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Making the most of your Lease Abstracts with a Lease Management Application

You can leverage your lease abstract to its maximum potential by integrating with a lease management software platform. When it comes to investing in lease management software, you’re spoilt for choice. With so many lease management platforms in the market, picking one lease management software can be overwhelming. Here are a few pointers to consider before investing in a lease management platform. 

How and where the data is stored?

Get a thorough understanding of where your lease data will be stored by the lease management platform and in what format. For example, is the data stored locally, or on the cloud? What are the security concerns and how are they being addressed by the lease management software vendor? Getting answers to these questions is really the first step in evaluating a lease platform.

Reporting

Lease management software platforms can help you leverage the data in your lease abstracts through powerful reporting functionality, thus bringing more objectivity to the critical business decision-making process.

Import and export functionality 

One of the most important elements to consider before investing in a lease management platform is the import-export functionality. It dictates how your data will be shared and in what format. The information from your lease abstracts will be used across various teams in your organization such as Finance, Operations, IT, Accounting, Legal, etc. Before you purchase a lease management software, you need to make sure it is compatible with their data format requirements. 

Ease-of-use 

This is true for any new software purchase and not just lease management platforms. If you really want your investment in the platform to pay off, you want all stakeholders/users to adopt it and ease-of-use is a critical factor determining the adoption rate of any new software. From the lease management software perspective, you need to ensure that it is easy to learn and use in terms of data entry, update, management, and reporting.  Availability of onboarding and robust/effective training modules is a critical consideration for your investment.

Compliance- FASB capabilities

Your lease administration software must contribute significantly to your compliance efforts. The updated FASB, GASB, and IASB requirements involve a lot of calculations and major changes in how leases are treated. Your lease administration software must be able to take the complexities out of these computations and classifications, helping you meet your compliance requirements effectively. Some examples include supporting multiple lease types (beyond real estate, as now even equipment leases are to be accounted for), automatic identification and classification of leases as per the FASB guidelines (Financial/operating/ capital), the ability to integrate with your accounting system to ensure any relevant change in the lease data (such as a renewal) is reflected in your books of accounts accurately. 

Service and support

Investing in a lease management platform is a big decision. You will be using the platform to store critical business information and will need uninterrupted access to it at all times. Hence after-sales service and support become critical components when evaluating lease management platforms. What kind of support does your lease software vendor provide? What is their availability? Are the service and support free, or will you be charged? Getting these questions answered to your satisfaction before you sign the dotted line, is very important.

While your lease abstract will mention the key events/dates/numbers to watch out for, the lease management application offers timely access to those critical data points and also ensures you never lose sight of them by tracking these for your consistently and alerting you on time, so you don’t miss any critical timelines.

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.  

Data Management in Lease Abstraction

 

An important aspect to consider when it comes to lease abstraction is lease data management. This has 3 key elements. First is the data type and formatting, the second, document management, and the third and final element is document audit.

Data type and formatting

Your lease abstract templates should allow for effective data searching and meaningful reporting. The data in your lease abstracts is useful only when it can be converted into meaningful pieces of information (Knowledge) that you can leverage to arrive at the right business decisions. The right lease abstract acts as a powerful lease reporting tool allowing you to engage in data-driven decision-making in a proactive manner.  Data cross-linking, reference, and document tagging are elements that can help you accomplish this goal effectively. 

Document management

Effective document management plays a crucial role in helping you stay on top of your lease portfolio. Once your team is ready to actually get started with the lease abstraction project, the first step is document organization. This involves a systematic arrangement of all lease documents including amendments, side letters, estoppels, and even relevant email communications where applicable. 

Document audit

The next step in this process is to identify the missing documents and data points that are missing as a result of that. Once the document audit is complete, the next step is to scan and upload the relevant documents onto your lease management system. At this stage, it is recommended that you perform a quality check to ensure the documents are legible and if you have used an OCR (optical character recognition) software to digitize them, then the output is accurate. Also, ensure the documents have the right tags and filters. Having the right tags and filters help by improving document accessibility, so you can find what you are looking for, right when you need it.

You can leverage your lease abstract to its maximum potential by integrating with a lease management software platform. While your lease abstract will mention the key events/dates/numbers to watch out for, the lease management application offers timely access to those critical data points and also ensures you never lose sight of them by tracking these for your consistently and alerting you on time, so you don’t miss any critical timelines.

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 post: Lease Abstract Template Definitions

What to extract? How to Extract? Why to Extract?   

Your lease abstract template is the backbone of your abstraction project, simplifying the complexity of your lease documents and scaling to manage the volume of leases in your lease portfolio. You need to ensure that your abstraction template captures all the relevant information. While some core fields such as rent, options, key dates, etc., are needed irrespective of what industry you belong to, there may be fields that are important for your business or industry in particular. Apart from such fields, there may be certain, less common clauses in some leases that must be captured. 

So, the first step to ensuring you are capturing the right data is 

  • Being able to identify what data matters to you 
  • Having a template that caters to your needs by capturing that information 

You can do this by defining the lease abstraction template objectives clearly. 

Defining the lease abstraction template objectives

Lease abstraction objectives can be broadly categorized into four categories. 

