It's no secret it becomes increasingly difficult to manage a growing lease portfolio. And eventually, it will become impossible to effectively manage it internally. So you are left with a difficult decision. Do you invest in CRE software? Do you hire an in-house real estate team? Or do you outsource the task to an experienced third-party lease administration partner?
Here are five of the top benefits of outsourcing lease administration services.
1. Allow teams to concentrate on revenue-generating operations
Keeping track of leases is a responsibility that could fall under a wide variety of roles. Whether it’s a CFO, a member of the legal team, or the accounting team, chances are tracking leases is not their primary job function—nor their expertise.
A lease administration manager lets your team focus on their primary responsibilities that help your business generate revenue.
2. Review of all operating expense (CAM) statements
Building operation expenses (CAM charges) are a significant expense for companies with a real estate portfolio. The skill required to appropriately assess and contest CAM charges is one of the most underestimated values of lease administration services. All statements will be reviewed by a lease administration partner to look for any erroneous charges made by the landlord. This can save hundreds of thousands of dollars for clients, often totally offsetting the costs of lease administration fees.
3. Save money by outsourcing the work
Companies may opt to manage their leases on their own in order to save money, but the time and resources required to do the role efficiently often cost far more than hiring a third-party service.
Outsourcing a competent lease administration partner costs less than hiring full-time staff, especially full-time employees with the necessary real estate knowledge.
4. Minimize the financial and operational risks that come with managing a large portfolio
Many people overlook the fact that a leasing agreement is not only a legal contract but also one of the most lengthy contract forms in business. When correctly managed, the focus of a lease's administration should extend beyond the rent obligation and lease term dates.
There are a number of dangers and risks that a company may face if it does not have a lease administration specialist. These risks can be extremely costly. Missing a critical lease date or misinterpreting a lease clause are common reasons for clients to seek assistance when abstracting a lease.
For instance, a missed termination option can trap you into an unwanted office space for a significant amount of time. And missing a repayment deadline due to a misinterpretation of a tenant improvement work letter can also be costly. Not to mention, on the accounting side, failing to process rent on time can result in a penalty of up to 10% of your monthly rent.
5. Get expert knowledge from experienced real estate professionals
The knowledge and reliance placed on one or two people is one of the riskier aspects of in-house administration. While they may be intelligent individuals, that’s no replacement for having tried and true real estate experience.
When you work with a professional lease administration partner, you'll get a real estate expert dedicated to your account, as well as the necessary systems to ensure information is well-organized and easily accessible.
Learn more about lease administration services in Denver
If you’re interested in learning more about lease administration services in Denver, reach out to us today at Lavoro Consulting. We’re here to help you cut costs, monitor critical dates, and negotiate the best possible terms for you and your team.
Contact us today to learn more.