REoptimizer^® Blog

Some expenses related to occupying your rental property or office space are fixed and beyond your control; however, there are ways that you can save your company money. Properly managing your operating expenses can positively impact your bottom line. Check out these top tips on minimizing and controlling expenses to get started:

For any business, finding ways to decrease costs and eliminating unnecessary expenditures is important for improving the overall bottom line. Companies that own their own buildings or have triple net leases can exercise control over operating costs to reduce expenses and increase profitability. Following these tips can help you better manage operating costs:

If you ask any accountant, they will tell you without even thinking that operating expenses are a liability. When you sign a lease and you commit yourself to making payments of rent and operating expense reimbursements, you've taken on a liability. However, inside the liability that comes from the OpEx that you're already paying, an asset might be hiding.

Are $6 per square foot operating expenses reasonable? How about 20? As with many corporate real estate questions, the answer depends on many factors, starting with what they're being benchmarked against. Depending on the type of benchmarks you need to set, you can tap into different data sources -- both internal and external -- to help you figure out whether or not your operating expenses are reasonable for your particular market conditions.

If you own your building or you have a triple net lease that give you a degree of control over vendor selection, you have the ability to control many aspects of your operating expenses. While each building, each community and each ownership structure is unique, here are a few strategies that you can use to manage and, with some luck, reduce what it costs to operate your spaces.

Is $6 per square foot operating expenses reasonable? What about $20? As with many corporate real estate questions, the answer depends on many factors, starting with what they're being measured against. Depending on the type of benchmarks you need to set, you can tap into different data sources - both internal and external - to help you figure out whether or not the operating expenses you pay are reasonable.

Before signing a lease, it's a good idea to think about the future. With many tenancy agreements, the rent you pay on day one bears little resemblance to what you'll pay for your first annual reconciliation, and after the rent escalations start. Even if you clearly define those escalations, you can end up at your landlord's mercy when it comes to paying for operating expenses that he controls. Following a three step process can help you plan for what could happen and manage escalation expenses.