Financial

This involves tracking and optimizing every aspect of the company’s portfolio of leased assets that will add value to the entire leased portfolio and can also make a huge impact on the outcome of the financial report. Examples include rent and other payment obligations, Security Deposit, Tenant Improvement allowance, etc,.

Operational

This involves tracking critical lease dates and highlighting potential liabilities, which, if missed could result in serious financial implications to a company’s bottom line. For example, missing notice period, renewal options, last date of rent payment, etc., or, not understanding or accruing a potential lease liability and its obligations such as using the premises for the sale of goods or services not permitted in the lease. 

Compliance 

Whenever there’s a change in regulatory requirements that impacts how your leases and the components therein are shown in the books of accounts, it will result in some changes in your lease abstracts. The most recent example is the FASB/IASB regulations that categorized the leases as operating leases, capital leases, leases with a right to purchase, etc., thus bringing about changes in the way they are accounted for, in effect, requiring the lease abstracts to be restructured to comply with them. 

Emergencies

The COVID-19 Pandemic or Future COVID-like challenges

The COVID-19 pandemic brought to light the need to explore various clauses, which were otherwise, probably not considered important to be included in lease abstracts. An example is when, during the peak of the pandemic a lot of tenants, especially in the retail industry, had to act swiftly to exercise 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. Examples include exercising the Force Majeure clause that may allow the tenant to terminate the lease before the end of the term or allow for rent abatements or suspension in exigencies such as the pandemic.

For your lease abstracts to be accurate and truly serve their purpose, the template has to reflect all information that is relevant to you. This is where a lease abstraction partner with expertise, experience, in-depth knowledge, and perspective of the process can add value by streamlining your lease abstraction process and designing optimal lease abstraction templates.

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.

Amendment Abstraction: Why is it Important?

 

Keeping your lease portfolio updated is not a one-time process. It entails updating your lease abstracts with the information in newly executed amendments, abatements, or deferral clauses.

Learn more in this video

abstraction, lease abstraction, rebackoffice, rebolease

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.

Mind your language: The challenges and nuances of multilingual lease abstraction

 

Retail leases are one of the most complex lease types. They are vast, have very specific clauses which are often not seen in other lease types (percentage rent and right to audit are some examples), and more often than not, retail businesses have multiple locations. The complexities of retail lease abstraction increase if the leases span across different geographical locations.  

If you are a retailer with a lease portfolio that extends beyond the US borders, you also need to consider your lease abstraction team’s/vendor’s capabilities in terms of language translation. Global lease abstraction projects require robust language translation capabilities and the ability to understand the various regional nuances. For example, not all English leases are the same. There will be differences in the language and their interpretation from region to region, such as between the US and UK. So, while the language is the same (English), regional nuances and knowledge of the legal terminologies pertinent to the country come into play when abstracting the lease.  

Also, when approaching multilingual leases, it is generally more economical to abstract the lease in English directly rather than abstracting in the local language and then translating the abstract to English. This is because the cost of translation of the entire lease will be much higher due to the sheer volume of information. Sometimes, it may be tempting to rely on online translation tools as prima-facie they may seem like an economical choice, but they bring along with them, concerns about data security and breach of confidentiality.

It makes sense to partner with a trusted and experienced, global retail lease abstraction service provider to get your multilingual retail leases abstracted. Such a vendor will be able to bring some degree of standardization and uniformity to your multi-location, multilingual leases, even if they vary owing to their geographical locations. 

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. 

Getting started with your Lease Abstraction Project? Here’s what you need to know.

 

You rely on your lease abstracts to make the right business decisions and to stay on top of deadlines and due dates pertaining to your lease agreements. This makes lease abstraction one of the most important processes when it comes to your lease portfolio management. In this blog, we discuss a few things you should consider before you get started with your lease abstraction project.

Know what you are up against

Don’t overburden your team members by underestimating the incremental workload or ignoring knowledge gaps and lack of experience. Thrusting your lease abstraction project on your team without a clear understanding of what is required of them and whether they have the necessary knowledge, experience, time, and skill-sets to accomplish the goal will result in botched up, inaccurate lease abstracts that will serve no purpose and perhaps even negatively impact your ability to make the right business decisions.

Leverage technology wherever possible

When we think of lease abstracts, probably the first image that comes to mind is of a lease analyst scrutinizing your lease contracts. But, did you know that the initial perusal can now be efficiently done by deploying Ai tools? With the foray of Ai into lease abstraction, landlords and tenants alike are leveraging technology to streamline many of the processes involved in lease abstraction. It is cost-effective and also more efficient in terms of time. 

Involve parties that can add value

Apart from leveraging technology, you should also consider involving 3rd parties who can add value to your lease portfolio management process and to your lease abstraction project in particular. This includes lease consultants, lease software vendors, and lease service providers who specialize in various aspects of lease portfolio management such as lease abstraction, lease administration, lease accounting, lease audit, etc. Such entities can bring value to the table for you, right from the start, including Ai technology and the expertise to help you navigate the complexities of the lease abstraction process from day one. 

Having an experienced lease abstraction partner even as you embark on your lease abstraction journey can help you avoid common mistakes, unforeseen pitfalls, and missed opportunities that you may find difficult or costly to rectify at a future stage. 

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.