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Hiring a lease administrator? Here’s what you need to know

Are you looking to hire a lease administrator? Lease administration is a critical function of lease portfolio management, so hiring a lease administrator to help you stay on top of the leases in your portfolio is a major decision and certainly one which you want to get right. This blog discusses a few key questions you should ask your lease administrator before you trust them with your leases.

Experience

When interviewing a prospective lease administrator, pay attention to their lease administration experience. Apart from the obvious, such as the number of year have they been into this service line, find out what kind of leases have they worked on. For example, if you are a retail business, then it is better to hire someone who has had experience in retail lease administration.

Another aspect to check in terms of experience is their knowledge of your lease administration platform. Have they worked on the lease administration software that you are using? While it may not be difficult to adapt to a new lease administration software, hiring someone who has already worked on your lease administration software platform and has experience dealing with leases from your industry vertical will drastically cut down the training time and give you better ROI on your new hire.

Scope of work that they have handled before

The next step is to understand what is/has been their scope of work in terms of lease administration. Lease administration is a very broad bucket and includes various lease support services such as CAM audit and reconciliation, notice processing, critical date monitoring, liasoning with landlord, payment processing, etc. (You can learn more about it here) You want to make sure that your lease administrator has the experience handling all of these tasks.

References

Ask your prospective lease administrators to furnish you with client testimonials and referrals. Make sure they are able to give you client names and contact information, so you can verify if the glowing client testimonials they provide are authentic. It is even better if the organizations/clients they have worked with are from your industry vertical.

What about lease abstraction?

While lease administrators usually work with lease abstracts or leases that have already been abstracted, it is good to know if your lease administrator has the skillset necessary to abstract leases. There always exists the possibility of mergers, acquisitions, renewals, amendments and addendums. Having a lease administrator who has strong language and lease interpretation skills will be helpful as they will be able to abstract your leases or update it accurately.

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 a strategic advantage. All client projects are performed in-house.

There’s more to lease administration than just CAM Reconciliation!

Lease administration is an important process helping you stay on top of your lease portfolios. Typically, when we come across the term, lease administration, one of the first things that comes to mind is Common Area Maintenance (CAM) audit and reconciliation. However there’s a lot more to the lease administration process than just CAM reconciliation and lease audits. While CAM reconciliation is one the core tasks and most time-consuming, there are other equally important processes that are a part of lease administration. This blog post sheds light on them. They are-

Renewal notice processing

Renewal is the option to extend the term of the lease after the expiration of the existing lease term. Renewal clauses give the tenant the right to extend the lease term for a specified period of time and at a pre-defined rental rate. However, for the renewal to take effect, the tenant has to provide a notice to the landlord within the time frame specified in the lease. Sometimes, leases have automatic renewal clauses in which case, the lease automatically renews for the next term at a said rental rate if the tenant doesn’t provide a notice to terminate it. In both cases, as we can see, there’s a need to provide notice to the landlord within a stipulated period before the existing lease term expires. Lease administrators should track such critical dates and notice requirements and either alert the tenant about them so they can send the notice or send the notice on behalf of the tenant if the tenant has authorized them to do so.

Estoppel notice processing

Estoppel certificates are usually created by the Tenant for Landlord’s use. If the Landlord is in talks with a prospective buyer for their property, or with a lender who secures the loan with an interest in the said property, they may require the Landlord to furnish an estoppel certificate. The prospective lender or buyer of the property may use in their “due diligence” review of the property. The tenant is usually given a time frame of 10 or 20 days within which they have to submit the estoppel certificate to the landlord. Lease administrators in the tenant’s organization are responsible for timely processing of such estoppel notices.

Security deposit returns management

Security deposit is a lumpsum amount paid by the tenant to the landlord as a guarantee for the performance of lease obligations. Security deposits are usually refundable and returned to the tenant at the end of the lease term, provided there is no damage to the property and the tenant has fulfilled all their obligations under the lease. It is the responsibility of the landlord to refund the security deposit within the timeframe stipulated in the lease after the property is handed over back to the landlord by the tenant. If the landlord fails to return the security deposit on time, they are liable to pay penalty to the tenant along with the security deposit amount. Lease administrators on the landlord’s side are responsible for ensuring the security deposit returns happen on time, so the landlord is not in default and thus not liable to pay any penalty. At the same time, lease administrators on the tenant’s team are responsible for ensuring that the security deposit amount is received on time and is accurate.

