Chapter I

Lease Management Overview

What is Commercial Lease Management?

Commercial lease management is the process of engaging contract arrangements between corporate tenants – or lessees – and the landlords – or lessors – for the business-related use of properties including storefronts, offices or warehouses.

What is Lease Portfolio Management?

Lease portfolio management is the process of operating and renewing a grouping of lessee contracts with the goal of optimizing the utilization of the space while reducing overall operational costs.

  
Chapter 2

Real Estate Leases

What is a Commercial Real Estate Lease?

A commercial real estate lease is a legal contract made between a tenant or lessee and a landlord or lessor outlines the terms and conditions when a business rents a commercial property to conduct business from that location.

What are Types of Commercial Lease Agreements?

There are three basic types of commercial lease agreements: Full-Service Gross, Modified Gross and Triple Net. With a full-service gross lease, the rent payment is inclusive of base rent and all operating expenses, including utilities and janitorial services. A modified gross lease includes base rent but allows tenants to pay some of the operating expenses separately and directly to the providers. Triple net leases also include base rent plus three primary operating expense categories that included common area maintenance (CAM), property taxes and building insurance. With a triple net lease, tenants also pay all utilities separately to providers.

What is Office Space Management?

Office space management is the process of planning, monitoring and improving the utilization of employee workspaces and physical locations.

What is Retail Space Management?

Retail space management is the process of planning, monitoring and optimizing the utilization of physical floor space for store locations to maximize the return on investment.

What is Commercial Lease Rent?

Commercial lease rent is the financial obligation created by a lease contract where the lessee pays a set fee – usually once per month – for use of a property to the landlord or lessor.

  
Chapter 3

Equipment Leases

What is an Equipment Lease?

An equipment lease is a legal contract made between the owner of the equipment and a lessee who uses the equipment for a specific period in exchange for set payments. Some agreements allow for the purchase of the equipment by the lessee at the end of the lease term.

What is End-of-Term Management?

End-of-term management is the decision-making process when lessees engage in equipment lease agreements with the option to purchase at the end of the contract. At the end of the term, the lessor applies a percentage of each payment to the equipment's purchase price and the lessee pays the remaining balance to gain ownership of the equipment.

What is Lease Versus Buy Analysis?

Lease Versus Buy Analysis is a process of deciding which method is ideal for a company to acquire and operate equipment needed for commercial business purposes. It involves comparing the cash flows associated with the two acquisition alternatives with the goal of identifying the most beneficial to the company from a financial perspective. Generally, a lease has lower upfront costs and avoids long-term equipment obsolescence, while buying equipment can be more beneficial in the short term for tax purposes.

  
Chapter 4

Commercial Lease Portfolios

What is a Commercial Real Estate Portfolio?

Commercial real estate portfolios are collections of owned and leased property for business purposes.

What is Lease Portfolio Management?

Lease portfolio management – also thought of as lease administration – is the process of documenting, operating and reporting on commercial property leased for business purposes.

What is a Retail Portfolio?

A retail portfolio of commercial real estate leases may contain agreements for all types of storefronts including shopping centers and free-standing stores to shop-in-shop sublease and pop-up shops.

What is an Office Portfolio?

An office portfolio of commercial real estate leases may contain agreements for all types of corporate workspaces including traditional or co-working space to subleased square footage.

  
Chapter 5

Lease Management Strategy

What is Commercial Real Estate Strategy?

The commercial real estate strategy for office and retail tenants is driven by the needs to operate workspace and storefronts that maximize utilization and optimize operating expenses in alignment with the overall corporate business objectives.

What is a Commercial Property Strategy?

A commercial property strategy involves understanding current market and submarket conditions to make decisions of engaging or renewing lease agreements for specific office or retail space.

  
Chapter 6

Lease Management Resources

Read more articles on Lease Management.

Contributors:

Sources:

1) CoreNet Global (corenetglobal.org)
2) National Retail Tenants Association (retailtenants.org)
Related Articles

From Our Blog

Stay up to date with what is new in our industry, learn more about the upcoming products and events.

ASC 842 Lease Accounting Software for the Long Term
ASC 842 Lease Accounting Software for the Long Term

ASC 842 Lease Accounting Software for the Long Term

July 12, 2024 2 min read
Charter Upgrades Lease Management Software with CoStar
Charter Upgrades Lease Management Software with CoStar

Charter Upgrades Lease Management Software with CoStar

June 27, 2024 2 min read
Why GPC Sticks with CoStar Lease Management Software
Why GPC Sticks with CoStar Lease Management Software

Why GPC Sticks with CoStar Lease Management Software

June 13, 2024 1 min read