RE BackOffice (REBO) abstracted and tagged 6,000+ leases to enable the client to update their decision support system with accurate leasing information for their store locations across the US.
The client is the world’s largest operator, franchisor, and licensor of convenience stores with over 8,000 outlets in the United States and 50,000 plus outlets around the world. In order to aid accurate operational decision-making, the client required key lease terms and clauses that aided the decision-making process to be abstracted from their leases and imported into their Decision Support System. The project called for the abstraction and tagging of approximately 6,000 lease documents (up to 100 fields per lease) and the abstraction of approximately 500 new leases and 600 renewal letters/amendments per year. Most of the leases were on the verge of expiration and therefore, had to be analyzed thoroughly before the impending renewal/expiration. This called for the accurate abstraction of key financial and non-financial data that would aid the decision-making process. The data was required in XML format, so it could be imported into their Decision Support System.
THE CORE BUSINESS CHALLENGE
The client wanted to grow their business and provide additional services through their existing locations. The leases pertaining to the locations contained critical information that would impact their ability to offer the additional services. The client needed these key pieces of information abstracted and imported into their Decision Support System which would enable them to make the right operational decision.
Accomplishing the abstraction of 6,000+ retail leases within a time span of 6 months was a major challenge. Since most of the leases were close to expiration, the abstraction and data import process had to be quick, in order to allow the client to make timely decisions as to whether the leases should lapse or be renewed. The firm time constraints meant the abstraction had to be 100% accurate and on time. The decision support system of the client accepted data in XML format, which is not a format of output commonly provided by lease abstraction companies. Finding a lease abstraction vendor who could offer the output in the desired XML format, on time, accurately and in a cost-effective manner was the biggest challenge for the client.
THE RE BACKOFFICE SOLUTION
RE BackOffice accepted the challenge and created an effective partnership with the client that remained strong throughout the project. As a key part of the solution, RE BackOffice added value to the client’s lease abstraction project through the following actions –
Piloting to understand and clarify exact client requirements
Initially, RE BackOffice began with a pilot batch of 100 leases. The pilot abstraction process helped REBO gain a deeper understanding of client requirements and identify possible inconsistencies/ inaccuracies.
Recommendation to the client for value addition
Based on experience and the understanding gained of the client’s needs in the piloting stage, REBO made recommendations that were welcomed by the client. Key recommendations included:
While many lease abstraction companies often replicate lease language and sections in the abstracts, thus forcing the clients to make sense out of legal language, REBO focused on making the abstract as concise as possible. For this purpose, REBO chose to utilize objective-based abstraction of lease data wherever possible with ‘Yes/No’ types of information filled in. This helped the client gain a faster and deeper understanding of the key financial and non-financial terms—a feature that proved very valuable to the client considering the tight time constraints they faced.
Document tagging & cross-linking
REBO performed document tagging and cross-linking of the abstracted fields to the original lease document. This ensured that the client could access the original clause in one click—a feature that made it easy for the clients to cross-check the abstracted information for accuracy and completeness at any time.
Technology oriented approach to lease project management
REBO deployed the use of our in-house web-based Lease Project Management System– ProjectTrack, to better manage the project so the end result was a well-executed lease abstraction project. REBO also shared ProjectTrack access with the client enabling them to monitor all project elements in real time, such as the number of leases abstracted along with the date of abstraction, name of the lease analysts who worked on them, name of the quality analysts related to each of those leases, quality grading awarded to each lease by REBO’s quality control teams and even the errors identified at the time of quality grading. This ensured 100% transparency and accountability at every stage of the project.
Document management recommendations
The client did not have enough resources to review all lease documents for completeness, which meant missing documents could impede the smooth flow of lease abstraction, and ultimately could negatively impact the targeted timeline. REBO performed a preliminary review of the lease documents for all locations and provided the client with an ‘Exception Report’ which listed all the missing documents. REBO also prioritized its abstraction efforts to finish abstraction of leases for locations with complete documentation first, thus providing the client with ample time to procure the missing documents. This ensured that the lease abstraction was always on track and complete in every aspect.
Commencement of actual abstraction
Upon successful completion of the pilot phase, REBO submitted another batch of 250 lease abstracts in the next month. Thereafter, REBO submitted batches of 1,250 leases every month for the subsequent four months.
REBO’s quality check process
In a bid to maintain 100% accuracy, REBO did not resort to sample checks. Instead, every Lease Abstract was thoroughly reviewed 3 times before it was finalized.
KEY HIGHLIGHTS OF THE PROJECT AND BENEFITS TO THE CLIENT
- 1,000 leases were renewed, saving $30M+ over-committed term of leases
- Document tagging provided the client with instant access to critical lease data
- The project was completed within the allotted timeline
- The client reviewed and certified the project to be 100% accurate in terms of lease data abstracted
- RE BackOffice became a trusted lease abstraction partner for the client with the client making a commitment to award a minimum of 1,000 leases for abstraction to REBO on an annual basis
ABOUT RE BACKOFFICE
RE BackOffice is a premier provider of lease abstraction, administration, and accounting services. A global boutique firm, we provide high-quality services to top-tier clients across industry verticals, covering every type of lease and on any lease platform. All projects are performed in-house. We are proud to be a trusted partner, for 15+ years, to leading retailers, REITs, property owners/managers, and corporate accounts seeking strategic advantage. Whether abstracting a portfolio of leases or providing comprehensive lease administration or accounting services, RE BackOffice is dedicated to consistently delivering high-quality services and optimal ROI to our clients