Lease Abstraction post: RE BackOffice Adds Value to World’s Largest Convenience Store Chain’s Decision Support System

RE BackOffice (REBO) abstracted and tagged 6,000+ leases to enable the client to update their decision support system with accurate leasing information for their store locations across the US.

SYNOPSIS

The client is the world’s largest operator, franchisor, and licensor of convenience stores with over 8,000 outlets in the United States and 50,000 plus outlets around the world. In order to aid accurate operational decision-making, the client required key lease terms and clauses that aided the decision-making process to be abstracted from their leases and imported into their Decision Support System. The project called for the abstraction and tagging of approximately 6,000 lease documents (up to 100 fields per lease) and the abstraction of approximately 500 new leases and 600 renewal letters/amendments per year. Most of the leases were on the verge of expiration and therefore, had to be analyzed thoroughly before the impending renewal/expiration. This called for the accurate abstraction of key financial and non-financial data that would aid the decision-making process. The data was required in XML format, so it could be imported into their Decision Support System.

THE CORE BUSINESS CHALLENGE

The client wanted to grow their business and provide additional services through their existing locations. The leases pertaining to the locations contained critical information that would impact their ability to offer the additional services. The client needed these key pieces of information abstracted and imported into their Decision Support System which would enable them to make the right operational decision.

OTHER CHALLENGES

Accomplishing the abstraction of 6,000+ retail leases within a time span of 6 months was a major challenge. Since most of the leases were close to expiration, the abstraction and data import process had to be quick, in order to allow the client to make timely decisions as to whether the leases should lapse or be renewed. The firm time constraints meant the abstraction had to be 100% accurate and on time. The decision support system of the client accepted data in XML format, which is not a format of output commonly provided by lease abstraction companies. Finding a lease abstraction vendor who could offer the output in the desired XML format, on time, accurately and in a cost-effective manner was the biggest challenge for the client.

THE RE BACKOFFICE SOLUTION

RE BackOffice accepted the challenge and created an effective partnership with the client that remained strong throughout the project. As a key part of the solution, RE BackOffice added value to the client’s lease abstraction project through the following actions –

Piloting to understand and clarify exact client requirements

Initially, RE BackOffice began with a pilot batch of 100 leases. The pilot abstraction process helped REBO gain a deeper understanding of client requirements and identify possible inconsistencies/ inaccuracies.

Recommendation to the client for value addition

Based on experience and the understanding gained of the client’s needs in the piloting stage, REBO made recommendations that were welcomed by the client. Key recommendations included:

Objective-based abstraction
While many lease abstraction companies often replicate lease language and sections in the abstracts, thus forcing the clients to make sense out of legal language, REBO focused on making the abstract as concise as possible. For this purpose, REBO chose to utilize objective-based abstraction of lease data wherever possible with ‘Yes/No’ types of information filled in. This helped the client gain a faster and deeper understanding of the key financial and non-financial terms—a feature that proved very valuable to the client considering the tight time constraints they faced.

Document tagging & cross-linking
REBO performed document tagging and cross-linking of the abstracted fields to the original lease document. This ensured that the client could access the original clause in one click—a feature that made it easy for the clients to cross-check the abstracted information for accuracy and completeness at any time.

Technology oriented approach to lease project management
REBO deployed the use of our in-house web-based Lease Project Management System– ProjectTrack, to better manage the project so the end result was a well-executed lease abstraction project. REBO also shared ProjectTrack access with the client enabling them to monitor all project elements in real time, such as the number of leases abstracted along with the date of abstraction, name of the lease analysts who worked on them, name of the quality analysts related to each of those leases, quality grading awarded to each lease by REBO’s quality control teams and even the errors identified at the time of quality grading. This ensured 100% transparency and accountability at every stage of the project.

Document management recommendations
The client did not have enough resources to review all lease documents for completeness, which meant missing documents could impede the smooth flow of lease abstraction, and ultimately could negatively impact the targeted timeline. REBO performed a preliminary review of the lease documents for all locations and provided the client with an ‘Exception Report’ which listed all the missing documents. REBO also prioritized its abstraction efforts to finish abstraction of leases for locations with complete documentation first, thus providing the client with ample time to procure the missing documents. This ensured that the lease abstraction was always on track and complete in every aspect.

