As we celebrate the NRTA’s 20th anniversary, it is interesting to reflect on the plethora of changes we’ve all seen over that time–primarily in the advancement of technology sophistication and the evolution from mom-and-pop retail establishments to major retail corporations with hundreds if not thousands of stores.
Certainly, the role of lease administrator is no different and today we see changes involving increased responsibilities and duties that ultimately can have a significant impact on a retail tenant and their bottom line. With these changes, however, comes the dilemma many companies face–just how many people in this role do we need to employ?
Lease administration is not a “drive-through window.”
To begin the process of determining how many lease administrators your company needs, it is absolutely imperative that company leadership realizes and acknowledges that the role of lease administrator is not simply a data entry role. The accuracy, completeness and consistency of this data are vitally important due to retailers’ significant investment in store locations. The lease administrator is the perfect role to serve as the check and balance between what each store is doing as compared to the actual lease terms.
It’s not a walk in the park
The process starts with some truthful analysis on the part of each person involved with lease administration work in an effort to break down the key job responsibilities. Each person should challenge themselves to make a thorough and accurate listing of all the tasks that consume their days, including who and which departments are the recipients or final users of this work. With this “stake in the ground” as your starting point, the next steps in the exercise will enable you to define your optimal scenario.
• With all the business processes listed, start determining which roles should own each task.
• Review your list of business processes and roles to make sure it is accurate. Remove redundancies and socialize the list with colleagues who occupy all the various roles to gain feedback and agreement.
• Now that you have a blueprint, start developing job descriptions that include all the business process tasks for each role you need. Realign existing staff resources to assign the best analysts to each role for which they have expertise, while also ensuring the role is allocated to the right department. If there are no internal resources, you are now empowered to recruit the best talent.
• The structure of your blueprint also enables you to sequester the responsibilities of the lease administrator role. You will see that, while many tasks are properly positioned in this role, some have probably moved to other roles and departments. And this is a very good thing. As we discussed previously, real estate data is far too important to have just one owner. The greater the number of people working with and benefitting from the data, the greater the transparency and value to the entire company.
• Lastly, assess the amount of time it actually takes to complete each of the lease administrator tasks over a given period of time–usually a month–and multiply it by the volume of work and leases. This “formula”, while less than scientific, yields a true assessment of the hours required in a given month to optimally manage the real estate data; thus enabling you to determine the number of lease administrator positions you need
Of course, we’ve all experienced those times when we’ve been thrown a curve ball that can cause even the most efficient lease administration teams to lose their way temporarily. Major company events like acquisitions can dramatically and instantaneously increase the number of leases to manage. New procedures and federal standards–like the upcoming FASB lease accounting changes–can cause a sudden influx of new data elements, financial restatements and calculations to process. New hires require time for training and “ramp up.” All of these situations and more can place stressful demands on lease administrators. Just remember that this meticulous process yields the optimal scenario for your company. And the beauty of it is that it bolsters your organizational structure with flexibility to help you successfully manage through exceptions like these.
To Outsource or Not to Outsource?
Evidence from the “Trends in Real Estate Information Management Survey,” indicates “. . . that more companies are utilizing outsourced professionals and providers totally or to some degree to manage their real estate information. A sharp drop to 55% from 71% the year before for companies who use a centralized internal staff to manage their information may explain a sharp increase from 12% to 26% of companies utilizing a combination of internal staff and an outsourced partner. The largest percentage in four years was recorded this year for companies using only an outsource partner.” The decision inevitably rests on cost savings, so be prepared to “do the math.” Work with your team to determine which specific business processes make sense to outsource. Gather detailed estimates of the costs but remember that outsourcing work is not a one-to-one correlation. You still need an in-house expert(s) to validate the completed outsourced work and to be responsible for the tasks you don’t want to relinquish control of. Outsourcing can help enable internal resources to elevate to a more analytical role, so it can change the dynamics of current resources.
Lessons Learned in Your Quest for “The Right Answer”
First and foremost, make sure you determine lease administration staffing levels that make sense for your company. There isn’t an “out of the box” solution–there are no templates to follow, no standard job descriptions, and each company is different. It’s a serious mistake to think one person can do it all, no matter the number of leases being managed. One person cannot and should not be the sole keeper of all of this critical information, which represents one of the top financial expenses for your company. Use the “subject matter expertise” approach outlined in this article to ensure you understand all the myriad tasks involved with managing real estate data.
Never start with a head count and try to match duties to this set number of people. While this strategic process is painstaking and sometimes difficult, you will benefit greatly from identifying all the tasks and roles, the time it takes to successfully accomplish each, and then assigning and reassigning responsibilities based on department functions and staff skill sets. By optimizing the right number of subject-matter experts in the right responsibility roles, you’ll quickly optimize lease administration duties. The resulting gain in efficiency will be felt throughout your company, as all stakeholders enjoy confidence in the accuracy, consistency and completeness of real estate data which enables better overall real estate business decisions.
