Lease portfolio management is best likened to a marathon, yet many organizations approach it as if it were a sprint. Leases often receive proper attention only at the time of signing. Once entered into lease management systems, they are frequently left untouched until renewal or termination arises. This passive approach can lead to substantial economic losses. Here are four reasons why consistent, ongoing lease management is crucial to the success of your business.
You may be overpaying
One of the most important reasons as to why you should be reviewing and updating your lease portfolio is to identify any inconsistencies in CAM expense billing, rent hikes and other operating expenses that the Landlord may be imposing on you.
You may miss out on various benefits that are not obvious
If you don’t service your leases regularly, you run the risk of overlooking important dates and options that could be beneficial to you. Examples include notice periods for termination, renewal, expansion and the right of first refusal. Keeping an eye on these dates and executing your options at the right time can help you get a good deal on your existing leases.
Repetitive errors may be causing you losses
If your initial abstract has errors, or if you don’t reconcile your operating expense, CAM charges, rent increase and other payments periodically, you run the risk of letting the errors embed into your leases. In cases where the rent/operating or CAM charges increase based on the preceding years’ value, you will erroneously end up paying a lot more than you should.
You miss taking advantage of critical dates and clauses
If you don’t service your leases regularly, you run the risk of overlooking important dates and options that could be beneficial to you.
At some level organizations are aware of the importance of ongoing lease maintenance, but fall behind on their lease portfolio management due to lack of resources. In such scenarios, an experienced and trusted lease administration vendor like Mohr Partners can help. We work independently or support your existing lease administration resources to help you stay on top of your lease portfolio management requirements. Plus, our expertise can add value to your internal lease administration process.