The COVID-19 crisis has hit us hard and has taught us many things. While marching into the 2020, businesses were optimistic and focused on maintaining economic growth across almost all sectors. However, with the Covid outbreak, instead of investing in the upswing, businesses are hunkering down to weather the storm. Many businesses are looking to their commercial real estate commitments as a method to reduce costs and save money. While the first thought that comes to mind is to try to renegotiate or vacate unused space, many businesses are losing an opportunity to use commercial lease abstraction and administration services to save money by more effectively managing one of the biggest expenses on their financial statements.
Commercial lease abstraction and administration is a tool frequently used by businesses with many sites. Keeping track of a company’s leasing portfolio gets more and more challenging as it grows. It gets to the point where businesses are forced to make a decision. Do you engage with a seasoned third-party lease administration partner to manage the obligation, or do you recruit extra staff, make technological investments, and devote important resources to managing the leases? Here are some advantages of working with a partner for commercial lease abstraction and administration:
1. Permits Businesses to Concentrate resources on Activities that Generate Income
It may be the responsibility of numerous persons in an organization to track leases. It’s likely that the tracking of leases is not their core responsibility or area of expertise, whether they are the CFO, director of real estate or facilities, legal team members, or an accounting team. Businesses can allocate their internal resources to important business tasks by working with a commercial lease abstraction and administration partner.
2. Review All Operating expense (CAM) Statements
For customers with a portfolio of properties, CAM charges (building operating expenditures) represent a considerable burden. The knowledge required to appropriately examine, and contest CAM charges is one of the most underappreciated areas of commercial lease abstraction and administration. All statements will be reviewed by a partner in lease administration to look for any mistakes made by the landlord. Through our operating expense reviews, we help our clients recover hundreds of thousands of dollars each year, often even paying the cost of lease administration fees.
3. Spend Less by Hiring Offshore Vendors
Businesses may decide not to outsource commercial lease abstraction and administration in an effort to save money, but in practice, doing the task in-house would be significantly more expensive given the time and resources required. As said before, a reputable lease administration partner will offer you a group of knowledgeable real estate specialists. Compared to hiring full-time workers, especially those with the essential real estate knowledge, this is done at a significantly cheaper cost.
4. Reduce the financial and operational risks for big portfolios
Many people overlook the fact that the leasing agreement is not only a legally binding contract but also likely one of the lengthiest one’s ever utilized in business. When a lease is effectively administered, the emphasis should extend beyond just noting the due date for rent and the length of the lease.
Without a commercial lease abstraction and administration staff, there are many hazards that could cost a business a lot financially and operationally. Missing a crucial lease date or misinterpreting a lease clause are frequent reasons why clients contact us for assistance when abstracting a lease. You may be trapped in an undesirable location for a long time if a termination choice is missed. Missing a deadline for reimbursement and incorrectly reading a tenant improvement work letter might have disastrous results. In terms of accounting, failing to process rent on time can cost you up to 10% of your monthly rent.
5. Swap tribal wisdom for a team of real estate professionals.
The dependence on one or two individuals and their knowledge is one of the riskier aspects of internal management. Although these people can be a source of riches, their efforts to progress their jobs will eventually lead to a loss of knowledge. When you work with a reputable commercial lease abstraction and administration partner, you’ll have a team of people with real estate knowledge that are solely focused on your account and the right systems to make sure data is centrally maintained. Since they frequently encounter a number of challenging issues that renters rarely know how to address on their own, having people with this level of understanding on your team can be really beneficial.
6. Structured and easily accessible information
The days of the clumsy, imprecise, and error-prone Excel sheet are long gone. A commercial lease abstraction and administration team can maintain all information organised, current, and accurate with the help of special software solutions. The information is supplied each month in reports that are simple to understand and is always available online.
7. Approachable Team
A reputable commercial lease abstraction and administration partner will be accessible at all times to address your concerns or look over any emerging landlord issues. Despite the fact that our secure database and reports contain all the lease information we offer, the majority of our clients still give us a short call if they have any questions. A lease expert can also offer their insight based on expertise if any lease-related questions come up that need interpretation.
Schedule a appointment with Complete Legal Outsourcing’s commercial lease abstraction and administration team today to outsource all your abstraction related needs by writing to us at firstname.lastname@example.org and we shall get in touch with you with the most suitable options.