Rent increase management

Lease administrators are also responsible for managing the increase in rental rates as per the leases. From the landlord’s perspective, their lease administrators are responsible for keeping track of rent increase dates, reviewing the lease clauses related to the rent increase, calculate the new rent as per those and then communicate the same to the tenants within the stipulated time period. At the tenant’s end, the lease administrator is responsible for reviewing the lease clauses related to rent increase and confirm if the rent amount increase specified by the landlord is correct and process the payment if it is accurate while contesting it if the landlord’s calculations are not accurate.

Subordination and non-disturbance agreement (SNDA)

From the landlord’s perspective, their lease administrators assist the landlord in generating SNDA for property sale or debt financing. From the tenant’s perspective, the lease administrators are responsible for updating their lease administration platform in the event of change of landlord or any other obligation related to the SNDA.

Commencement date letters

Lease administrators manage commencement dates and rent commencement dates as per the lease. From the landlord’s perspective, their lease administrators are responsible for reviewing the lease clauses related to commencement date and rent commencement date, keeping track of them and communicating the same to tenants. At the tenant’s end, the lease administrator is responsible for reviewing and updating the rent/lease commencement letters received from the landlord and updating them in the tenant’s lease administration software and process related rental payments accordingly.

Liasoning services

Lease administrators are also responsible for communicating with tenant/landlord/other parties for lease-related processes and ensuring such processes run smoothly and are taken care of on time.

Outsourcing your lease administration process or looking to hire a lease administrator? Make sure your new lease administrators are adept at all of the above services and not just CAM!

When to Commission a Lease Audit?

Lease abstracts are the backbone of your lease portfolio management process as they capture the essence of leases that otherwise run into hundreds of pages. By summarizing the key financial and non-financial data contained in the leases, lease abstracts make it easy for lease administration teams to stay on top of the lease portfolio. It ensures that lease administrators and lease portfolio managers don’t miss out on critical dates and payments, no legal obligations are violated and no opportunities provided in the lease is missed. However, a lease abstract will be able to serve these purposes only if it is accurate. Relying on a lease abstract that’s ridden with errors or is outdated will do more harm than good. This is where lease audits come into the picture. Lease audit is the process of verifying the accuracy of your lease abstracts and ensuring the abstracts are complete and up-to-date. Here are some reasons to commission a lease audit.

Your leases have been updated

If your leases have been amended, renewed or have had addendums included, it’s time to make sure your existing lease abstracts capture any relevant information from those. At this time, it makes sense to commission a lease audit and review the entire lease abstract in the light of the changes/modification to the original leases and make the necessary updates.

You are migrating from one lease administration system to another

If you are moving your leases and lease abstracts from one lease administration software to another, or even if you are making the big switch from spreadsheets to a more robust lease administration platform, it is a good time to do a lease audit on all your lease abstracts. As you invest in quality lease administration software with a view to streamline your lease management process, you don’t want to start off with outdated or inaccurate data. A lease audit ensures the information you move to your new lease administration system is accurate and useful.

You are are unsure of the quality of the lease abstracts in the first place

Lease audits can be used as a diagnostic and remedial tool if you are not satisfied with the quality of your lease abstracts. If you notice that your lease administrators are consistently having a tough time staying on top of critical dates, payments, notices, etc, and are scrambling for data in the last minute, there could be more to the problem than what meets the eye. If such misses are frequent, it could be indicating a problem at the very core of your lease database–the lease abstracts. Either your lease abstracts are inaccurate, meaning they don’t have the right information, or they may be incomplete in the sense that they may have not captured lease data that is critical to effective administration of the leases in your portfolio. A lease audit will help you figure out the root cause of the problem and fix it once and for all.

Making the most of lease renewals

Renewals are a key component of your lease agreements. Lease renewals present you the opportunity to get out of leasing situations that are not in your favor, while allowing you to reap the benefits of really great lease deals. Renewals also offer scope for renegotiating lease terms and conditions. Missing out on lease renewals can mean termination of the lease, which, when unforeseen can be a huge financial loss for the tenant. In our blog this week, we discuss some best practices that you can adopt when it comes to lease renewals. Following these best practices will ensure you make the most of your lease renewal options and enjoy better ROI on your leases.

Critical date monitoring for renewals

In order to benefit from a lease renewal option, you need to exercise it within the timeframe stipulated in your lease. Make sure you invest in a lease administration software platform which captures important dates such as the last date for exercising lease renewal options, and also generates alerts in a timely manner so you have the time to think through, calculate and take a well-informed decision regarding the renewal. This process ensures you don’t miss out on the opportunity to renew your lease.

A quick lease review

Lease renewals are a great time for a quick lease audit and review. Using your lease abstracts, you can quickly go over the key financial and non-financial clauses of your lease and decide if you should be negotiating on any of those. This is a good time to make amendments or include any addendums to your existing lease. You could also get a financial modeling done on your lease to compute the long term ROI on your lease, helping you determine if the renewal is a good fit for you.

