Commercial Real Estate Leader Outsources Its Lease Abstraction, Lease Administration to Realogic to Help Stretch Its Resources, Maximize Its Returns
Business Challenge
One of the world’s largest privately held commercial real estate investors and managers sought to standardize and improve the lease abstraction and administration process for its multi-million square foot mixed asset portfolio with the goal of making the process more efficient.
The high-profile CRE leader wanted to leverage a lease abstraction services provider who could deploy industry best practices across multiple asset types. Furthermore, they wanted a provider with the proven ability to project manage initial lease abstracting and ongoing lease administration for several commercial properties and funds.
Realogic’s Unique Commercial Real Estate Capabilities
The well-known company ultimately chose Realogic for the assignment due to our unique lease abstraction and lease administration capabilities, including:
- Our proven ability to administer leases for large commercial real estate portfolios and a wide range of assets, including office, retail, industrial and medical office
- Our diverse system expertise, including rAbstract, JDE, Yardi, and MRI
- Our deep knowledge of commercial real estate leases
- Our expert understanding of system and data flow architectures where the data serves multiple end users and applications like critical date management, recovery true-ups and estimates and leasing and option management.
Phase I: Understanding The Client’s Needs
Realogic kicked off the assignment by meeting with the client’s key stakeholders to understand the scope of their portfolio, their desired abstracting checklist, and their internal data flow and reporting requirements.
rAbstract Lease Abstraction and Lease Administration Software
The client chose to have Realogic abstract into rAbstract, Realogic’s proprietary software for abstracting and administering commercial property leases and other essential documents. The use of rAbstract allows the client to have:
- 24/7 access to all reports, such as lease abstracts, rent rolls, summaries of options and encumbrances, and critical date reports
- 24/7 access to all uploaded documents, such as leases and amendments
- Email notifications of upcoming lease critical dates
- A central repository for abstracted data
Phase II – Initial Lease Abstracting
Leveraging Realogic’s technology stack and seasoned staff, all leases, amendments, and other lease documents for each tenant were abstracted based on the agreed upon checklist.
Phase III – On-Going Abstracting Services
All new leases, amendments, and other documents are forwarded to Realogic upon execution, and Realogic abstracts each document according to the agreed upon scope of work.
Additionally, each document is uploaded to rAbstract to maintain the continuity of information between documents and lease abstracts.
Recurring Monthly Project Management Services
To effectively administer assets, Realogic and our client communicate monthly to address the following:
- Resolve tenant status issues for new or expired leases
- Review and discuss various critical dates report items
- Reconcile square footage, including ongoing stacking plan square footage reconciliation
- Rent roll audit/comparison to accounting rent roll
- Request and follow up on potential missing documents and outstanding issues
As-Needed Miscellaneous Services
In addition to the regular on-going commercial real estate lease administration services, Realogic performs miscellaneous services such as assisting with estoppels, periodic abstracting of additional abstract checklist items, and helping with one-off projects as needed.
Results
By trusting their lease abstraction and lease administration to Realogic, our client can focus their time, attention and leasing and property management resources elsewhere, which helps them maintain their staffing levels, control their costs and maximize the returns on their commercial real estate assets.
“I have worked directly with Realogic for the past decade and would characterize their work as outstanding. Their consultants are well-trained and are extremely knowledgeable about all aspects of commercial real estate, especially lease abstraction and lease administration.” — Sr. Vice President, Property Management.
More On Commercial Real Estate Lease Administration
If you’d like more information on commercial real estate lease administration, Realogic’s expert consulting team has published a series of blog posts on lease administration best practices.
The first installment is on subleasing, an especially pertinent topic, given the office sector’s current woes.
The second is on administering encumbered space.
The third is on managing letters of credit and storage space. Those might seem like minor concerns, but, if not administered properly, they can cause very costly problems for building owners and managers.
In addition, there’s a post on lease administration for troubled assets, another timely topic given what’s happening with the office sector.
If you’d like more information on Realogic’s administration or lease abstraction services, visit the lease administration or lease abstraction pages on our website. Or, contact us at 312-782-7325 or info@realogicinc.com