Commercial real estate teams purchase materials, hire contractors & pay leasing commissions and bill back charges like common area maintenance (CAM) as well as utilities. Those line items are allocated to distinct buckets, comply with different taxation rules and generally sit inside multiple entities. Such a mix creates concrete complications. This is where accountants for commercial real estate firms step in.
What are the Accounting Services for Commercial Real Estate Firms?
These dedicated services cover day-to-day bookkeeping practices and a reporting cycle custom-built around specific leases, distinct projects and loans along with partner reporting processes.
- A chart of accounts custom-deisgned for rent, reimbursements & fees and project costs
- Bank tie-outs in order collections to match lease schedules
- Vendor bill coding for repairs and improvements as well as capital items
- Tracking security deposits alongside escrows in the right accounts
- Loan and covenant schedules that agree to lender statements
- Owner statements and management reports that comply with the general ledger
- Tax-ready files for federal & state & local returns
Which Transactions Create Issues in Commercial Property Records?
The most major trouble spots are items that have a similar nature on invoices but have distinct accounting or tax treatment.
| Transaction | Tracking practice |
| Tenant improvements | Capitalization vs expense / placed-in-service dates and depreciation class |
| Common area maintenance | Bill-backs & true-ups and support for tenant reconciliations |
| Construction and development | Job costs by phase, retainage, draw requests and change orders |
| Leasing activity | Commissions, tenant allowances and lease incentive timing |
| Property taxes and insurance | Escrows & pass-throughs and timing across fiscal periods |
| Related-party activity | Intercompany loans and management fees with arm’s-length support |
How Does Outsourced Accounting for Commercial Real Estate Work Month to Month?
These services focus on a repeatable practice for month-end wrap-up — that converts raw transactions into professional documentation. The monthly practice can be outlined below:
- Collecting bank & credit card and loan feeds + rent roll updates
- Coding bills & receipts with rules for capital spending + repairs + pass-through items
- Balancing key accounts — clear suspense items in a quick manner
- Posting accruals for interest & payroll and contract work already performed
- Producing property-level P&Ls & balance sheets and variance notes
- Delivering an action list for owners or controllers or asset managers
When Should You Hire Accountants for Commercial Real Estate firms?
A specialized commercial real estate CPA should really be considered once ownership structures or financing or tax positions start driving decisions. The general points can be listed as follows:
- Multiple properties across separate LLCs or partnerships
- New debt & refinances or lender reporting packages
- Schedule K-1 allocations — partner tax forms — preferred returns or distribution waterfall math
- Asset sales & partial interests or partner buyouts
- Multi-state filings driven by employees or investors or property locations
What tax areas usually matter most for commercial real estate firms?
In general, the core fields are: categorization, the timing element and entity-level preferences that change cash outflows
- Repairs vs improvements rules that influence capitalization
- Depreciation planning — covering cost segregation studies
- Like-kind exchange timing & documentation for qualifying swaps
- Passive activity limits as well as real estate professional status analysis
- The interest limitation rule in parallel to Internal Revenue Code section 163(j) for leveraged deals
- State and city tax exposure — covering nexus created by operations
What should you expect in the first month with Dimov Tax?
Within the context of accounting services for commercial real estate firms, a cleanup with a fast nature should be expected — alongside a reporting setup — that completes your distinct portfolio and specific investor needs.
- Intake: collecting entity documents & prior returns and current ledgers
- Diagnostics: pinpoint miscodings and missing deposits along with stale payables
- Cleanup: fixing reconciliations and reclassifying items and aligning lease schedule support
- Reporting: setting property and entity views — then locking in a monthly close date
- Tax sync: mapping accounts to return lines in order to have a lighter year-end work
Ready to Move Forward with Dimov Tax?
Reach out to us today to discuss your distinct portfolio and specific reporting targets. Our specialized accountants for commercial real estate firms are ready to create a professional plan.
FAQs
Do accounting services for commercial real estate firms track tenant deposits and escrow balances?
Yes. Deposits and escrows are kept separate from operating cash. With such separation, clients can see what’s held for tenants vs what’s spendable.
What should you send to accountants for commercial real estate firms at kickoff?
The documents can be listed as entity docs & prior returns, the current ledger, bank and loan statements and rent roll along with your vendor list.
How do commercial real estate accounting services handle leasing commissions and tenant allowances?
They split leasing costs from routine expenses and follow the right timing in order to match the reports with the lease terms.
What affects pricing for outsourced accounting for commercial real estate?
Major drivers are property count, entity setup, monthly transaction volume and how detailed the reporting should be.