Clarendon Center: capital project pass-through case study
A public-record mixed-use lease case study showing $38,545.65 in apparent overcharges from lobby renovation soft costs and landlord overhead.
What happened
A retail tenant at Saul Holdings' Clarendon Center received a 2022 reconciliation that pushed capital-project soft costs into CAM. The lease excludes capital work, related design and permit fees, and financing costs, yet the statement still passed through lobby renovation architecture fees, permit expenses, a financing reserve, and two separate overhead allocations including an off-site asset management fee.
Findings from the pipeline
Rule 13: Landlord Overhead Pass-Through
high confidence
$8,686
'Executive Salary Allocation - Regional VP Operations' is classified as landlord overhead, corporate costs such as executive salaries, off-site accounting, and corporate insurance are generally not recoverable from tenants. [scaled to tenant share: 5.9900%]
Statement references
- Executive Salary Allocation - Regional VP Operations
Rule 13: Landlord Overhead Pass-Through
high confidence
$2,396
'Off-Site Asset Management Fee' is classified as landlord overhead, corporate costs such as executive salaries, off-site accounting, and corporate insurance are generally not recoverable from tenants. [scaled to tenant share: 5.9900%]
Statement references
- Off-Site Asset Management Fee
Rule 2: Excluded Service Charges
high confidence
$17,072
'Lobby Renovation - Architectural & Design Fees (CapEx)' is classified as capex and falls within the capital expense pool excluded by the lease. [scaled to tenant share: 5.9900%]
Lease evidence
Operating Expenses shall exclude the following cost pools: capital.
EXCLUSIONS FROM OPERATING EXPENSES
Statement references
- Lobby Renovation - Architectural & Design Fees (CapEx)
Rule 2: Excluded Service Charges
high confidence
$2,905
'Construction Permit & Inspection Fees (CapEx)' is classified as capex and falls within the capital expense pool excluded by the lease. [scaled to tenant share: 5.9900%]
Lease evidence
Operating Expenses shall exclude the following cost pools: capital.
EXCLUSIONS FROM OPERATING EXPENSES
Statement references
- Construction Permit & Inspection Fees (CapEx)
Rule 2: Excluded Service Charges
high confidence
$7,488
'Renovation Financing Interest Reserve (CapEx)' is classified as capex and falls within the capital expense pool excluded by the lease. [scaled to tenant share: 5.9900%]
Lease evidence
Operating Expenses shall exclude the following cost pools: capital.
EXCLUSIONS FROM OPERATING EXPENSES
Statement references
- Renovation Financing Interest Reserve (CapEx)
Lease evidence
- Operating Expenses exclude capital expense pools.
- Architectural, engineering, and permit fees tied to capital work are excluded.
- Financing costs and interest reserves related to capital projects are excluded.
- Tenant pro-rata share used in the statement was 5.99%.
Why this matters
Capital projects rarely appear in CAM as one obvious roof-replacement line. More often they show up as soft costs around the project: design fees, permit costs, and financing reserves. If the lease excludes capital work, those related categories usually fall with it. That is where a lot of expensive pass-throughs hide.
Dispute letter draft excerpt
Request for Review - 2022 CAM Reconciliation Statement at Clarendon Center. The review flagged about $38,545.65 in lobby renovation soft costs and landlord overhead allocations.
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