We conducted a lease file audit of a portfolio of 7 apartment complexes in Houston, Texas with over 2,200 units. Our client was a New York-based private investment management company. We found that significant upfront concessions, including move-in specials and renewal incentives, were being offered at 2 of the properties. Our findings focused our client’s attention on adverse market conditions that were impacting those properties.

We conducted a property management audit of a portfolio of 4 office buildings in Maryland, Pennsylvania, Illinois, and Nevada with over 400,000 square feet of office space. Our client was a special servicer with over $80 billion of assets under management. We found that the third-party property manager had incorrectly paid a vendor multiple times for work at another property. As a result of our review, the erroneous payments were refunded, and the property manager modified their procedures to ensure that such errors would not happen again in the future.

We conducted an NOI audit of a neighborhood shopping center near Miami, FL. Our client, one of the top five banks in the United States, was underwriting a potential loan on the property. Our analysis uncovered that the historical operating statements were significantly understating real estate tax expense, which constituted 50% of total operating expenses for the property. We made the necessary normalizing adjustments, which helped the lender underwrite the operating expenses more accurately.

We conducted an NOI audit of a portfolio of 35 mixed industrial and R&D/flex buildings outside of Denver, CO. Our client was one of the largest publicly held commercial real estate finance companies in the world. Our analysis identified significant tenant delinquencies at several of the buildings. As a result, our client excluded these tenants from their projections, which helped them underwrite the revenue stream at the property more accurately.

We conducted an NOI audit of a 3,000 unit, 12-property self-storage portfolio in Michigan. Our client was a Connecticut-based private equity firm. The portfolio was part of a larger, 15-property portfolio for which all the historical income and operating expenses had been combined. We modified our procedures to exclude the operations of the non-portfolio properties, which helped our client focus on operations associated solely with the subject portfolio.

We conducted an NOI audit of a medical office building in Naples, FL on behalf of the buyer, a Los Angeles-based private investment company. Most of the historical operating expenses had been co-mingled with the operations of the adjoining hospital that was also owned by the seller but was not being sold as part of the transaction. Through detailed, line-by-line analysis, we synthesized a normalized NOI for the subject property alone, which helped the buyer fully understand the financial operations of the property being acquired.

We completed an NOI audit of a large assisted living and memory care facility in Portland, Oregon. Our client was a Dallas-based investor in healthcare and senior living facilities throughout the United States. The property was in lease-up, with only four months of operating history available. We annualized the partial year of operations and made numerous other appropriate adjustments to operating expenses, including property taxes, utilities, insurance, and payroll, which allowed the client to make more accurate cash flow projections for the property.

We conducted a lease file audit of a manufactured housing community on behalf a North Carolina-based investment management firm. After a detailed file review and interviews with the property manager, we determined that several of the units shown on the rent roll were not rentable and not generating income. As a result, the unit count at the property was revised and our client re-calculated their projections based on the correct number of units.

We conducted a property management audit of a 190-room hotel in southern California on behalf of a large, New York-based financing and servicing company. Through our review of insurance documentation, we found that the property manager was not maintaining the necessary levels of crime and employee theft insurance as required per the terms of the property management agreement. After bringing this to the attention of our client and the property manager, the appropriate levels of insurance were obtained.

We conducted a lease file audit of 3 student housing properties in Illinois, Ohio, and Pennsylvania with a total of over 1,100 beds. Our client was a privately-held real estate investment trust (REIT). We found that the rent roll for one of the properties did not reflect the vacant beds that existed. We captured this information through our on-site lease review, which helped our client accurately project revenues associated with these undocumented vacant beds.