Don’t believe the hype — physical retail is still growing, particularly in three key segments. Retailers are opening 4,080 more stores in 2017 than they are closing, according to a new research report from IHL Group, and they plan to open over 5,500 more in 2018. Mass-merchandisers, including off-pricers and value chains, are the fastest-growing retail segment (+1,905 stores), followed by convenience stores (+1,700 stores) and grocery retailers (+674 stores).
The research for the report, “Debunking the Retail Apocalypse,” reviewed more than 1,800 retail chains with more than 50 U.S. stores in 10 retail vertical segments. It found that for
Continue reading: Report Debunks Retail Apocalypse: More Stores Opening Than Closing
EAST LONGMEADOW, Mass., July 13, 2016 — Many retail CFOs are seeing that occupancy costs as a % of sales have grown significantly in the last few years and are seen as a major obstacle to achieving the profitability targets CEOs desire. According to Paul Kinney, executive director of the National Retail Tenants Association (NRTA), in an environment of weakened in-store sales and occupancy costs as a % of sales, it’s a critical time to adopt a clear lease audit strategy.
He explains that retail CFOs
Continue reading: National Retail Tenants Association Urges Retail CFO’s to Audit Their Occupancy Costs
Retailers might soon be forced to recognize a higher lease liability on their balance sheets. John Meedzan of Technology Management does a great job explaining:
The Financial Accounting Standards Board (“FASB”) and the International Accounting Standards Board (“IASB”) (collectively “the Boards”) are in the process of completing a major Joint Accounting Project which will dramatically change the way that lessees account for their portfolio of leases. The objective of the Boards’ Joint Project was convergence on lease accounting, namely, an international standard for lease accounting applicable to all business entities. And the Boards have achieved the major guiding principle
Continue reading: Lease Accounting Changes Effect on Retailers
Why can’t my internal accounting team perform my lease audit?
Because lease auditing is a real estate function, not an accounting issue. You need the knowledge and experience necessary to uncover and successfully recover variances from real estate industry standards. Internal accounting teams rarely have this necessary experience and may miss out on valuable savings.
My company has performed a desktop audit—isn’t that enough?
A desktop audit is a limited view. It only shows you a review of the mathematical calculations, high-level lease compliance and the landlord’s explanations for large year over year variances. A lease
Continue reading: Frequently Asked Questions About Lease Auditing
Ahhh, the joys of managing leases. It’s like herding cats through a field of mice sometimes. Even though I’m a “dog guy”, we have 2 spoiled, lovable cats that I sometimes think were landlords in a past life, only without the opposable thumbs, Bluetooth device and power of attorney. I’m with America’s largest, most experienced real estate lease recovery audit firm, OAG, The Occupancy Cost Audit Group (can you say plug?) and we identify and recover mistaken overpayments of occupancy costs to landlords on a contingency basis.
At several of our clients, we see a
Continue reading: Fighting Occupancy Cost Overcharges
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