Property Accounting Support

The commercial real estate industry has learned to rely on CREModels for an informed and systematic approach to real estate property accounting support services—one that can save hundreds of hours of labor and tens if not hundreds of thousands of dollars at scale across the asset-management lifecycle of retail and other accounting-intensive property types.

Our team of expert real estate analysts focuses on avoiding and/or correcting costly miscalculations that often arise in property accounting by

• standardizing the financially relevant details of your property leases, and
• integrating these codes into your accounting system to ramp up property management accuracy and efficiency.

“Misclassifications are an underappreciated problem,” noted CREModels Managing Principal Mike Jaworski. “It is not uncommon to see situations where, over years and years, checks have been misclassified as ‘rent,’ even though $2k of that $3k check was for base rent and the rest was for reimbursements like taxes, insurance and common area maintenance (CAM), which complicates property accounting.”

These accumulated errors make running CAM reconciliations exceedingly difficult and costly. In conducting twice-weekly bank reconciliations on behalf of CREModels clients, our analysts log into the bank and property accounting system to guarantee that key financial elements are correctly coded. “You want that GL to be shipshape so that when you run that monthly report and print out the P&L, everything is in its proper category,” Jaworski says. 

By relying on our analysts’ years of expertise and access to advanced real estate asset management software, our clients are able to

• identify and correct past miscodes (perhaps because accurate lease abstracts were never created), and
• automate the coding process itself, making assets easier to properly manage and monetize moving forward.

“When that payment comes in, the system knows how to route it,” Jaworski explains. “By setting up your property accounting system this way now, we give you a clean rearview mirror for those moments when you do need to look backward at property performance over time.”

Our property accounting support services include:

For month-end model update/property close…

• Update cash flows, rate curves, loan balances, draws and reserves, etc., using clients’ model or one of CREModels’ custom modules
• Add and improve model features for better visibility
• Add loan-specific tests
• Create ad-hoc KPI charts and graphs
• Reconcile bank accounts, AR and AP
• Review and reconcile all financial transactions (specifically rent collections and operating expenses)
• Record any necessary adjusting entries, such as depreciation, amortization, and prepaid expenses (insurance, property taxes, and utilities)
• Create preliminary P&L, BS and CFS
• Review property-management tasks and any monthly reports or incidents
• Handle any tenant security deposit updates
• Update tracking mortgage and loan payments
• Review and analyze financial data to identify any trends or variances with property accounting
• Update any relevant budgets and forecasts
• Hold dedicated ownership meeting to go through reports and answer any questions or comments