Cadence To Showcase that Retail Tenants Overcharged by up to 50 Percent Expenses Firm
September 22, 2004
Cincinnati, OH – September 22, 2004 – Exhibitors and attendees of the 2004 National Retail Tenants Association (NRTA) are about to discover that their landlords may be overcharging them by up to 50 percent. According to expense management firm Cadence, landlord billed utility charges can be a large profit center for landlords due to the structure of utility rates, the lease language, and the inability for tenants to perform comprehensive audits in house.
During the 2004 NRTA Conference in Fort Lauderdale, Florida, from September 26 through 29, Cadence executives will be highlighting how many landlords are purchasing utilities at one rate, then charging their tenants a higher rate – often 25 to 50 percent higher than what the landlord is paying. It causes consumer prices to be higher, and business profitability to be lower.
“The good news is that what has been traditionally thought of as a fixed expense now has a significant opportunity for savings,” Cadence president and CEO Jeffrey Hart explained. “This is big news to any shopping center tenant, because many tenants have lease language that allows them to recover utility overcharges. However, the analysis required to find the anomalies and recover the overages is complex and time consuming and, therefore, is rarely performed.”
Hart explained that the reason this happens is that landlords have no incentive to lower the rates to their tenants. Reducing the tenants’ bills would only reduce the landlords’ profits. In addition, most landlords would also have to increase their staff to regularly spend the time with each local utility to see if any new rates have been established.
“Keep in mind that a landlord may have 30 to 100 malls and that checking with each utility company would involve a lot of work, and even well intentioned landlords are not going to spend that extra time and effort to cost themselves money in the process,” Hart said. “In order to protect themselves, a tenant would have to have a vast knowledge of its stores’ energy usage and rate options or it must outsource the analysis of its leases and energy invoices to a third party expert – like Cadence. Cadence is your best defense against this practice, whether intentional or not, and multiple site businesses have a great opportunity to save time and money. Concentrate on selling widgets, we’ll make sure you are never overcharged or overpaying.”
Hart also added that during the conference, he will be making a major announcement regarding a forthcoming Cadence initiative designed to save multiple site businesses millions of dollars, and save finite natural resources in the process.
About Cadence:
Cadence Network, Inc. is an expense management firm that delivers comprehensive expense management solutions for chain store and multiple site businesses in the banking, government, restaurant, retail and grocery industries. Cadence is recognized as an Energy Star Partner by the United States Environmental Protection Agency. The people and products of Cadence allow successful businesses to monitor and manage the third largest costs of doing business – electric, gas, water, sewer, trash, lease and telecommunications. The solutions designed are customized to address the unique business requirements of companies with many sites and many departments managing many vendors across many geographically dispersed locations. Cadence offers accounts payable outsourcing, web based software applications and professional services.
CONTACTS
Cadence Network Contact: Ben Dolan, Cadence Network, Inc. 866-CADENCE (866.223.3623) bdolan@cadencenetwork.com