Get assistance if you are overwhelmed!

While it may sound easy, it becomes complicated when you have a large lease portfolio. When you have thousands or even hundreds of leases with different renewal dates and varying terms and conditions, it can get overwhelming. If that sounds familiar, you should reach out to a trusted lease support service provider who can take care of this for you. A lease administration services provider will have a large team of experienced lease administrators who can help you stay on top of your lease portfolio irrespective of its size.

What to consider when investing in a lease administration software?

Investing in a lease administration software is a must to stay on top of your lease portfolio and for efficient ongoing lease management. While there’s no doubt that lease administration software programs are indispensable, things start to get a little tricky when it comes to selecting a lease administration software. Our blog this week discusses the key elements you should consider when choosing a lease administration system.

Compliance

Compliance forms a big part of your lease management process. You need to make sure that your new lease administration software helps you meet the compliance requirements as per lease accounting standards such as FASB ASC 842, IFRS 16 and GASB 87. On the same note, it is important to ensure your lease administration software caters to the different kinds of leases in your portfolio, such as real estate, equipment, vehicles, etc.,

Ease of use

For any tool to be adopted and utilized fully, ease of use is an important factor. The lease administration software should allow you to easily manage every aspect of lease management including lease abstraction, lease audits, critical date monitoring, rent roll, CAM audit and reconciliation, etc.

Reporting and dashboards

Your lease administration platform must be intuitive and flexible. It should support report generation of various kinds, allowing you to make sense of the rich data contained in your leases and lease abstracts, 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.

Data storage and security

One of the questions to seek answers to before you purchase a lease administration software is, “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 a must when evaluating a lease administration software platform.

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? Is the service and support free, or will you be charged? It is very important to get these questions answered to your satisfaction before invest in a lease administration software.

Click here to learn more about the top 10 lease administration software programs of 2022.

Top 10 Lease Administration Software Platforms for 2022

Managing commercial real estate lease portfolios is a challenging task. Especially if the lease portfolio is large and the leases are spread across multiple geographical locations. Lease administration software platforms make it easier for landlords, tenants, property owners, and managers to keep track of their leases efficiently, manage lease obligations effectively, and stay on top of their lease portfolios. In our blog this week, we review the top 10 lease administration software platforms of 2022 and discuss their key features.

MRI Software

Truly the giant when it comes to offering robust lease administration solutions, MRI has more than 52,000 clients across 170 countries. The MRI lease administration software solutions are top-rated in the industry. Top lease administration platforms, AMT Direct, Leverton AI, ProLease, Manhattan Trimble, and Cube Horizon are now all a part of the MRI software thus making its lease management software solution set even more powerful. MRI offers end-to-end lease portfolio management solutions covering both real estate and equipment lease administration, compliance requirements, lease accounting, detailed lease reporting, space management, and CAFM requirements. It is the go-to solution for compliance with the ASC 842/IFRS 16 lease accounting standards and offers dual reporting on the same leases. With automated lease workflows, OCRs for faster data recognition, anomaly detection, and predictive analytics that help you manage your lease portfolios effectively. MRI lease management tools help users make the right business decisions and generate superior ROI on their leases by offering them access to all the data they need, just when they need it. Whether you have real estate or equipment leases, MRI has the answer!

Website Link – https://www.mrisoftware.com/

Yardi property management software

An innovative property management software for all property types, Yardi is a leading lease administration and real estate property management software. Yardi offers 2 innovative property management software programs, namely, Yardi Voyager and Yardi Breeze covering lease accounting, operations, and other ancillary services for both, commercial and residential real estate. Many users regard Yardi to be one of the best lease administration software to manage large lease portfolios. However, customization can be a bit tricky in Yardi and the platform can be a bit slower than some others listed here.

Website Link – https://www.yardi.com/

Visual Lease

Visual Lease is a lease administration software with a twist. The company brands itself as a lease optimization software, meaning, one that helps users optimize their lease portfolio for maximum ROI. Visual Lease offers powerful lease accounting, lease administration, and compliance solutions. Visual Lease is widely used across various industry verticals including services, healthcare, government, construction, manufacturing, retail, and transportation. Visual lease is easy-to-use and has great lease organization capabilities. However, it lacks a project management system, so tracking your lease renewal actions or other capital projects can be challenging.

