Retail Real Estate Management in the True Cloud

GAAP in Commercial Real Estate 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.

Go beyond a simple and potentially misleading Cash Flow analysis

First and foremost, in a corporation the cost charged to a manager’s budget is the PreTax P&L, not the Cash Flow. Since performance evaluations and bonuses are based on budgets, it is important to know how the impact of an action (e.g. leasing space) impacts the budget.

Lucernex acquires LseMod

Dallas, TX (October 27, 2009) – Lucernex Technologies, an innovative developer of business intelligence software for real estate management and development, today announced the acquisition of Lease Cost Solutions Inc, the developers of LseMod, the industry leader in lease modeling and financial analysis software for the commercial, industrial and office real estate industry.