What is Lease Administration?
Lease administration is an increasingly important component of a modern company’s broader real estate management operations. A company that owns or leases multiple office locations needs to stay on top of the obligations of all its leases, to make sure that all payments are made on time, no critical dates pass by unnoticed, and all expenses are identifiable and accounted for.
The core functionality of any lease administration system includes tracking, updating, and analyzing core lease information, such as:
How Do Companies Manage Their Real Estate?
Imagine ABC Company operates out of three offices: a headquarters in San Francisco, a satellite office in New York, and a customer service center in Chicago. Each office they rent has a corresponding lease, and each lease includes a whole set of data, dates, rights, and obligations that ABC Company needs to know to effectively use their space, such as their occupancy and termination dates, the amount of rent they owe, allowances provided by the landlord to improve the space, etc. This information is typically included in the lease document (along with any associated amendments), but looking through a massive legal contract every time you want to remember when your rent payment is due is a time-consuming and unwieldy process.
Most companies therefore extract most of this relevant data from the leases (a process known as abstracting), and stores all the critical pieces of information in a more accessible format. Historically, many companies would simply list out all their leases and lease obligations in a spreadsheet. This works reasonably well for a single lease and a few dates, but it’s easy to see how a system like this can get out of hand quickly. Companies with more than two leases often end up with spreadsheets with dozens of columns and hundreds of rows, making it virtually impossible to identify any information quickly or effectively. Among other limitations, a spreadsheet-based lease management system can’t do any of the following:
- Automatically or intuitively stay on top of the dozens (or hundreds) of critical dates associated with the leases.
- Update data when leases are amended, updated, or otherwise changed.
- Share specific data with other team members, without just sending them a massive spreadsheet with instructions for how to find the data they want.
- Ensure quality control of edits by multiple users, so that a single careless user can’t corrupt the company’s data or mess up a piece of information.
- Link information pertaining to certain lease clauses to the text of lease clause itself, for easy reference and information.
- Auto-generate reports, invoices, or other complex data-rich information.
Request a demo to learn more about how Spacebase can meet your lease administration needs.