Lease administration is the process of gathering critical data from leases and configuring them in a centralized system. The activities undertaken help in cost savings, mitigate risks, improve RE portfolio as well as ensure compliance with legal regulations.
Why we need lease administration
Companies with a considerable number of RE portfolios have to manage hundreds of leases spread across various locations and every lease agreement comes with important dates and contractual obligations that need to be updated, organized and managed on a daily basis. For instance, lease renewal & termination dates, expansion clauses, right to use, operating expenses review, CAM audits, managing certificate of insurance and other key elements that will have an impact on the RE portfolio. If this information is overlooked it could lead to unfavorable consequences. This is why lease administration is important – to ensure all critical information is extracted and managed for quick access either for reporting or for prompting an action.
Key takeaway – Have a process in place to ensure that all your obligations are managed and monitored thoroughly and lease administration is what will help you with this.