Small discrepancies in building measurements across an entire portfolio can mean either big savings or big expenditures, especially over the course of many years. Here’s what we recently found in a client’s portfolio:
During the due diligence phase of a multi-property acquisition, Gensler performed a BOMA space analysis study across a portfolio of 18 buildings totaling 4 million square feet. The study uncovered a large discrepancy between the square footage reported by the seller and the amount found by the study.
Six of the properties were overstated a total of 32,000 square feet. At $100/SF, this equates to overpaying $3 million. In the future, this space could disappear from the rent roll if the tenants become aware of the discrepancy.
2 properties were understated by 48,000 SF. This space would normally make its way into future leases, unfortunately, it was wrapped up in amenity space for leases that were 10 years from expiration.
With this information, the client was able to take a more detailed look inside the buildings and confidently negotiate the sale and plan for potential lease modifications.
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