Landlords and real estate property managers are driven to maintain strong occupancy rates and revenues; however, they may lag behind benchmarks when confronted with all the administrative details those leases require. Lease renewals, tenant or landlord obligations, and notification dates can easily be overlooked in the fray of daily operations. What’s more, employees with corporate knowledge come and go, and different departments often work in silos which further pull down productivity and profits.
Those organizations that use industry-specific software—especially when customized to the operation’s specific needs—can help boost occupancy rates (and revenues), streamline operations and avoid compliance issues with greater ease. Here’s a look at what’s possible and how your real estate investment or property management firm can benefit from their use, operationally and financially.
Option reminders and notification dates. Many times this information is forgotten or misplaced once the lease is signed and paperwork is filed. With lease administration tools in place, your office will send out notices within proscribed time frames and you’ll never miss another deadline—or risk legal woes by missing legislated or contractual time frames.
Real estate software programs such as those offered by Yardi or MRI keep track of pertinent notification dates, options, and tenant payment history among their many management and accounting capabilities. These tools also send timely reminders not only about lease renewal dates but rent increases as well, so that you properly execute the terms of the lease in a timely fashion, and, at the same time, maintain your firm’s profitability.
The reports generated give you quick access to your company’s financial health, occupancy rates and tenant status and prompt you to take action. All reports are transmitted across the organization to all relevant parties which also saves time for management and office personnel.
To further improve your organization’s operations, our software engineers can customize these out-of-the-box programs to deliver the reports and options that are most meaningful to your organization.
Insurance obligations. Once your system is set up, you simply log in to enter insurance coverage specifications or certifications. The system’s tickler takes the guesswork out of knowing whether or not you have the most updated information on file at all times, such as whether your tenants have active fire or flood coverage in place, and whether or not your office as updated certificates on file (to avoid any undue liability). No more combing through documents or scrolling those massive amounts of files to see if you have all the relevant documentation—it’s all there in the system and easily reported.
Lease options at a glance. With multiple tenants (and often, across multiple properties) it’s imperative that managers know what options or clauses are in their individual leases. Lease administration tools allow you to view this data easily, in organized fields that show ROFO, expansion, rent waivers or discounts and other pertinent clauses. This data can save property managers from potential lawsuits or costly challenges from tenants, and your team can properly implement and maintain the terms that were negotiated throughout the entire term of the lease.
Stacking plans that go a step beyond the usual. Typical stacking plans do not give a totally accurate picture of your building’s true occupancy rate and what space is really available. That’s because they do not usually reflect future lease sign dates that are on the books. But imagine being able to see future lease sign dates, the square footage of each space, lease expiration, and encumbrances on each space—all of which will show your property’s true occupancy rates at any given moment.
FITECH customizes stacking plans to enable property managers to display space that is leased in the near future (and therefore, considered occupied) so you always see true vacancies. This more accurate reporting informs leasing teams and brokers of actual available space, provides improved leasing projections and reduces vacancy rates, all in one convenient module.
For commercial real estate managers and owners, whose lease negotiations can go on for six months or longer, it is especially helpful to be able to see longer-range critical dates such as future lease expirations and lease sign dates so that leasing teams can be more targeted and proactive.
Data consistency across the organization. With today’s sophisticated real estate management and accounting programs, all departments within your organization will see the same data, enabling cross-checking and lower probability of errors (more eyes on the same information). In addition, since everyone—from accounting to leasing to maintenance—is able to pull the same data, goals can be more aligned across the organization.
You may choose to upgrade your entire system to include these tools, implement them separately, or integrate these tools into your current system. FITECH’s IT consultants can help you determine the best course of action depending on your budget and current infrastructure, will integrate your systems as needed, and create the modifications your company needs to operate with the software in ways that are meaningful to you.
So what’s the bottom line impact of these lease administration tools on your real estate company? Simply put, if you don’t know what data you’re missing, you don’t know how many millions of dollars you could be missing as well. With customized lease management software, your leasing team can improve occupancy rates more easily, avoid compliance problems, and work more efficiently with reports that give a more accurate picture of your property’s status at all times.