If you are like most people, you probably think that managing a lease is not rocket science. You sign a contract, pay the rent, and move in, right? Well, not exactly. When it comes to commercial real estate (CRE), lease management can be a complex, time-consuming, and costly process.
That’s why specialized CRE accountants can make a big difference between a smooth and profitable operation and a chaotic and risky one.
In this blog post, we’ll discuss why you need subject matter experts, skilled mediators, and centralized lease administration to effectively manage your lease. We’ll also explain how outsourcing lease administration to a team of real estate accounting experts can reduce your headcount, burden, and costs while ensuring your landlords’ complete compliance to the lease.
What is lease administration?
Lease administration refers to the management of a commercial lease from start to finish. This includes interpreting the lease terms, tracking critical dates, managing rental payments and invoices, reconciling year-end accounting, handling disputes and negotiations with landlords, and ensuring compliance with regulatory requirements. If you think this sounds like a lot of work, you’re right. But it’s also essential for the success of any CRE operation. That’s where specialized CRE accountants come in.
The Role of Specialized CRE Accountants
Specialized CRE accountants are subject matter experts in lease administration. They are the ones who can put landlords on notice that their invoices will be scrutinized, review all additional rent payments and year-end reconciliations, and challenge any discrepancies or overbilling. They are also the ones who can mediate difficult conversations with landlords and avoid conflicts of interest.
Centralized Lease Administration: A Key to Efficiency
Centralized lease administration is another key element of effective lease management. Centralized lease administration means that all your leases are managed from a single location, regardless of their location or type. This can be done internally or externally, depending on your needs and resources. The benefits of centralized lease administration include increased efficiency, consistency, and accuracy of lease data, decreased risk of data loss or duplication, and improved reporting and analysis.
Outsourcing Lease Administration: A Cost-Effective Solution
Outsourcing lease administration to a team of real estate accounting experts can reduce your headcount, burden, and costs. By outsourcing, you eliminate the risk of losing legacy knowledge when an employee leaves the firm. You also benefit from the expertise and experience of specialized CRE accountants who can identify and correct errors, alert you to potential risks and opportunities, and provide customized reports and dashboards. In addition, outsourcing lease administration can free up your internal resources to focus on your core business and strategic goals.
In conclusion, lease administration is a critical function of managing your CRE portfolio whether it’s 2 or 200 locations. It requires specialized knowledge, skills, and tools to effectively track lease data, rental payments, invoices, and compliance. By engaging specialized CRE accountants, centralizing lease administration, and outsourcing the task to a team of real estate accounting experts, you can improve your operational efficiency, reduce your risk and costs, and ensure your landlords’ complete compliance to the lease.
At Landmark, we offer Lease Administration solutions that combine our industry expertise, technology platforms, and customized reporting to meet our clients’ specific needs and goals.
Contact us today to learn more about how we can help you achieve your CRE objectives.
Jonathan has been part of Landmark Advisory Services since 2020 and is an integral part of our Lease Administration Team.