A lease management system is what helps facility managers (FMs) and/or business leaders track and analyze key lease data. It also provides other information to improve their overall business operations.
With the right system, companies can easily manage all aspects of their real estate portfolio in one place. This is whether they’re renting one small office space, or responsible for complete enterprise facility management.
In this article, we explore lease management systems, including what features to look for in your real estate software solution.
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A lease management system refers to how companies (or individuals) track critical data about leased/rented corporate real estate, and leased equipment where applicable.
Ultimately, the goal of any lease management system should be to simplify the often complex task of real estate management. This is how a company ensures it’s always paying the rent on time. This is in addition to anticipating future expenses and discovering cost-saving opportunities.
A lease management solution is typically handled with lease management software. This is sometimes referred to as lease administration software or commercial lease accounting software. Some people may also use property management software. Good lease management software will house all relevant lease documents, including lease contracts, lease details, and critical dates. As we’ll explore further below, it can also help companies leverage real estate data to their advantage.
Lease management and property management and sometimes be confusing.
To clarify: lease management is how a company tracks its real estate portfolio. Not only stay on top of rent payments, but also maximize its overall asset management.
Property management, on the other hand, is handled by a separate company—the property owner. Property managers are the people who handle rent collection on behalf of the property owner. They also manage building maintenance and functionality.
Like we’ve covered, lease management software is the critical system that companies can use to track any leased assets. It’s most commonly used for rental properties.
The right lease management software can streamline the management of all aspects of the real estate lease lifecycle. It can also provide critical data that organizations can use to improve their space utilization.
Ideally, this software will be in the cloud. It should also integrate with an organization’s complete Integrated Workplace Management System (IWMS).
When this is the case, lease management software can not only help with real estate portfolio management, but also with improving workflow for the whole organization. This makes it an incredibly powerful tool for FMs. Especially since the overarching FM responsibility is to keep their company running smoothly.
Plus, having one simple SSO log-in for all your facilities management just makes life easier for everyone.
Lease tracking is one of the main functions of commercial lease accounting software. Having all important documents, dates, and other data in one place makes managing and optimizing these lease agreements much more user-friendly.
Having the right lease information at your fingertips can also make it easier to normalize lease costs. This helps to annualize monthly fluctuations.
For example, this can help you avoid skewed data on your balance sheet if your property manager gives you a one-off discount.
Your lease management system should also simplify your corporate and commercial real estate management, helping you save time and, ideally, money.
Not only can good real estate management help you stay ahead of leases and avoid termination. The best lease management software will also collect data. This is is data that you can use to improve both the functionality and profitability of your space.
When stack plans are built into your lease management software, you can also use it to quickly reorganize your entire portfolio. This is thanks to the high-level view it provides.
Finally, your lease management system should also provide real-time info that helps you understand your portfolio at a glance, such as critical metrics like cost per employees, lessor information, occupancy, pricing, equipment leases, renewals, and vacancy rate.
It’s this type of sophisticated management that helps companies like Shopify stay on top of their portfolios.
“Before we launched OfficeSpace internally, we didn’t have visibility into who sat where, and there was no way to track when people moved,” says Alicia Murrell, Workplace Experience Manager at Shopify. “We needed more accountability, better data, and accurate reporting to keep up with Shopify’s rapid growth.”
Assuming you’re using the right lease management system, you should be able to leverage accurate data that you can use to make better decisions.
Specifically, portfolio reports provide systematic data that gives a much better understanding of your entire real estate portfolio, even when that portfolio is spread out across multiple buildings, cities, or countries.
When you’re able to combine your lease and usage data in a way that’s meaningful and easy to understand, you get a much more accurate picture of the true cost of your locations.
When you combine this with other data pulled from your IWMS around how people are interacting with the office—such as where they’re booking desks or how many conference rooms they’re using —you can really start to make smart, better-informed decisions about your space.
“I manage all of our leases with OfficeSpace,” says Scott Moitoza, Senior Director of Real-Estate and Facilities at Procore. “It’s a very quick way for me to see our annual costs and operating costs at a glance. And I use the real estate reports to quickly view accurate costs for each of Procore’s offices and understand why some locations are more expensive than others.”
Specifically, leveraging lease data often leads to seeing where there’s wasted space, or space that’s too expensive.
Armed with this data, many companies can reduce the amount of space they need—thereby also dramatically reducing both their expenses and their environmental impact.
“I manage all of our leases with OfficeSpace. It’s a very quick way for me to see our annual costs and operating costs at a glance. And I use the real estate reports to quickly view accurate costs for each of Procore’s offices and understand why some locations are more expensive than others.” Scott Moitoza, Senior Director of Real-Estate and Facilities, Procore
“I manage all of our leases with OfficeSpace. It’s a very quick way for me to see our annual costs and operating costs at a glance. And I use the real estate reports to quickly view accurate costs for each of Procore’s offices and understand why some locations are more expensive than others.”
Remember, the goal of a lease management system is to automate and simplify real estate management and least tracking, so that FMs are freed up to focus on more important things.
That’s why, like we’ve covered, a lease management system works best when it’s well-integrated and cloud-based, with easy access from anywhere—including via mobile app.
Otherwise, when choosing lease management software, look for one with the following key features:
Finally, always remember that the name of the game here is consolidation and automation. The more your system can consolidate your agreements and data, and automate your next steps in a safe, smart way, the better.
A lease management system is not just about your lease portfolio, or tracking your lease terms. And it’s about more than property accounting or contract management
Ultimately, the purpose of a lease management system is to keep your office running smoothly, without any interruptions, in the most cost-effective, streamlined, and automated way possible.
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