Commencement of actual abstraction
Upon successful completion of the pilot phase, REBO submitted another batch of 250 lease abstracts in the next month. Thereafter, REBO submitted batches of 1,250 leases every month for the subsequent four months.

REBO’s quality check process
In a bid to maintain 100% accuracy, REBO did not resort to sample checks. Instead, every Lease Abstract was thoroughly reviewed 3 times before it was finalized.

KEY HIGHLIGHTS OF THE PROJECT AND BENEFITS TO THE CLIENT

1,000 leases were renewed, saving $30M+ over-committed term of leases
Document tagging provided the client with instant access to critical lease data
The project was completed within the allotted timeline
The client reviewed and certified the project to be 100% accurate in terms of lease data abstracted
RE BackOffice became a trusted lease abstraction partner for the client with the client making a commitment to award a minimum of 1,000 leases for abstraction to REBO on an annual basis

To learn more about our retail lease abstraction services, please visit our dedicated page for Retail Lease Abstraction.

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ABOUT RE BACKOFFICE

RE BackOffice is a premier provider of lease abstraction, administration, and accounting services. A global boutique firm, we provide high-quality services to top-tier clients across industry verticals, covering every type of lease and on any lease platform. All projects are performed in-house. We are proud to be a trusted partner, for 15+ years, to leading retailers, REITs, property owners/managers, and corporate accounts seeking strategic advantage. Whether abstracting a portfolio of leases or providing comprehensive lease administration or accounting services, RE BackOffice is dedicated to consistently delivering high-quality services and optimal ROI to our clients

Lease abstraction, Lease Administration, News
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June 23, 2021
by ADMIN

LeaseAccelerator and RE BackOffice Announce Partnership

PITTSBURGH (PRWEB) JUNE 22, 2021

LeaseAccelerator, a leading lease lifecycle automation software provider, and RE BackOffice, America’s leading provider of lease services, announced their partnership today. This partnership allows both LeaseAccelerator and RE BackOffice to add value to each other’s client base with their product and service offerings and thought leadership.

Backed by over 15 years of experience, RE BackOffice is recognized as a global, trusted, and comprehensive provider of lease abstraction, administration, and accounting services, catering to top-tier clients across various industry verticals including retail, corporate, tower, healthcare, REITs, property owners, managers, etc. 7-Eleven, Sleepys, Crown Castle, CBRE, H&M, and JLL are a few of the many leading brands served by RE BackOffice. LeaseAccelerator offers a powerful lease lifecycle automation solution that is used by the public, private, and government organizations around the world, including Carnival Corporation, Dow Chemical, OSF HealthCare, and HP.

“We are excited about this opportunity to partner with LeaseAccelerator. Working together, we can offer our clients a comprehensive solution to lease portfolio management and lease accounting compliance,” said Holly Khera, CEO, RE BackOffice. “When we thought of forming a partnership, we sought a company that could match our wide range of services and had the kind of standing that RE BackOffice has across various industry verticals. With LeaseAccelerator as the only provider in the market to offer a complete lease lifecycle automation solution, they were a natural fit for this partnership.”

“With the deadlines for ASC 842 and GASB 87 lease accounting standards coming up this year, private companies and government organizations need expert advice and services to streamline their adoption. By combining RE BackOffice’s proven lease abstraction and administration services with LeaseAccelerator’s decades of lease lifecycle automation expertise, we remove cost and risk from the adoption process across real estate and equipment leases,” according to Michael Keeler, CEO, LeaseAccelerator.

