A missed renewal could cost more than the lease admin system that would have prevented it.
So the question is: Can you afford not to have one?
The Challenge: Resource constraints/cost of a system
Missing a renewal or break option on a lease agreement is an absolute no-no for any organisation, and – considering the high potential costs of such an error – rightly so. Yet, despite the consequences, this is a situation that companies around the world find themselves in with alarming frequency.
Some would argue that for a global company contending with the particulars of a large multinational portfolio, occasional oversights are an inevitable “cost of doing business”. The reality, though, is that small portfolios run afoul of this problem too and, regardless of portfolio size, the common denominator tends to be the absence of a robust lease admin system.
Whether the problem stems from multiple independent systems being used across different regions, or an over-reliance on spreadsheets that aren’t updated consistently and lack active management, many companies don’t realise how close they are to that one missed date that will cost them a fortune… until it’s too late.
The Solution: Proactivity – Invest in, and implement a lease administration system
So why don’t companies always engage professional lease administration services? Many are deterred by the cost of the technology and outsourced management (if considered), but three vital points tend to be overlooked:
- It is an investment like any other – and if handling a portfolio of 40+ leases, one of the best a company could make.
- If over several years the system prevents just one missed break or renewal, it can pay for itself.
- Outsourcing of administrative services ensures thorough and professional management of the portfolio; reducing risk while also freeing up in-house resources and labour.
When a company stores all their lease data in a dedicated, centralised location which is easily accessible and fully tracked, a critical data report can be created that allows reminders and alerts to be sent directly to key decision makers; ensuring a lease renewal date or break option is never missed or not considered again.
At CBRE we have assisted companies of every size around the globe choose a lease administration system that best suits them. Having guided hundreds of clients through implementation, ongoing maintenance and management of their lease data, and having worked with more than 15 of the systems available on the market, CBRE Portfolio Services has an unparalleled level of expertise when it comes to lease administration and related technology. Let us know if we can be of service to you.