1. Essentials of Lease Abstracting
Presented by: Julie Ricci
Lease Administration Masterclass Friday, 23rd March 2012
2. Essentials of Lease Abstracting
Session Overview
• What is a Lease Abstract?
• What is the Value of Lease Abstracting?
• Basic Rules Before You Start
• Administering Multi-Geographic Portfolios
• Systems & Tools
• Lease Abstraction Components
Lease Administration Masterclass Friday, 23rd March 2012
3. Essentials of Lease Abstracting
What is a Lease Abstract?
lease
Noun
1. a contract renting land, buildings, etc., to another; a contract or instrument conveying
property to another for a specified period or for a period determinable at the will of
either lessor or lessee in consideration of rent or other compensation.
2. the property leased.
3. the period of time for which a lease is made: a five-year lease.
ab·stract
Noun
1. a summary of a text, scientific article, document, speech, etc.; epitome.
2. something that concentrates in itself the essential qualities of anything more
extensive or more general, or of several things; essence.
“A summary of a contract for renting land or a building”
Lease Administration Masterclass Friday, 23rd March 2012
4. Essentials of Lease Abstracting
What is the value of Lease Abstracting?
To ensure ….
• Key Dates are checked and recorded
• Charges are calculated correctly
• Documentation of Key Clauses
• Budgeting awareness for forthcoming expenses
• Reduction of risk of unusual Clauses being interpreted incorrectly
• Easy reference for Company personnel
• Speed and ease of access
• Use of automated Systems
Lease Administration Masterclass Friday, 23rd March 2012
5. Essentials of Lease Abstracting
Basic Rules Before You Start
• Have a clear mind;
• Take your time, check each page;
• Don’t ever assume documents are the same;
• Ensure you have a complete set of Documents including all
variations, extensions, memorandums, etc;
• Review ALL documents before you start;
• Seek guidance if you do not understand the intention of the clause;
• Document data clearly and securely.
Tip of the Day
Two monitors are a must for efficient Lease Extracting.
Lease Administration Masterclass Friday, 23rd March 2012
6. Essentials of Lease Abstracting
Administering Multi-Geographic Portfolios
Are you about to expand your Business into another Country?
Well here’s your first challenge, not all Leases have a Lease
Schedule.
Dealing with different area and rental calculations
Dealing with different currencies
Lease Administration Masterclass Friday, 23rd March 2012
7. Essentials of Lease Abstracting
Systems & Tools
How do you record your findings:
• Excel Spreadsheet
– Pros and Cons
• Database
– Pros and Cons
Lease Administration Masterclass Friday, 23rd March 2012
8. Essentials of Lease Abstracting
Lease Abstraction Components
• Abstracting Critical Dates
• Managing Rents, Reviews & Adjustments
• Percentage Rent Calculations
• Conditional and Dependant Charges
• Sales Restrictions
• Insurances and Compliance
• Lease Conditions and Clauses
• Exercising Options
• Landlord and Tenant Notices
• Outgoings Charges & Reconciliations
Lease Administration Masterclass Friday, 23rd March 2012
10. Essentials of Lease Abstracting
Managing Rents, Reviews & Adjustments
• Calculating Commencing Rental
• What is a Review, Escalation and Step
• Cross-checking CPI values
• Managing Rebates and Rent Concessions
• Outgoings Adjustments
Lease Administration Masterclass Friday, 23rd March 2012
11. Essentials of Lease Abstracting
Percentage Rent Calculations
• Calculating the threshold
– Natural
– Forced
• Using the correct Accounting Period
– Lease Anniversary
– Financial Year
– Calendar Year
– Other
• Reporting Sales - Are there any exclusions?
Lease Administration Masterclass Friday, 23rd March 2012
12. Essentials of Lease Abstracting
Conditional and Dependant Clauses
• Greater Than
• Percentage of Sales
• Merchant Promotional Funds
Lease Administration Masterclass Friday, 23rd March 2012
13. Essentials of Lease Abstracting
Sales Restrictions
• Managing Restrictions
• Limiting other competitors
• Radius Restrictions
Lease Administration Masterclass Friday, 23rd March 2012
14. Essentials of Lease Abstracting
Insurances and Compliance
• Building Approvals
– Warranty of Fit (NZ)
• Public Liability
– Do you have the right level of cover
• Lessor Requirements
– What does this cover;
– Does the Lessor need to be noted on the Policy
– Are there any exclusions
• Providing COC to Lessor
– Is it a requirement under the Lease to provide each year?
Lease Administration Masterclass Friday, 23rd March 2012
15. Essentials of Lease Abstracting
Lease Conditions and Clauses
• What is a Kick-out Clause?
– Landlord or Tenant Driven
• Accounting for Make Good Provisions
• Co-Tenancy Provisions
• Assignment Provisions
• Repairs & Maintenance
• Relocation
• Redevelopment
Lease Administration Masterclass Friday, 23rd March 2012
16. Essentials of Lease Abstracting
Exercising Options
• What is a Right of Renewal?
• Have you documented:
– First Exercise Date
– Last Exercise Date
• What is the Review Method at the Option
– Market
– Fixed
– CPI
– Capped
Lease Administration Masterclass Friday, 23rd March 2012
17. Essentials of Lease Abstracting
Landlord & Tenant Notices
• Address for Service
• Format/Type
• Date deemed served
• Updated – Current
• Nominated Contact
Lease Administration Masterclass Friday, 23rd March 2012
18. Essentials of Lease Abstracting
Outgoings Charges & Reconciliations
• What is included as an Outgoing?
• Are you in the US? What are CAMS?
• Budget v Reconciliation
Lease Administration Masterclass Friday, 23rd March 2012
19. Essentials of Lease Abstracting
Thank you
Lease Administration Masterclass Friday, 23rd March 2012