Website Link – https://visuallease.com/

Lease Accelerator

Lease Accelerator is a complete lease lifecycle automation software that covers both equipment and real estate leases effectively. Lease Accelerator has strong reporting, accounting, and governance modules and allows you to scale easily so you can go from managing a lease portfolio of just a couple of leases to thousands in no time. Lease Accelerator also supports compliance goals allowing your lease administration team to get audit-ready in no time! Currently, there are more than 700,000 leases that are being managed across the world with Lease Accelerator. This lease administration software really stands out for its ease of use, custom reporting templates, ability to bulk import leases, and continuous system updates that ensure the software keeps up with the needs of the modern lease administrator.

Website Link – https://explore.leaseaccelerator.com/

Accruent-Lucernex

Accurent offers potent lease administration and accounting software solutions for real estate and equipment leases across multiple industries including corporate, healthcare, hospitality, telecommunications, manufacturing, retail, metal and mining, utilities, oil and gas, pharma, public sector, and many others. Accurent has also acquired Lucernex, a cloud-based, lease administration and accounting software platform that automates lease administration and accounting effectively for both, real estate and equipment leases. Lucernex, powered by Accurent offers a single, 360-degree view of your entire lease portfolio allowing you to take data driven business decisions that help you optimize your overall lease portfolio ROI. The platform helps you identify key lease portfolio obligations and opportunities easily, offers customizable workflows and makes your lease administration function more process oriented by automating key tasks such as approvals. It also supports the financial reporting requirements as per the new FASB regulations helping you meet compliance goals effectively.

Website Link – https://www.accruent.com/solutions/lease-administration-accounting/lease-administration-accounting-lucernex

Lease Harbor

The USP of Lease Harbor lease administration software platform is the simplicity with which it approaches lease administration. Lease Harbor is an end-to-end lease management platform for equipment and real estate leases that covers lease accounting, lease administration, compliance, task management, and workflow, ERP, and data integration effectively. Lease Harbor supports bulk data uploads, inputs, and updates–a very useful feature if you have a large lease portfolio and offers unlimited custom configurations for lease fields, reporting templates, task reminders, etc. It has a robut search feature that ensures easy and quick access to lease information when you need it at both a bird’s eye view and in-depth levels.

Website Link – https://leaseharbor.com/

Tango Lease

Tango lease administration software is an end-to-end, next generation, lease real estate and facilities management software platform that truly covers everything from strategy to execution. Tango Lease is a feature-rich lease management platform covering both equipment and real estate leases. It offers compliance, end-to-end lease activity management including abstraction, renewals, clause reviews, rent or lease payment processing, expense calculations, lease audits, occupancy, operating expense review and analysis, and more. World’s leading corporations and real estate and accounting firms rely on Tango Lease to manage their lease portfolios effectively and efficiently. Tango Lease is widely used across various industry verticals including manufacturing, telecommunications, technology, retail, corporate, healthcare, and financial services.

Website Link – https://tangoanalytics.com/products/tango-lease/

Lease Query

Lease Query simplifies lease management through its light and crisp lease administration and accounting software that covers all aspects of lease administration and accounting including compliance for all lease types–real estate and equipment. Lease Query offers custom integration with your existing ERP solutions seamlessly, to eliminate manual efforts and to provide you with complete visibility of the financial aspects related to your leases, so you can take data-driven business decisions and optimize the ROI on your leases. The USP of Lease Query lies in its user-friendly interface and a very powerful search engine that ensures any lease data you need is at your fingertip, on-demand. Lease Query is a great, budget-friendly solution for lease management if your lease portfolio is not very large. The company is also known for its great customer service and support.

Website Link – https://leasequery.com/

CoStar Real Estate Manager

CoStar real estate manager is a powerful lease administration platform from the leading commercial real estate services provider, CoStar. It provides end-to-end lease administration solutions including lease accounting, compliance, and real estate lease portfolio optimization. It integrates with other CoStar solutions on the market research and data analytics front to form a very powerful tool to help manage your lease portfolio efficiently. CoStar Real Estate Manager integrates seamlessly with client ERP and accounting systems to give you a consolidated view of your lease obligations. Custom reports are just a click away with the CoStar lease administration and accounting software! The platform is one of the most comprehensive ones in terms of lease administration.

Website Link – https://www.costar.com/

Oracle JD Edwards

Oracle JD Edwards is a popular lease administration software platform in the telecommunications industry. It is primarily used by telecom companies to manage their cell-tower leases. Cell-tower lease portfolio management is complex and has various nuances which are often not seen in real estate leases. Oracle JD Edwards caters to these nuances effectively and is hence a leading lease management platform for cell tower leases. The company offers a complete suite of asset lifecycle management and financial management tools which are leveraged effectively to create a very powerful cell tower lease management system within the Oracle JD Edwards platform.

Website Link – https://www.oracle.com/in/applications/jd-edwards-enterpriseone/

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.