s a dizzying sea change of activity in the energy markets that will affect the next few years and beyond in ways we have never seen before. The impact on multi-site organizations is being felt from the bottom line to the boardroom to store operations and beyond. Focus on energy management from commodity procurement, facilities management, environmental controls, utility program management, and the myriad of options for efficiency projects and incentives, not to mention the swarm of vendors knocking on the door, is creating unique issues for multi site companies. The need for help in sorting this out, tracking it and making sure the performance and return on investment is captured has never been higher.

Join Peter Weigand at AMTdirect’s 2008 User Conference for a discussion on clean energy technologies, current and pending regulatory changes and key trends that will impact your organization in the very near future. Also learn how AMTdirect is getting involved to develop technology aimed at helping multi site companies manage their energy programs.