Download Shopping Center Utility Programs

9449 Penfield Ct.
Columbia, Maryland
21045 USA
tel:
410.964.3513
fax: 410.964.8275
e-mail: [email protected]
Shopping Center Utility Programs
Introduction
The Shopping Center industry is somewhat unique in the use of triple net leases. These leases
provide for recovery of utilities, and other charges, from the tenants based upon formulas stated
therein. In order to determine the correct charges for the tenants, and therefore obtain the
recovery, knowledge of the legal sections of the lease, accounting practices and engineering
principles are all required. Once these principles are understood, they can be appropriately
applied to the individual property and tenant. EESI s Utility Programs for Shopping Centers are
designed to meet the terms of the lease in a way to generate recovery and pass the scrutiny of the
tenants.
Shopping Center Utility Programs
These programs are presented as several options of service depending upon specific needs. This
is a cost-effective method of obtaining energy and engineering services because they can be
procured only when a need is identified. An additional benefit may be the ability to invoice this
work directly to the affiliate affected and not to corporate overhead. These programs include:
Utility Allocations
In order to properly bill the tenants for utilities and maintenance costs, utilities must first be
allocated to cost groups based upon sound engineering practices. All of the properties need to
have these allocation baselines established. Any new property or ones that undergo extensive
renovation or expansion will need to have the utility allocations reestablished. EESI has
developed a program to address the need for new allocations and is detailed in the Portfolio of
Services - Shopping Center Utility Allocation Program, attached.
HVAC and Tenant Light and Power (TL&P) Billing Factors
The final step in properly determining the billing for utilities and maintenance is to determine the
billing factors for each tenant. New tenants or ones that undergo extensive renovation need to
have their billing factors updated. EESI has developed two programs to address HVAC and
TL&P billing factor updates which are detailed in the Portfolio of Services - Shopping Center
HVAC and TL&P Billing Factor Programs, attached.
These programs would also satisfy the lease requirements of Landlord s heating and ventilation
and air-conditioning consultant and Landlord s electrical engineer factor determinations
which are often contained in the HVAC and Electricity lease sections.
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Tenant Utility Dispute Resolution
Tenants have become much more aggressive in the past few years with landlords in disputing
their utility and maintenance charges. The best defense is to have a sound program based upon
good engineering practices in determining the billings to the tenants. Invariably, even with a
good program, disputes arise in the course of doing business. EESI has years of experience in
settling utility and maintenance disputes with tenants.
On-call expert advisories
If the history of a project is already known, many of the questions that arise from the lease
negotiation process can be answered quickly and efficiently. Calls typically would be generated
by:
- The Legal Department, including the Legal Assistants
- The Energy Department
- The Property, including the property manager and/or the operations manager
- Accounting Department
- The Leasing Department
Because of the president of EESI s extensive experience in the Shopping Center industry as both
an in-house Director of Engineering and as a consultant, EESI is able to provide these services in
a cost-effective manor.
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