Leases are the lifeblood of a commercial property. The income that they produce is used to pay for a property’s operating expenses/debt service and anything left over is distributed to investors and equity holders.
For this reason, every commercial real estate team needs an experienced Lease Analyst.
First, it is important to acknowledge that Lease Analysts can work on both sides of a transaction. While the responsibilities are mostly similar, those that work for a property owner are slightly more focused on negotiating and signing new leases while those that work for tenant firms have a greater focus on ensuring their company adheres to all lease terms.
For the purpose of this article, the focus is on the responsibilities of a Lease Analyst that works on the property owner’s side of the business. With that in mind, their typical responsibilities include:
- New Leases: Lease Analyst/Administrator(s) work with potential tenants to negotiate the terms of a new lease. This responsibility applies to new developments that need to be filled with tenants or existing properties where a tenant has vacated their space and a new one must be found.
- Renewing Leases: For existing properties, the Lease Analyst/Administrator monitors the rent roll and works with tenants who have expiring leases to negotiate a lease renewal. If a tenant does not intend to renew their lease, the Lease Analyst/Administrator will work to find a new one.
- Lease Abstracts: When a firm is considering the purchase of an existing property, the Lease Analyst/Administrator reviews each of the leases for existing tenants and creates an “abstract” for each one of them. The lease abstract is a summary of the key terms like: start date/end date, rent amount, square feet leased, and additional expenses to be paid as part of the rent.
- Amendments: On occasion, lease terms need to be amended from their original form. When this happens, the Lease Analyst/Administrator takes the lead on amending the lease and works with the tenant to get it re-signed. For example, suppose that a growing company wants to take over more space in the same building. The Lease Analyst/Administrator can help amend the terms of the original lease to include the new space.
- Expense Reconciliations: If tenants are required to pay their share of a property’s operating expenses, it may be the Lease Analyst/Administrator’s job to reconcile actual operating expenses paid against those that were supposed to be paid by the tenant. If there are differences, they may have to work with the tenant to either collect what is owed or to issue a credit in the event of an overpayment.
- Rent & Collections: This may fall to the property manager, but the Lease Analyst/Administrator may get involved in collecting rent and making sure that funds are allocated to the proper accounts. If a tenant does not pay their rent on time, they may get involved in enforcing the terms of the lease to make sure it is collected.
- Point of Contact: The Lease Analyst/Administrator serves as a point of contact for tenants and potential tenants who have questions about their lease or the leasing process. In this capacity, it is their job to receive questions/concerns and to respond to them in a timely manner.
- Reporting: Finally, Lease Analysts(s)/Administrator(s) may be responsible for creating and distributing leasing related reports to senior management. For example, these reports could cover things like: upcoming expirations, loss to lease, market conditions, percent of rent collected, and vacancy. The exact reports are specific to each property.
Based on these responsibilities, it is clear that the Lease Analyst/Administrator is an important part of the leasing team. So, by extension, they have an important role to play in the success of a property’s operations.
When do you need to hire a lease analyst?
Lease analysts are most common in retail, industrial, and office real estate firms.
Large firms with multi-property portfolios and hundreds of tenants will likely need one or more full-time lease analysts. There will be plenty of work to keep them busy and the scale of the operation can support their salaries.
Small firms and brokers may not be able to support the salary of a full-time lease analyst. In this case, a freelancer may make more sense for the business.
What differentiates a good lease analyst from a great one?
Like any profession, the difference between a good Lease Analyst/Administrator and a great one is slight, but critical. Great Lease Analysts/Administrators can work independently, rarely make mistakes, and are worth every penny of their salary. While it isn’t an exact science, here are some qualities to look for in potentially great Lease Analysts/Administrators:
- Legal Background: A lease is a legal contract so it makes sense that great Lease Analysts/Administrators have some sort of legal background. Ideally, they have worked in a paralegal capacity or have previous experience working with contracts.
- Attention to Detail: Leases are dense, lengthy documents that are filled with legal terminology. In order to be analyzed and enforced, the best Lease Analysts/Administrators have a knack for details and the patience to read these documents in full.
- Strong Reading Comprehension: Again, a lease is a document that can be difficult to read. But the details are absolutely critical and can be the difference between a profit and a loss in some properties. The best Lease Analyst(s)/Administrators are very strong readers and have the ability to translate complex legal language into reports and actions that must be taken to manage the lease.
- Highly Organized: A single property can have dozens of tenants. If a Lease Analyst/Administrator covers multiple properties, there can be a lot of leases to keep track of. As a result, the best Lease Analysts/Administrators are extremely organized and have the ability to implement processes and systems to guide their efforts.
- Independent & Efficient: In an acquisition, leases may have to be examined and abstracted in a very short period of time. As a result, the best Lease Analysts/Administrators are able to work quickly, independently, and without much supervision to meet lease abstract deadlines.
- Proficiency with Software Tools: There are a number of software tools that Lease Analysts/Administrators should be familiar with to complete their jobs on a day to day basis. The tools can vary by company, but the key point is that the best Lease Analysts/Administrators have a high degree of proficiency with them.
- Collaborative: A Lease Analyst/Administrator is part of a larger leasing and sales team. As a result, the best candidates are highly collaborative and work well with the larger team to ensure that portfolio properties stay full and that rent is paid on time.
- Excellent Communicator: When leasing related issues arise - and they always do - the best Lease Analysts/Administrators are able to spot them quickly, analyze the root cause, offer a range of solutions, and communicate them to senior management and other interested stakeholders.
Candidates with these qualities have a higher chance of being a great Lease Analyst/Administrator. But, they can be tough to find and competition for their services can be intense.
Where can you hire a lease analyst?
The commercial real estate industry is exciting and dynamic. Over the past decade, it has experienced rapid growth and the future looks equally compelling. With many different firms vying for a limited number of candidates, hiring a top performer can be tricky. This is where we come in.
At Bullpen, we specialize in helping commercial real estate acquisition and development firms find and hire the best freelance lease analysts in the real estate industry. We pre-screen the candidates, verify their experience, and handpick the best talent for your hiring needs … all within 72 hours.