Each business is unique. We offer a range of abstracting services, all designed to help you reach your goals. A one-size-fits-all approaches will never help your business reach its full potential. We deliver custom solutions, tailored to you – your industry, your culture, your one-of-a-kind challenges so you get precisely what you need.
IDENTIFYING THE RISKS AND BENEFITS
Lease abstracting becomes particularly important for any acquisition, merger or assignment and allows for effective decision-making. Financial terms of the lease deal are documented which makes it useful for property investors or lenders. It provides bottom line information extracted by experts after careful consideration and integration of all relevant documents.
Abstracts permit the user to easily review all relevant lease information without taking the time to search and read through each page of the lease. By collecting the lease information, abstracts allow users to better manage a portfolio of leases. Lease abstracting serves to organize your lease data, which is a crucial benefit when leases contain many amendments, when landlords or tenants hold sizable lease assets, or when dealing with a variety of lease formats.
Commercial leases usually include a large degree of legal language that can make it difficult to quickly find critical lease data. Providing a lease abstract rather than a full lease text also saves time and money for those who are performing due diligence on the property for a potential sale or acquisition.
WHAT SHOULD BE ABSTRACTED
The lease information that should be abstracted depends on the individual needs of the client and is contingent on several factors, including the reasons for abstracting and the length and complexity of the lease documents.
Lease abstracts can range from two to ten pages, but typically are two to five pages. At a minimum, an abstract should contain the most important “dates and dollars” provisions of the lease, such as Commencement, Expiration, Renewal Term and other key Option Dates along with Rents, Operating Expenses, and Square Footage.
WHO SHOULD HAVE A LEASE ABSTRACTED AND WHY
Lease abstraction is an important process for all commercial real estate participants:
- Landlords: Enables better strategic portfolio decisions, reduce costs and identify opportunities to renegotiate.
- Investors/Buyers: Reduce risks and provide clarity on what is actually being purchased.
- Lenders: Assists in financial approvals and forms part of the due diligence on closing.
- Tenants: Identifies any over charges and where they can seek a credit and/or refund, to understand what they are signing, and enable a better negotiating position on renewals.
- Property Managers: Provides clear direction and understanding on maintenance and repair responsibilities.
- Realtors/Brokers: Provides an enhanced level of service that parallels a home inspection in residential sales and leasing.
- Lease Administrators: Provides a more simplified (easier to use) and shorter reference point for administering or managing the lease.
- Accountants: Provides an accurate record for reporting on actual payments and potential saving of clients.
- Trustees in Bankruptcy: Determines what assets the business owns, if any, to include in bankruptcy for payment to creditors.
Results will vary depending on the participants in Commercial Real Estate (CRE). The most common include, but not limited to, the following:
- saves you money
- saves you time
- reduces your overall risk
- outlines the amount of principal realized for a property or unit
- puts you in a better bargaining position
- ensures you that the correct amount of payment is being made
- reduces costs and improves the bottom line
- highlights any anomalies
- identifies any over/under charges
- ensures definitions in its proper segments
- answers any specific questions YOU have
- outlines Landlord and Tenant rights and responsibilities
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