Due Diligence Services and Ongoing Property Accounting

August 13, 2014 | Case Studies

Business Challenge

A regional owner operator of commercial real estate was presented with an opportunity to jointly purchase a mixed use property with another investment company while retaining the post acquisition management responsibilities. Because the property was in receivership there was a very aggressive timeline involved to close the transaction. Due to the nature and requirements of the joint venture, existing accounting systems were not suitable to produce the necessary reporting. As a result the client was challenged to select and configure a new accounting system in a very short timeline, while trying to determine how to perform the ongoing property accounting in compliance with strict reporting requirements.

NOI Strategies Solution

The client chose NOI Strategies to perform the following activities:

  • Select and configure a new accounting system that met the needs of the joint venture.
  • Abstract all of the leases into a new accounting database.
  • Migrate historical financial data into a new accounting system.
  • Produce various financial projections that were used to validate the client’s due diligence analysis
  • Perform the daily accounting for the property post acquisition including but not limited to the following responsibilities:
    • LAP entry and invoicing
    • Cash receipts and application
    • Tenant billing
    • Lease administration
    • General ledger and journal entry responsibilities
    • Monthly and annual reporting packages
    • Annual CAM reconciliations

Results

The transaction went through leveraging NOI’s due diligence support. All data conversion and system configuration activities were completed in less than 45 days, and NOI is currently performing the day to day accounting for the property.

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