When was the last time you built a puzzle? It may have been a rainy day or a long vacation, but no matter the occasion, we all start off the same – you open the box and dump the pieces out on the table. From there, we all employ our own building strategy. Some start with the corner pieces and build the frame, while others take the time to sort out all of the pieces by color or pattern.
Lease abstracting is a lot like a puzzle. You start out with all the pieces – terms, rent schedules, options amendments and assignments – and get to work piecing together the final pretty picture, an organized portfolio. Just like building a puzzle, everyone has their own approach or strategy to abstracting, because leases come in all shapes and sizes, and sometimes show up with a missing piece.
No matter if you’re just learning how to abstract or are a seasoned expert, we wanted to share some of our favorite tips and tricks to get that “picture perfect” lease abstract.
Tip 1: Start with a checklist
There’s a standard list of lease elements that most professionals track – income/expense, lease options, commencement/expiration – but it’s important to think about the elements that matter most to your strategy and the aspects of the lease that impact the value of your real estate.
For example, if you lease space in a retail center and have several clients visiting each day, parking allotment might be a key point for you to track.
Tip 2: Create a Timeline
Like we talked about earlier, leases come in all shapes and sizes. No matter the number of amendments or renewals, each lease has a unique timeline. At the start of your abstracting, it’s important to put pen to paper and piece together the story of your lease. This is one of the best ways to ensure that you don’t miss anything.
Pro Tip: When abstracting a lease with several amendments, consider working backwards. Start with the most recent amendment and end with the original lease.
Tip 3: Determine how you want to handle critical dates
After creating a timeline, make a list of the critical dates that you’re going to identify in the lease. This ensures that you focus on important elements, like option notification windows.
Pro Tip: determine a structure for your reminders that establishes the frequency of the reminders, a format for the descriptions, and the window of time you would like to be notified before the date occurs.
Tip 4: Keep a running list of questions or info that needs to be double checked
Remember, we’ve all lost one or two puzzle pieces at some point. When abstracting, there will be times when you discover you’re missing information or that certain elements in your timeline just don’t add up. Keep a spreadsheet of these questions listed by lease.
Pro Tip: If you’re like me and need to stay focused in the moment, use sticky notes to keep track of your questions and then add them to the spreadsheet later.
Tip 5: Finish each abstract in one sitting
If possible, this is the best strategy to utilize. Because each lease has its own unique timeline, it’s easy to forget the specific details when you take a long break.
Tip 6: Save the lease language for easy reference
This is such a lifesaver when you need to make quick reference. Go beyond simply referencing a page number. Copy and paste the language in a convenient spot, like a spreadsheet.
Tip 7: Invest in tech tools that will support your efforts
Tech tools that help with lease abstracting cover a wide range of products. The base level of tech tools includes spreadsheets, PDF converters, and simple calendar management systems. All of these tools are helpful, but there comes a point where they’re no longer the most efficient solution.
Lease administration software, like Quarem, is a great tool to level up your abstracting abilities. The Lease Abstract within the software
- highlights over thirty key points of a lease
- separates the lease data by suite so that you can manage multiple spaces in one building
- allows you to copy and paste the actual lease language in the corresponding section
- securely stores all documents tied to the lease
- sends automated critical date reminders
- supports custom reporting and automated regeneration schedules
To get the full overview of Quarem’s lease abstract tool, schedule a live demo of the software with a member of our team today.