What is Lease Administration?

(other than lots of paperwork)

What is Lease Administration?

• Lease Review and Abstracting

• Accounting and Processing

• Lease Audits

• Information Management and Reporting

Paraphrased from Wikipedia entryhttp://en.wikipedia.org/wiki/Lease_Administration

What is Lease Administration?

18%

17%

14%13%

13%

12%

6%7%

Allocation of lease administration staff time

Reporting (18%)Abstracting (17%)Accounts Payable (14%)Budgeting/forecasting (13%)Desktop Reviews (13%)Accounts Receivable (12%)Property Taxes (6%)Other (7%)

Figures quoted from Deloitte 2010 lease administration benchmarking survey

Who are Lease Administrators?

Who are Lease Administrators?

• Tenant Side

• Landlord Side

• 3rd Party (for either side)

Who are Lease Administrators?

Tenant Landlord

3rd Party

3 years: 3rd Party (Tenant)

3 years Landlord-Side

3 years 3rd Party(Landlord & Tenant)

Miles Baltrusaitis

Sr. Associate

“In the wake of the corporate scandals

of the 2000s, increased regulations

have created an elevated focus on the

accuracy of financial statements and

the strength of control systems.”

Why Lease Administration is “Key”

- Scott Tibbo, Expense Management Solutions

“In large organizations, lease

administrators are responsible for

ensuring the accurate administration

of millions of dollars each month.”

Why Lease Administration is “Key”

LANDLORD LEASE REVIEWS

TENANT LEASE AUDITS

66% result in cost reduction

~50% result in cost reduction

Figures quoted from Deloitte 2010 lease administration benchmarking survey

How is Lease Administration Done?

How is Lease Administration Done?

Reporting & Auditing

“System” data used to create reports

Reports compared to Leases for Audit

Payment Processing & Accounting

AP / AR CAM / OPEX calculations

Lease Reading, Abstracting and Review

Identify key financial & legal data Enter data points into “system”

Lease Administration: Step Up from Word & Excel

Step Up from Word & Excel

Aww, Do I have to?

Step Up from Word & Excel

INDUSTRY RESISTANCE

“20% of companies performing lease

administration said they use Excel or

Access to handle lease administration,

rather than software specifically

designed for the job.”

Figures quoted from Deloitte 2010 lease administration benchmarking survey

Step Up from Word & Excel

VARIABLES TO DETERMINE “SYSTEM”

1. Feature Requirements

2. Size of the portfolio

3. Integration requirements (Financial Systems)

4. Ease of Use

Step Up from Word & Excel

• FEATURE REQUIREMENTS- Reporting

- How sophisticated/detailed do you need?- Subject to SOX?

- Document Management- Scanning Lease Documents?

- User Efficiencies- Snippets- Templates - Custom Checklists

- Accessibility- Offshoring/outsourcing- Real-time live data sharing over web

Step Up from Word & Excel

• PORTFOLIO SIZE– Dictates Amount of Workflow and Staff– Desktop Apps do not scale well

• Ever try stitching an Options Report from 600 Excel Abstracts?

Step Up from Word & Excel

• INTEGRATION REQUIREMENTS– Synchronize Financial System data– Avoid re-keying to save time/reduce

errors

Step Up from Word & Excel

• EASE OF USE

– Getting Started vs. Gaining efficiency

– What is staff turnover rate?

Owners managing 250 leases or more had 41% staff turnover in 2009.

Tenants managing more than 100 leases had 42% staff turnover.

Figures quoted from Deloitte 2010 lease administration benchmarking survey

HOW DO WE KNOW ALL THIS?

Three Facets of Realogic

Consulting

SoftwareTraining

How realogic is involved

Consulting

Lease Abstracting

Lease Administratio

n

Software Training

Commercial Lease Fundamentals

Current Solutions

Web-Based Abstracting & Administration

Web-Based Budgeting & Reforecasting

Excel Add-In for ARGUS data Analysis & Reporting

Synchronize accounting data with ARGUS Valuation-DCFTM

• One system for entire asset life cycle

• Reuse data in your Accounting System

• Abstract Non-Lease agreements

• Improve accessibility with web distribution

• Increase efficiency with standardization

• Integrated with accounting systems

• Less re-keying improves accountability

• Audit features let you know data origin

• Finish sensitivity and stress assets quickly

• Imports ARGUS-DCF data into Excel workbook of reports

• Analyze individual assets or portfolios

• Improves analytics with reports ARGUS can’t provide

• Synchronize accounting data with ARGUS-DCF

• Available for one-time conversion or ongoing

• Stand-alone or with

Thanks for coming!

http://realogic.net