Area Management

Subdivision of a property’s total area into custom “Area Groups” for the purpose of accurate expense reimbursement. An Area Group is a collection of tenants, the area of which is used in pro-rata calculations for tenant expense reimbursements.

A commercial property might have areas such as pad sites or outparcels, that operate in a manner unique to the rest of the overall property. Within CashFlow, you can aggregate these areas into custom “Area Groups” and use them in pro-rata calculations for tenant expense reimbursements.

Example: An electronics store and coffee shop occupy the pad site of a larger retail center. The landlord of this property may incur operating expenses specific to this pad site, such as lot and curb maintenance or trash services. Because these expenses are specific only to the pad site, the pad site tenants would be responsible for any reimbursement of these expenses.

Within CashFlow, you could create the custom area group “pad site” in the Area Management section, adding the electronics store and coffee shop to this group …

… and select it as the pro-rata group for calculating pad site specific expense reimbursements ... 

So, Pro-rata % = (Area of tenant) / (Area of pad site group)

NOTE: "With great power comes great responsibility..." When utilizing the Custom Areas feature, you must also create the appropriate Operating Expense items, or Expense Reimbursement Groups to accompany the Area Group. If you don't do this, you could potentially run into situation where a custom area tenant is reimbursing 100% of the entire property's operating expenses. Always be sure to double check your tenant expense reimbursements in your pro forma.