About RE BackOffice

About LeaseAccelerator

LeaseAccelerator provides Lease Lifecycle Automation software that ensures long-term compliance, improves operational efficiency, and frees up cash flow. Thousands of users rely on our secure Software-as-a-Service (SaaS) platform to manage 800,000 real estate and equipment leases valued at $200 billion. LeaseAccelerator offers a platform for growth with asset-level accounting, reporting, and governance; in-app help; and an integrated, competitive leasing marketplace fueled by a global network of more than 500 lessors. Learn more at www.leaseaccelerator.com

How RE Backoffice assisted America’s Largest Provider of shared Wireless Infrastructure manage their active Tower Agreements better after a Merger

The 6-month long project involved abstracting, standardizing, and updating key data points from the tower licenses acquired as a part of the merger, into the client’s database.

WHO WAS OUR CLIENT?

The client was the nation’s largest provider of shared wireless infrastructure, collaborating closely with wireless carriers, communities, governments, and local property owners to provide access to wireless telecommunication infrastructure. The client manages and provides telecom site services to approximately 40,000 cell towers comprising approximately 91,000 installations and has a key presence in all the major markets in the US, with approximately 71% of their towers located in the top 100 markets.

WHAT DID THEY NEED?

The client had recently acquired another leading telecom company and approaches to managing the active tower license agreements were very different between the two companies. The client wanted the critical information in the licenses of the newly acquired company to comply with its existing approach. The client already had a database and were expanding it to include key data points from the newly acquired licenses. These key data points related to the licenses acquired as a part of the merger had to be abstracted and updated in the client’s database. The key data points included accurate information about the validity of the communication tower permits and information on the expiration and renewal dates of the licenses related to the communication towers located across the United States.

This was accomplished in two phases, each phase treated as a separate phase:

First, where they wanted 10,000 cell tower permits analyzed, abstracted, verified, and updated in their native cell tower permit management platform and;
Second, they wanted RE BackOffice to abstract 10,000 cell tower licenses and their related service level agreements. The timeframe for the first project was 90days, while the second project was to be completed in 5 months.

PROJECT HIGHLIGHTS

How RE Backoffice added value to the client

RE BackOffice deployed a team of 50 experienced lease analysts on the project
For ease of communication, there was one dedicated project manager who acted as a single point of contact for the client. In their absence, a dedicated assistant project manager took over the role to ensure the project progressed smoothly, without deviating from the desired quality and timeline
To ensure the client’s quality goals are met effectively, RE BackOffice put an objective, 3-tier quality control process which had a team of senior analysts verifying 100% of the output
The documents provided by the client weren’t organized as per the cell tower sites. As a part of the document management optimization process, RE BackOffice scrutinized each document to identify the cell tower it represented and uploaded them in the client database for the concerned business unit
RE BackOffice custom-built ad at a platform to suit the specifics of the client’s project. This platform consisted of all the data fields that the client required abstracted
RE BackOffice’s team would update the abstracted data onto the platform which then allowed them to export the abstracts as a single excel file—the way the client wanted
RE BackOffice also identified the patterns linking the Master Level Service Agreements (MLAs) to the Service Level Agreements (SLAs) which played a key role in shrinking the timeline of the project by almost 30%

END RESULTS

RE BackOffice successfully completed the project within the said timeline and with 100% accuracy and helped America’s largest provider of shared wireless infrastructure,

Proactively conduct analysis on upcoming renewal options and/or final term end dates and respond in a timely manner with the potential to prevent unforeseen future terminations
Ensure customer retention and satisfaction
Communicate accurately and efficiently with their customers
Anticipate change and associated short/long term impacts and take the necessary steps well in advance
Organize their cell-tower licenses, permits, and other related documents better, which, in turn, improved their overall operational efficiency on the lease management front

To learn more about our tower lease abstraction services, please click here or download our Tower lease abstraction brochure.

Picking the Right Lease Abstraction Vendor

Lease abstracts are the backbone of your lease portfolio process. Abstracting your leases in-houses and staying on top of them always as amendments and addendums are signed, can be challenging. While outsourcing your lease abstraction process to a trusted lease abstraction service provider is a great idea, there are a few things to consider when doing so.

Learn More in our recent video.

https://youtu.be/WT0PJ8RLlLc

Amendment abstraction: Why is it important?

