Case Study 02 · Hardware Tech & R&D · Sunnyvale, CA
The Cosmetic Deception: $850K Secured.
Updated paint, polished floors, and a clean inspection report. Underneath: ADA liability and four dead HVAC units the tenant would have inherited under a Triple Net lease.
The Illusion
A rapidly growing hardware technology firm was expanding into a 40,000 sq. ft. flex space in Sunnyvale under a Triple Net (NNN) lease. The landlord's broker presented a recently "refreshed" building: updated paint, polished concrete floors, and maintenance logs indicating recent HVAC servicing. A standard property inspector signed off on the facility. No one looked past the cosmetics.
The Ground Truth
Base Layer FM deployed forensic-grade diagnostics and uncovered two critical failures masked by the cosmetic refresh. Despite the visual updates, primary function areas, entrance ramps, and restroom facilities fundamentally failed to meet California ADA Title III Accessibility Standards. Under the NNN lease, the tenant would be legally liable for all retrofits. Simultaneously, thermal and mechanical analysis of the "recently serviced" HVAC revealed that four of six rooftop units had fractured heat exchangers and depleted compressors. The prior "service" had consisted of replacing air filters and washing external coils — concealing units with zero remaining useful life running at 40% efficiency.
| Identified Liability | Root Cause / Impact | Financial Exposure |
|---|---|---|
| ADA Restroom & Ramp Retrofit | Non-compliant turning radius, improper grab bar heights, non-compliant slope on exterior path of travel. Significant DOJ enforcement and lawsuit exposure. | $250,000 |
| End-of-Life Rooftop HVAC Units (4 of 6) | Cracked heat exchangers. Operating at 40% efficiency. Immediate replacement required to sustain R&D server and lab loads. | $600,000 |
The Execution
Base Layer FM bypassed the disorganized inspector reports and delivered an actionable CapEx Exposure Summary directly to the CFO and Deal Desk, with every deferred maintenance item and compliance violation categorized with an exact dollar figure. The client's legal team halted the lease signing and pivoted the negotiation immediately.
"Readily Achievable Barrier Removal: In NNN leases, financial responsibility for ADA modifications to primary function areas often defaults to the tenant. If existing facilities do not meet the 2010 Standards for Accessible Design, modifications are legally mandatory." Source: DOJ Checklist for Existing Facilities
Don't let a fresh coat of paint sign your lease.
Under a Triple Net lease, hidden compliance and mechanical failures become your liability the moment you sign. A forensic pre-lease audit puts the real numbers on the table first.