CAM Due Diligence for Property Acquisitions
Verify CAM recovery assumptions before you close. CapVeri analyzes the seller's GL data to surface billing errors, under-recovery, and hidden cap exposure.
CAM Assumptions in Underwriting Are Often Wrong
Acquisition teams build pro formas based on the seller's reported CAM recovery ratios, but those numbers are frequently unreliable. Sellers may have miscategorized expenses, missed gross-up adjustments, or failed to enforce caps correctly -- inflating or deflating the apparent recovery rate. Without digging into the actual GL data and lease terms, buyers inherit billing errors that directly impact NOI and asset valuation.
Traditional due diligence relies on sampling: review a handful of tenant reconciliation statements and spot-check a few expense categories. This approach misses systemic issues like incorrect BOMA methodology, inconsistent allocation bases, or expense codes that have drifted between recoverable and non-recoverable pools over time. The result is acquisition models built on assumptions that do not hold up once you take ownership and start your own reconciliation.
How CapVeri Powers Acquisition CAM Diligence
CapVeri lets you run a complete independent reconciliation on the acquisition target's GL data without needing access to their property management system. Request the seller's GL export for the past 2-3 years, upload it to CapVeri, and within hours you have a full picture: what was spent, how it was classified, what should have been recovered, and where the gaps are.
The analysis goes beyond simple expense review. CapVeri compares the seller's implied recovery ratio against what the lease terms actually allow, identifies cap provisions that may compress future recoveries, and flags expense trends that suggest deferred maintenance or cost-shifting. This gives your acquisition team hard numbers to use in pricing negotiations and post-close budgeting.
Key Features
Independent Reconciliation
Run your own CAM reconciliation on the seller's GL data. Compare your results against the seller's reported numbers to identify discrepancies.
Recovery Gap Analysis
CapVeri calculates the theoretical maximum recovery based on lease terms and compares it to actual billings, quantifying dollars left on the table.
Expense Trend Analysis
Review 2-3 years of expense data to spot abnormal trends: deferred maintenance cycles, one-time capital charges misclassified as operating, or cost categories growing faster than market benchmarks.
Cap Exposure Modeling
Model how tenant cap provisions will affect future CAM recovery under your projected expense growth assumptions. Quantify cap exposure before you set your acquisition price.
How It Works
Request Seller's GL Export
As part of your standard diligence package, request the seller's GL expense detail for the past 2-3 years in CSV or Excel format.
Upload to CapVeri
Upload the GL data along with the rent roll and key lease abstracts. CapVeri maps expenses and builds an independent reconciliation model.
Review Diligence Report
CapVeri produces a diligence report showing recovery gaps, expense anomalies, cap exposure, and comparison against the seller's reported figures.
Negotiate with Data
Use the quantified recovery gaps and cap exposure projections in your pricing negotiations. Post-close, the same CapVeri setup becomes your ongoing reconciliation tool.
Frequently Asked Questions
What data do I need from the seller?
At minimum, you need the GL expense detail (CSV or Excel) for 2-3 years and the rent roll with square footage. Lease abstracts with cap and recovery provisions improve the analysis significantly.
How quickly can CapVeri produce a diligence report?
For a single property, expect results within 24-48 hours of uploading complete data. The bulk of that time is human review of flagged items, not processing.
Can I use CapVeri for portfolio acquisitions?
Yes. Upload GL data for every property in the acquisition and get a portfolio-level diligence summary alongside individual property reports. This is especially valuable for REIT-to-REIT transactions.
What happens after the acquisition closes?
The reconciliation model you built during diligence becomes your ongoing reconciliation tool. There is no re-setup or data migration -- just upload the next period's GL export and continue.
Does CapVeri replace a commercial real estate attorney for due diligence?
No. CapVeri handles the financial analysis of CAM expenses and recoveries. You still need legal counsel for lease interpretation, title review, and overall transaction structure. CapVeri gives your attorneys better data to work with.
Related Solutions
Validate CAM Assumptions Before You Close
Upload the seller's GL data and get an independent CAM recovery analysis within 48 hours. Free trial includes a full diligence report for one property.
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