Add lease expenses to buyout diligence
Give lease expense issues their own deal schedule.
Tie each issue to a site, year, clause, and bill. Then name its deal use and post-close owner.
Missing support stays open. It does not force a model change.
Deloitte's real estate guide tests workpapers against leases and other records. Its scope is owner-side work.
Adapt the evidence list for the target as a tenant.
Set the site scope
Start with the target's leased locations.
Ask the deal lead which sites matter. Do not invent a dollar cutoff.
For each chosen site, record:
| Field | Entry |
|---|---|
| Entity | Lease party |
| Site | Address or site code |
| Lease | Signed file and changes |
| Period | Statement year |
| Landlord | Bill issuer |
| Deal owner | Named team lead |
| Post-close owner | Named company lead |
Keep landlord property costs in their own lane. Keep target company costs apart.
Send the first request
Add lease expense files to the first request list.
Request these records:
- Signed leases and changes
- CAM statements for chosen years
- Any landlord cost support on hand
- General ledger entries for each bill
- Notice and delivery records
- Open dispute letters and replies
- Credits or later bill changes
Mark each file as received, missing, or not requested. Do not treat silence as no dispute.
A&M's PE roadmap sets a real estate base before close. This request helps build that base.
Build the diligence schedule
Use one row per site and statement year.
| Field | What to record |
|---|---|
| Clause | Lease section and page |
| Charge | Statement line and amount |
| Test | Cap, share, fee, or other rule |
| Source state | Complete or named gap |
| Open issue | Exact review question |
| Deal use | Model, agreement, or no change |
| Firm owner | Named reviewer |
| Post-close owner | Named company lead |
Legal meaning stays with counsel. Accounting use stays with the deal team.
Test six evidence areas
Keep each test narrow.
Charge scope
Compare the bill's charge types with signed lease words.
Do not decide legal meaning from a bill label.
Caps and fee math
Copy the cap or fee rule. Record the source values used in the test.
Share method
Record the stated area and pool. Do not guess missing property data.
Statement history
Track each statement year and delivery record. Keep unknown dates open.
Open disputes
Request sent notices, landlord replies, and later bill changes.
Ledger match
Compare target records with each landlord bill. Send accounting gaps to the deal team.
The KPMG portfolio paper calls for sponsor and company alignment. The schedule gives both teams the same evidence path.
Route each open issue
Give every row one deal state.
| State | Meaning |
|---|---|
| Supported | Source files answer the test |
| Open | A source or decision is missing |
| Counsel review | Legal meaning needs review |
| Post-close | The action moves past close |
| Closed | The deal team records its choice |
Do not use Supported to mean confirmed value. It only means the test has support.
Walk one sample issue
This is a made-up deal example. The company names are not real.
Bayview Labs leases two sites. The deal team chooses one site for this sample.
The lease and CAM bill are present. The landlord support file is missing.
| Item | State | Deal use | Owner |
|---|---|---|---|
| CAM support | Open | Separate model case | Deal lead |
| Rights text | Counsel review | No change yet | Counsel |
| File request | Post-close | Request support | Company lead |
The missing support does not prove an error. It creates an open diligence item.
The model use is a team choice. This sample predicts no deal change.
Carry work past close
Do not leave open rows in a closed deal folder.
Copy each post-close row into the company plan. Keep its source links and owner.
Hand off the diligence row
The diligence schedule is the working record. The deal lead owns its next choice.
Give post-close rows to the company lead. Track them in the 100-day action map.
Set proof states for later work.
Use the lease cost charter. Rank ready files in the portfolio review queue.
The transaction advisor hub holds other deal guides. The private equity advisor pillar joins the four records.
Another firm may own the next step. Find it in the Practice Growth hub.
Where CAMAudit fits
Private equity advisors can add this step to buyout diligence.
Your firm selects each diligence row. CAMAudit checks its supplied files.
It runs fixed CAM math where the source permits. The branded CAM audit cites each source line.
Your firm reviews and signs the work. The deal lead records the model choice.
Tax, legal, and QoE teams keep their own scopes.
After close, the record may support a dispute letter draft. Your firm reviews the words.
It is not legal advice. Have counsel review before sending.
Put deal duties in the service line guide.
Ready to add this work to your firm? Get started.