For the uninitiated, lease management can be surprisingly complicated and cumbersome. Distilling down to a simple lease agreement is a gross oversimplification. Between lease abstraction and working with compliance standards, commercial property owners and managers often struggle to find efficient solutions to managing their lease portfolio, which can lead to tenant turnover and higher vacancy rates.
At a high level, lease portfolio optimization can be considered as your response to the challenges of managing an entire portfolio of leases to achieve your operational and financial goals.
When it comes to lease portfolio optimization, it’s critical for you to have access to a CRE software platform that will work in tandem with your professional requirements and scale with your operations. It would be impossible to understate CRE software’s role in reducing vacancy through lease portfolio optimization; we cover what we believe to be the five key points below.
1. It’s All About the Data
Data-driven information is critical to any operation. This is especially true when it comes to the complex and time-consuming world of commercial real estate management. The right CRE software will help you and your management team to understand which properties are in the black and which are underperforming. This is critical for lease portfolio optimization.
Your CRE software should also notify you about lease expiration schedules. This is a big factor when it comes to proactively dealing with potential renewals, rent adjustments and other tenant-retention strategies well ahead of possible vacancies. It’s vital to be able to think three moves ahead and the perfect software for your CRE management team will be able to do just that.
2. Lease Management Automation Made Easy
The ideal CRE software should be able to manage those critical lease dates that might otherwise come and go without proper notification. This is why you need an application that can send automated alerts and reminders to you, your team and your tenants. As anyone in the CRE business knows, the start and end of every month is hectic and this is where it gets easy to lose track of important details.
The right CRE software will also help you to streamline renewals and negotiations. This means that your administrative team will be up to date with tenant needs and wants while also minimizing lost revenue from missed renewal opportunities. If your team is unable to follow through on these relevant details, it’s likely that your tenant won’t follow through when that lease term is up. The right CRE software will help you automate lease management.
3. Lease Portfolio Optimization
Now, let’s take a good look at how your centralized software can help you optimize your lease portfolio. With the proper management software at hand, you will be able to quickly identify non-optimal lease arrangements. This means that the lease arrangement might suggest a vulnerability or might not be the optimal choice for you and your management team.
If the commercial property is generating high maintenance costs or unpredictable expenses, you should be kept privy to this performance. Likewise, if a lease arrangement creates too much expense or burden for the tenant, you should also be made aware of that potential issue. Striking the perfect balance between tenants and property management is a great way to keep those vacancies from stacking up.
Be sure that your team has access to an application that can recommend consolidation or reassessment of less-than-optimal lease arrangements. This will result in better space utilization and, most importantly, reduce vacancy rates.
4. Raise the Bar When it Comes to Tenant Relationships
You and your team will need a CRE software program that will raise the bar for tenant management and relationships. Let’s face it, the word “landlord” is sometimes met with a flinch or touch of dissatisfaction. Your goal is to keep your tenant relationship both profitable and harmonious for all parties.
When it comes to your property management style, make sure that your tenants know that it’s about the service. It’s not what you can get from them but making the value you deliver for them apparent. With the right lease management software, you will be able to track tenant satisfaction. More importantly, you will also be able to track tenant dissatisfaction.
Another important component of tenant management is your tenant’s ability to reach you and to have a consolidated record of that communication. Don’t just let it fall to another missed voice mail. Be sure to consider CRE software that allows for a trustworthy communication portal. This way, everyone knows the “when” and “why” of a tenant’s concern.
With the right CRE software platform everyone will have real-time, multi-platform access to your tenant’s communication history. This will help you to immediately identify potential issues and service requests. Strengthening and sustaining tenant relationships is the most effective way to keep those vacancy notices from rolling in.
5. Financial Analysis is Critical to Lease Portfolio Optimization
Modern CRE software should be able to understand and even forecast current market trends and patterns. Are commercial properties nearby leasing for more or less than your property? Has the value of your property gone up or dipped? Is tenant retention more or less likely based on your current lease arrangement and the demands of the immediate commercial district? How is the local, regional and national economy affecting the specific businesses of your tenants?
The Covid epidemic forced many brick-and-mortar operations to shutter and yet local commerce evolved and did not go away. Consumers learned to adjust, suggesting an unexpected vulnerability in the marketplace. As the market shifts back to brick-and-mortar, you need a CRE software program that can help you understand real-time economic conditions and investment strategies and how they will affect your lease portfolio optimization.
Always keep in mind that data is meant to be actionable. It’s not just there to be ignored or whisked away. The more data at your fingertips, the more capable you are of making informed decisions. This is why you need a CRE software platform that is accessible to everyone on your team across multiple platforms 24 hours a day. Real-time data is real-time money and that is essential when it comes to lease portfolio optimization and avoiding those pesky termination notices and subsequent vacancies.
With the right data in hand, you will be able to identify lease expirations that might result in vacancies or tenants with a higher probability of not renewing their lease. You will also have your finger on the pulse of regional and national market trends and demands and how those elements might factor into sustaining your tenant population.
Don’t Underestimate the Real Value of Cutting-Edge CRE Software
These days, any successful business manager will tell you not to take anything for granted. The trick, then, is to know what it is actually there to not take for granted. Without that real-time data, your CRE portfolio can suffer in more ways than one.
Sustaining proper tenant relations is one of the most effective ways to avoid vacancies. This means that you need an application that allows for strong tenant communication and a day-to-day understanding of those commercial market trends. In the world of successful commercial property management, data is king so be sure to cast a big net with the right CRE software.
Here at Quarem, we work hard to deliver cutting-edge software solutions to help our clients optimize their lease portfolio and reduce vacancy rates. Quarem is more than just a lease management software company. We’re an experienced team of advocates in your corner that will help your CRE business succeed.
When you’re ready to take your investment portfolio to the next level, contact us today or schedule a free demo of our efficient and data-rich software.
