Behind the Lease: Managing Data to Drive Revenue and Business Strategy
Commercial properties are challenged to balance multiple factors, including occupancy, revenue, and risk, to stay competitive in today’s changing business landscape. One source of the stability that helps strike this balance is the lease. It is fundamental to defining the roles and responsibilities between landlords and tenants and describes the financial relationship between the two. However, the savvy property owner recognizes the need to go beyond the resulting rent roll and understand and access the data included in and behind the lease.
Using technology to mine lease data
To maximize the value of the data contained in the lease, we first need to broaden our perspective of what data is and how it can be used. There are certainly discrete data points in a lease - rent responsibilities, lease durations, and CAM calculations can be easily extracted and distributed. However, wrapped around these numbers and definitions are the narrative terms and conditions that aren’t necessarily viewed as actionable data and that are often challenging to manage, access, and use in decision-making.
Technology can provide the tools to mine this data and drive the corresponding impact behind the lease.
The first step is to structure the data. Structuring the lease data digitally allows firms to extract key terms, clauses and conditions and make the information available to the appropriate members of the organization. For commercial leases in particular, artificial intelligence solutions can digitize this narrative data through the lease abstraction process, improving accuracy, providing transparency, and linking the newly structured data to the source information.
Making the most of lease data
Once the data is collected and stored, the next step is all about getting the right data in front of the right people. A single data point might be relevant in different ways across the organization, so enabling members of your team to access and consume the information is critical. Data points without context can be distracting noise that can interfere with productive decision making, but software can deliver and frame the data so that it’s relevant to specific roles in the organization and enable them to take the appropriate action.
Without access to the data, firms can miss out on revenue-generating opportunities, and lack of visibility into performance can result in unnecessary spending.
Let’s look at a few specific examples:
- Streamline the leasing lifecycle - Commercial property landlords can further leverage lease data to evaluate how specific lease terms are expressed across their portfolios. If there are inconsistencies, the impact of those differences can be evaluated and used to provide insight into prospecting, negotiating, budgeting, determining revenue priorities, and more.
- Evaluate tenant health - In today’s volatile retail environment, gaining a deeper understanding of tenants’ businesses can both mitigate risk and drive revenue-producing decisions. Lease terms will often specify that tenants supply sales data that might impact rent calculations. However, this same data enables the calculation of tenant health ratios which allows leading firms to monitor performance, evaluate risk, and react to trends in a timely manner. Sliced by tenant type, national tenant, or even down to the individual occupant, this data can be used to design an optimal tenant mix that maximizes performance.
- Define the relationship - Commercial leases can vary across hundreds of data points, each designed to guide the relationship between landlord and tenant and deliver a positive outcome for both, while minimizing risk. Terms that outline responsibilities, response times, co-tenancy, and exclusivity must be surfaced to reduce potentially expensive misunderstandings and strengthen the bonds between landlord and tenant.
By using technology to structure data and bring critical lease terms to the surface, commercial property firms can better manage the tenant relationship, identify opportunities, and plan for the future - where the lease will still be the guiding force.
This Week’s Sponsor
MRI Software delivers innovative applications and hosted solutions that free real estate companies to elevate their business. Our flexible technology platform and open and connected ecosystem meet the unique needs of real estate businesses, from property-level management and accounting to investment modeling and analytics for the global commercial and residential markets. For more information, please visit www.mrisoftware.com.
UPCOMING REALCOMM WEBINARS
REAL ESTATE INFORMATION MANAGEMENT - Insight, Analytics, Artificial Intelligence and More - 2/4/2020
Data runs almost every aspect of our lives. Making good business decisions as a real estate organization, whether on a small scale or for an enterprise-wide initiative, requires an ever-deeper understanding of individual assets, portfolios and shifting markets. In order to gain this level of information insight in today's complex, connected world, a sound data strategy based on a high-performance blend of business intelligence, analytics and data science, must be set. This webinar will review best practices on developing a comprehensive data architecture, the integration of internal and external data sources, advanced analytics, and how Artificial Intelligence and Machine Learning can be applied to these processes. Case studies of Real Estate Companies who leverage data successfully to gain actionable insights will be presented.
Chuck Niswonger has over 30 years of successful leadership experience in technology-related roles that range from operating his own consulting company (www.nicenets.com) to directing the IT strategy of a real estate investment management firm to manufacturing and technology-enabled education. Chuck has also been the chair of the Realcomm Investment Management (IM) Advisory Council for the last ten years, managing content selection for the conference educational sessions, IM forums, workshops and webinars.
Julien Ragbeer is a Data Scientist/Engineer in the IT group of Oxford Properties. He is responsible for some of the machine learning based applications in production, analysis of data workflows and pipelines and proposing the use of scalable and innovative solutions that align with business needs. Julien is a proponent of open source software and initiatives.
Rudy Reagin is the Global Programme Lead for Deutsche Bank's Corporate Services. With more than thirty years of experience in IT, Rudy is currently responsible for the application architecture that supports lease administration, facilities management, space management, security operations, and a wide range of business services. In recent years, Rudy has driven a data warehousing and BI project that successfully integrates information from a range of sources to facilitate performance monitoring and decision support.
Kevin is the Chief Operating Officer of NavigatorCRE and oversees global enterprise engagement.Prior to joining Navigator, Kevin’s 16-year career includes positions at Deloitte, EY, and Morgan Stanley. Most recently he served as a Global Technology Strategy Lead at Deloitte, advising real estate developers, operators, and investors, with clients across 4 continents. Kevin is recognized as one of the leading commercial real estate tech executives in the industry and a noted speaker, author and blogger within the growing Proptech sector. He has spoken at conferences around the world on next generation real estate technologies like Machine Learning, Cognitive Automation, and Blockchain.
Andy Birch is an experienced business software professional with a unique blend of marketing, technical, industry, product and sales expertise. Proven success in delivering sales and marketing programs that achieve game-changing results. Particularly strong at taking complex issues and turning them into understandable value propositions for customers and partners.
With over 25 years industry experience, Brett Sample joined Tango in 2014 and has led the effort to design and create the company’s cutting-edge Space Management application. Prior to joining Tango, Brett worked for many of the major IWMS, CAFM and CMMS providers in the market and started SpacePlanFM. At SpacePlanFM Brett provided consulting, implementation and support to clients in over 40 countries and implemented over 200M Square Feet of Space, Facilities and Lease Management.