March 1, 2010
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The National Association of Realtors Winter 2010 edition of the RCA Report includes a front page article titled “Technology: Turning time into money”. The article discusses effective uses of technology for real estate professionals and features Lucernex President Joe Valeri and Lx LseMod.
March 1, 2010
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Originally published in the National Association of Realtors RCA Report, Winter 2010
If time is money, then technology is an investment a commercial real estate professional can scarcely afford to neglect. Today, brokers and property managers can produce complex analytical data, transfer the information to an easy-to-read Excel file and present it to clients with a few key strokes. What used to be a laborious, mathematically-inclined and time-consuming process now has been so streamlined by software products that pencil pushing and number crunching are a much smaller part of the job.
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February 21, 2010
Lucernex expert Jim Duport (see Jim’s management summary here) discusses GAAP sublease accounting.
Our interpretation of GAAP sublease analysis according to FASB accounting rules is as follows:
Overview: Start by determining the net present value of all rental costs including write-offs of depreciation and subleasing costs, offset by the sublease income (the NPV write-off). The Income Statement (Profit & Loss statement) is then charged the NPV write-off and it is charged an interest expense based on a declining balance of the NPV write-off, the accretion interest expense. The declining balance is determined by taking the net monthly costs (including sublease income) and the interest expense and deducting that cost from the NPV write-off.
January 31, 2010
Lucernex expert Jim Duport (see Jim’s management summary here) provides this response:
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In essence, GAAP (Generally Accepted Accounting Principals) rent is an averaging of the rent over the term taking into account rent abatement and fixed/known rent increases. The rent cost calculated based on GAAP is then charged/booked to the Income Statement / Profit & Loss (P&L) statement. The P&L statement is what is reported to the Securities and Exchange Commission (SEC) and is used for tax purposes. In many corporations, the GAAP rent is also the cost that is charged to the real estate department’s or end-user’s budget.
What happens if there is free rent and rent increases are based on the Consumer Price Index (CPI), a “CPI GAAP analysis”? Since increases are not a “known” value, it is difficult to apply GAAP to a lease with CPI increases.