Lease Tracking

Posted on 29 July 2010 at 11:20 am in Compliance.

Good decision-making has always been based on good information. While real estate related software creates everyday efficiencies, its long-term effect of capturing information may be its greatest value. Analyzing information over a long period of time requires that somehow data has been generated and stored. If that data does not exist now, can it be re-generated and at what cost? Preventive maintenance, visitor-access control systems, and work order management ASPs (“Application Service Providers”) all create operating efficiencies, and, if designed well, have a tremendous ability to capture and store data. In most ASPs getting good data is a fortunate result rather than a primary function. However, in lease tracking applications the service of capturing data is the core value.

Generally, sophisticated software developers understand that establishing well-organized data collection procedures is as important as developing functional requirements. Since data can only be analyzed after it is captured., aspects of generating and storing data are usually carefully considered before ever implementing the tools for analysis. The lack of analysis tools in most leasing programs exemplifies these notions of software design.

Consider the simplicity of placing all lease abstract data in a Microsoft Excel spreadsheet. Any small to medium size property owner can develop a database that stores data and generates reports. Creating a graphic interface to search and view the data takes a few good weeks of programming; however, capturing leasing data requires time and expertise This is not necessarily found within the software, but with the personnel operating or initially populating the data in the software.

Pay a lawyer to do a lease abstraction, pay a person to do data entry into a software program and have the data in a safe and accessible format. The combined cost of the lawyer, the data entry personnel and the software is going to be approximately $500. Using a complete leasing ASP the cost of a similar transaction is reduced to less than $300.

With leasing ASPs, landlords are not paying so much for the application, they are paying for the great service. Low cost lease abstractions, offsite data storage, reporting and analysis are key benefits. Converting paper documents into digital data can be very laborious. Extrapolating information from contracts and reviewing leases tends to require legal expertise. Also, once the data is captured it must be assigned to its relevant place within the database. There is an expectation that porting data from paper files to digital database is performed without mistake. Perfection has always been expensive.

Digitizing leasing data eliminates document shipping, copying and faxing. It allows for the sharing of real time information and disaster recovery. Storing data in such an organized format assures that lease documents are never misplaced or lost. Once the data is captured, permission can be granted to tenants to view their lease information online. Instead of spending time arguing various aspects of the lease with a tenant, a landlord can direct the tenant to the specific information online. Moreover, any dispute as to what the lease document contains can be quickly resolved by the click of a mouse. With this online feature for tenants installed, incorporating the expenses associated with this amenity into each lease makes perfect sense.

While searching for a partner in developing our own lease tracking software, we have reviewed many providers. Many tend to create complicated tools that put the onus on landlords to input and capture the data. An application that merely serves as a “bank” of data is usually not worth the cost. It is exactly what is wrong with most real estate related software; all function, no service. The oldest trick in selling product, “now that you bought it, nice knowing you, good luck, bye.”

One of the apparent problems of most real estate based ASPs is they deliver the application, but forget about the importance of expert ongoing service. The everyday value of an ASP is not merely answering the question, “Is the application working?” Instead, Application Service Providers should truly help operate businesses and answer the important questions. “Does the service work for you and is it valuable?”

Outsourcing non-core functions of a business makes economic sense. Focused on capturing and storing lease data all day everyday, service oriented leasing ASPs are going to be more cost effective for most landlords. If your looking for a better way to capture and store leasing data, convert paper in to a digital database to be queried, searched and analyzed, look no further than a leasing ASP. Fortunately, there are solutions out there that do provide both the application and the service.

Finding a partner has not been easy, but Shortpath has begun incorporating a leasing ASP into its comprehensive building operating system. There is the opportunity to increase ROI (“Return on Investment”) by using technology for what it is being built for, efficiency.