You know the importance of staying on top of your lease portfolio, which is why you have abstracts of all your leases. However, keeping your lease portfolio updated is an ongoing activity and not a one-time project. Over the years, there are bound to be updates and changes (amendments and addendums) to your existing leases that need to be carefully reviewed and captured in your lease abstracts. The need to stay up-to-date on lease amendments came to light during the peak of the COVID-19 pandemic last year, when a lot of retail tenants had to quickly explore the options in their leases that offered them some respite as their finances hit rock bottom due to lockdowns and shelter-in-place restrictions brought on by the pandemic.

But what’s the best way to ensure your lease abstracts reflect the latest amendments and addendums? Even if you already have an in-house lease administration team, they would be too busy managing your lease portfolio on an ongoing basis. Diverting their time and energy to something as mundane as amendment abstraction and updates doesn’t make sense. Plus, amendment abstraction is a one-time project. You won’t need to do it again until you sign new amendments, so bringing new staff on board to handle the temporary assignment is not viable either.

Hence it makes sense to outsource your amendment abstraction work to a trusted lease abstraction vendor. Amendment abstraction goes beyond just scrutinizing amendments and addendums and extracting key information out of them. Amendment abstraction may involve going through any supplementary document such as side letters, email correspondences, notices, etc., that may impact the key terms of your lease. An experienced lease abstraction vendor will be able to identify these key elements, summarize them and enter those into your lease management system to ensure your records are up-to-date.

Outsourcing amendment abstraction offers you an extra hand to update your lease management system with all the changes included in your newly executed amendments, abatements, or deferral clauses and speeds up the process while allowing your in-house lease management team to focus on the more important lease administration activities.

Rebolease.com, powered by RE BackOffice, Inc., is a premier provider of lease abstraction, administration, audit, and accounting services. Headquartered in Pittsburgh, PA, we are a global boutique firm, providing high-quality services to top-tier clients across industry verticals, covering every type of lease and on any lease platform. We are proud to be a trusted partner, for 15+ years, to leading retailers, REITs, property owners/managers, and corporate accounts seeking strategic advantage. All client projects are performed in-house.

Whether it is one clause, one amendment, or a whole lease agreement, we can do it for you. Please contact us today to learn more.

Lease abstraction, Lease Administration, Lease Audit
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May 20, 2021
by ADMIN

Lease Administration post: Are your tax pass-throughs correct?

Real estate taxes are one of the most common elements of operating expenses that the landlord passes on to tenants. However, did you know that you could be paying much more than your actual share of real estate taxes for the premises you leased? In our blog this week, we talk about four kinds of mistakes your landlord could be making as a result of which you may be ending up paying more than what you owe.

Tax Refunds

When the landlord levies property taxes on tenants as per their pro-rata share, they should also credit any tax refunds received to the tenants’ accounts accordingly. However, sometimes, landlords may fail to credit the tax refunds or make errors in refund pro-rata calculations that tenants need to watch out for.

Not pursuing tax certioraris

The landlord must assess the taxes levied upon them every year to ensure they are in accordance with the local real estate laws. Tax certiorari allows landlords to challenge the real estate tax amount levied upon them. However, many landlords may overlook this step as they know their tenants will share the tax load anyway as per the lease agreements.

Including personal taxes

Landlords may erroneously include their personal taxes such as the tax on personal property or tax on income from a rental property in the real estate tax calculations for the leased premises, thus passing it on to their tenants.

Tax professional’s fees

Your landlord may incorrectly bill you for the expenses they incur when they hire a tax professional to work out their real estate taxes. While, as a tenant, you may be obligated to pay your share of the real estate tax as stipulated in your lease, the clause most likely won’t cover tax professional’s fees, which means, sharing the fee as a part of the tax pass-throughs would be incorrect.

Tax pass-throughs are just one of the many items in operating expenses that need to be audited by tenants to ensure they are not being overcharged. A lease audit that covers all elements of CAM charges and operating expenses is a must on an annual basis to ensure you, as a tenant, don’t pay more than what’s due.