Is AI redefining Lease Abstraction?

Machine learning has made it possible to develop software that aims at reducing the time spent on abstracting leases substantially. In this blog, we will discuss the potential of automating the lease abstraction process.

Lease abstraction is one of the most critical tasks in CRE. The lease abstraction process involves thoroughly reviewing the lease document and extracting key data points. The data points then need to be audited and stored in a centralized system. The entire process is carried out manually and involves many laborious hours. There are many challenges in this manual abstraction process.

Firstly, the data abstracted is not in a structured format, which will make updating and retrieving key lease data difficult. Secondly, human intervention is not always immune to error. Maximum accounting mistakes are a result of an omission. With the implementation of the new accounting standards, there should be efforts to reduce errors. Thirdly, as the RE portfolio increases, companies are burdened with the need to hire and train additional human resources which will eventually deplete their financial resources.

These are the challenges that AI can quickly fix. AI-enabled lease abstraction software can swiftly scan through the entire lease document and its supplementary documents while extracting the key data points. This improves the efficiency of the lease abstraction process and the accuracy of the abstracted lease data. The software is capable of handling complex lease language as well as handwritten notes usually scribbled in the lease. With in-built rent and date calculators, the company will no longer have to worry about getting real-time access to lease data to make informed decisions. The use of the automation software also ensures a higher level of consistency and accuracy while implementing the regulations as per the new accounting standards. 

With AI the need for human involvement is greatly reduced. This enables companies to move their lease abstraction resources to other tasks that need that require manual intercession. 

Lease abstraction is a repetitive process, and by automating it, companies can rise above the mundane tasks and concentrate on growing their business.