Case Study #1 – Langley Park, MD

CAM Expense Reduction & Vendor Management

Project Location: Langley Park, MD
Project Description(Including # of units & Square Footage:

  • 145,883 Square Feet shopping center
  • Ground floor retail; 2nd floor professional office
  • 39 total units

Project Roles & Responsibilities: Property Management
Period of Performance: 2009 – current
Objective: CAM Expense Containment
Vendor Service/Trade: Trash Removal
Date of Case Study August – October 2009
Underlying Problem: Upon taking over management responsibility of the center, it was determined that the property CAM expenses were higher than acceptable levels for comparable shopping centers in the area. In addition, the service agreements in place for the trash removal company were written under unfavorable terms for the landlord. These factors, along with other contractual terms, had the effect of limiting the landlord ability to enforce effective vendor management.
Action Steps: On behalf of the landlord, Brenits Realty Management commenced a plan to:

  1. Reduce overall CAM expenses;
  2. Improve efficiency/effectiveness of the existing level of service;
  3. Improve the terms of the service agreement.
    • Brenits Realty Management worked with vendor representative to review levels of service with levels of actual need based on tons of debris removed from the property and make appropriate changes in service
    • Brenits Realty Management worked with vendor representative to change terms of the underlying service agreement

Outcome: Due to Brenits Realty Management’s attention to detail, fiscal analysis, and ability to communicate landlord needs effectively, Brenits Realty Management accomplished the following:

  • Negotiated lower monthly rates for the roll-off compactors generating an immediate expense reduction of 12%
  • Aligned service levels for individual trash bins to more closely match actual tenant needs creating an opportunity for savings even greater than 12%
  • Negotiated more favorable service agreement terms for renewal (eliminated vendor “right of first refusal” to match competitor pricing), termination (inserted “for cause” language), and expiration (made all contracts co-terminus).

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