The high volume of paperwork and the number of iterations of real estate contracts can be a real challenge for commercial real estate contract management. Several versions of a document saved at different locations and managed manually on-site across different business units can create a very complex paper trail. Lease abstraction services offer a secure, seamless, smart solution to the growing demand of effective management as the commercial real estate industry is set to see phenomenal growth in the next couple of years.
Increasing demand for lease abstraction services
Lease abstraction services will see increasing demand in the coming years as the commercial real estate market picks up. In 2018, global CRE investment volume grew 5% compared to the previous year to US$1,038 billion, according to data from CBRE Research. The US in particular registered a noteworthy performance, accounting for 52% of global transactions and posting a 15% annual growth in investment volume.
This trend in commercial properties is projected to continue in the US, driven by its current strong economy and the latest jobs report exceeding all expectations. Demand for retail and corporate properties especially is expected to grow, which in turn will result in a spike in commercial lease volumes. Managing commercial leases and deriving insights from them is vital for CRE players to ensure smooth operations and for future planning.
How lease abstraction improves commercial real estate contract management
The first step in this process is lease abstraction – offering a succinct summary of the most important elements of a lease in an easy-to-read format. Lease abstracts help CRE property owners stay on top of key data points in commercial leases like rent amounts, expirations, issues with properties, violation of terms, amendments, among others.
However, given the amount of paperwork and legal language involved makes lease abstraction a complex task. Many companies may not have the time, manpower, or skill to hunt for the key highlights within bulky commercial lease documents. Instead, they outsource lease abstraction operations to third-party vendors, who have specialists to take care of these aspects, thus saving CRE companies time and money.
Cenza’s lease abstraction and support services
Our team at Cenza provides high-quality lease abstraction services to support property managers, commercial real estate owners, retail managers, and real estate investment trusts (REITs) in their quest to optimize portfolios and remain compliant. We have experienced and dedicated lease analysts who are well-versed in lease abstraction as well as a broad range of support services across a range of lease types and agreements, including:
Commercial real estate leases for:
- Equipment leases
• Retail properties
• Industrial properties
• Office properties
• Telecommunication towers
- Regulatory/legal documents
- Insurance certification document
- Loan/mortgage agreements
AI and machine learning based tools are transforming commercial leasing, so organisations can focus on developing their commercial real estate portfolio confidant that they have effective tools and processes aligned with their growth ambitions.