What a difference a few years can make. As recently as 10 years ago, lease administrators typically reported to one manager and functioned largely as team support, spending the workday processing piles of paperwork and chasing down rent payments.
Fast forward a decade and the lease administrator’s role has evolved into that of a high-priority liaison with specialists within the organization as well as with external contacts. The role requires business acumen, critical thinking, project management knowledge, and excellent communication, as well as analytical and decision-making skills.
Furthermore, the scope of lease administration has widened to include functions that serve to increase net operating income, minimize risks, support compliance, and improve overall portfolio performance.
The metamorphosis of the position was triggered by several factors:the rapid growth of technology, a changing economy, and, most significantly, the new lease accounting requirements which move operating leases onto the balance sheet. That shift alone demands lease management that moves beyond simply handling transactions and abstracting lease data.
Essential skills for exceptional lease administration
In order to accomplish the daily tasks of the job with efficiency, lease administrators should be organized and thrive while multitasking. Processing new leases, tracking critical dates, preparing renewals, coordinating letters of intent, reviewing estoppels, and participating in audits are only a sampling of the tasks that fill their fast-paced workday.
Particularly now, in accordance with the current trend of “doing more with less,” the new generation of lease administrators must add value as versatile team members who contribute to the bottom line by demonstrating skill in four broad areas:
Real estate management
For those performers at the top of this growing field, a working knowledge of real estate operations is vital to effective lease management. Realistically, this skill comes only with some hands-on experience in the industry. It’s difficult to gain familiarity with common maintenance issues from simply processing transactions.
In addition to being able to employ the appropriate lease language in real estate communications and activities, lease administrators need to understand the difference between a routine repair and an improvement, as well as the importance of documenting repairs with invoices that describe the work with terms like patch and fix rather than replace or new, for example.
In a leasing arrangement, it is solely the tenant’s responsibility to verify that real estate expenses have been billed accurately by the landlord. Areas where a lease administrator is likely to find errors are common area maintenance (CAM) charges, taxes, and insurance. A lease manager with some accounting skills is better equipped to review invoices and find opportunities for savings that arise from billing errors.
With the issuance of the new lease accounting standards, an understanding of the more focused discipline of lease accounting is also helpful in executing the job. In tandem with Accounting and Finance, lease administrators must use their accounting knowledge and skills to extract relevant data and ensure its accuracy before using it to inform critical decisions that impact financial reporting.
Data analysis and critical thinking
As the focus of the job has shifted from simply managing leasing activities to improving overall portfolio performance, the ability to analyze data has become a necessary skill for optimal lease administration. Insightful analysis is crucial to negotiating more favorable lease terms. It also facilitates the making of other data-driven decisions such as space utilization and whether to lease or buy.
Analytical skills are also used to project leasing costs, to predict the viability of sub-leasing, in strategic planning, and to identify inconsistencies in processes. One lease administration department routinely spent half an hour compiling data for each lease before sending it to the finance department. After analyzing the areas where information was not connected between departments, the administration team discovered that Finance had no need for the information in the first place.
The best lease management professionals must display excellent communication skills, both written and oral. Analysis and a thorough abstraction of a lease begins with understanding the legal language of leases which can often be conflicting or confusing.
Today’s lease management specialists need to be adept at reading and interpreting lease terms and conditions, keeping a sharp eye out for discrepancies between documents. Additionally, they must also understand how punctuation influences interpretation. Even a misplaced comma can affect how lease terms are interpreted.
As these adroit managers often interact with a diversity of colleagues and customers -- C-suite executives, vendors, landlords and more -- who filter information differently, the ability to tailor communications and present them succinctly is a skill that will set them apart and add value to the company.
Optimize with lease administration software
In response to the greater demands placed on them, lease administrators are looking to technology to streamline day-to-day processes and minimize the hours spent on manual tasks.
A lease administration software solution organizes all your lease data in a cloud-based, centralized location to facilitate easier access to information, quicker data analysis, reliable real-time tracking, and efficient management of critical dates and obligations.
What are some of the top features to look for in lease management software?
- Unified for all contracts types: property, equipment, vehicles and more
Whether your assets are leased, owned or sub-leased, having one comprehensive platform simplifies the complicated and daunting task of managing the many details for all your leases -- real estate, office equipment and furniture, vehicles, software and servers.
- Compliant with the new lease accounting standards
Although the governing boards have delayed effective dates for some of the standards yet again, you can be sure compliance with FASB ASC 842, IFRS 16, or GASB 87 is in your future. Implementing a solution that is 100% compliant with the new standards will mean you’re one step ahead when it’s time to adopt the new guidance for your financial reporting.
- Robust reporting capabilities
The best solutions will offer not only hundreds of standard reports but also allow for you to customize reports for your specific needs.
- Automatic notifications
In some organizations, the sheer number of critical dates that must be tracked can be staggering. In the midst of daily operations, keeping up with expiration dates, renewals, changes in rent, security deposits, insurance certificates, and terminations is a full time job in itself. More importantly, missing critical dates can oftentimes result in a costly mistake.
- User-friendly interface
An intuitive design that makes using the solution easy for everyone on your team means less time spent training existing staff and those who will be added down the road.
Conclusion: Software, a powerful tool for lease administration
The role of a lease administrator has changed and expanded over the past few years. Rather than functioning merely as an assistant who handles transactions, the position now calls for someone with experience and/or knowledge in real estate management and maintenance, accounting, and data analysis. An effective lease management professional will also possess decision-making, negotiation, and excellent written and oral communication skills.
Armed with the power of an automated lease administration and accounting solution, a talented lease administrator with the aforementioned skills and experience will be poised to deliver streamlined, cost-effective lease management -- performance which will be noticed and valued by upper management.
At AMTdirect, our team has been helping clients improve their lease administration by implementing user-friendly solutions that reduce their costs of occupancy and eliminate time-consuming manual tasks for over 20 years.
We would love the opportunity to learn more about your challenges and answer any questions you have about how our software solutions can have a positive impact on your lease administration.