Lease Administration Success Journey

Tessa Author

Everything is a phase. Explore different stages of the lease management process to gain more clarity about your department's success path.

The Lease Administration success journey is a timeline of process development stages. Along this journey, you learn and understand your portfolio and processes while streamlining and optimizing your resources and activities to run like a well-oiled lease management machine.

We all want a proactive process. Yet, the reality is that many departments are understaffed or undertrained, living from deadline to deadline, rent roll to rent roll without a vision (or worse, with super vague high-level goals) of where they want their lease administration function to end up.

It can get tedious, frustrating, and even overwhelming for the team. And, unnecessarily so! To get what you want (and get out of this rut), focus on two things - a clear purpose and a clear path.

When talking about Lease Administration, the purpose should be serving your tenant. The second piece of that puzzle is not as simple. Every lease portfolio (and its administrator) must complete a clear set of objectives to have a successful lease administration function that practically runs itself.

The rest of this article is about those objectives, the Lease Administration path, the journey, the evolution, if I may.

The Lease Administration Journey

The journey has four distinct, sometimes overlapping, phases, and the time you spend in each of them depends on your existing systems, team, and process documentation.

As you complete each stage, you gain confidence in your process, enhancing your systems and minimizing risks and wasteful use of resources. The result is not only the function that runs itself, but you'll have the skills, appetite, and free time to tackle more interesting (or challenging) projects or change roles without hindrance to your Lease Admin team and process delivery.

Below we explore the purpose behind each phase, the symptoms you'll experience going through them, and a few checklist items to help you progress faster.

Phase I: Onboarding

We kick off the journey with the onboarding phase, and it happens every time there is a material change in the process, meaning a difference in at least one of these process variables:

>> Portfolio composition: new portfolio or set of locations

>> Team composition: analyst new to the industry, process, or portfolio.

>> Technology: new real estate database or another tool used by the company

>> Process: new ways of doing the work (better or different)

These changes happen when your portfolio and team are growing with your business, adding new tools (like a real estate database), or maybe merging with another company, forcing you to figure out how to do things the new way.

Whether you don't know how to manage a lease portfolio or you don't know how to handle this lease portfolio - there's always a period of onboarding and discovery.

Depending on your experience as a lease analyst, this phase can last from a month to a year, yet it's common to be in this phase for at least one quarter.

You're in Phase I: Onboarding if:

You don't know what you're doing

You're not sure what to abstract, how, and into what format, nor do you know how to pay rent. Or, if you're finally going digital with a real estate database and unsure how to use it for your usual responsibilities, there's a period of onboarding there, too.

You don't know your portfolio

It takes time to learn about your leases, the landlords, and the team of vendors you'll work with to complete your job. In the beginning, you'll know nothing and no one, and that’s OK. Just be open to learning, occasionally making mistakes and taking the time to fix them, learning from the experience.

There is physical evidence of process breakdowns

You see outstanding balances and late fees on the statements, a pile of documents to abstract, and your inbox is overflowing to the point where you have to make a conscious choice between getting your work done or responding to the emails. (Good thing it's just a phase, right? Like teething babies.)

You're motivated to get things under control

Being new to the portfolio or the role, you're eager to make an impact, simplify the process, and eliminate past due balances and late fees. And although you may be a little overwhelmed, the prospect of a robust function keeps you excited and showing up.

Your checklist to get through Phase I:

Get to know your portfolio and current process

Managing a portfolio starts with understanding the leased assets and process infrastructure you're working with, like knowing where to store and how to name lease files and monthly reports, for example.

Befriend process stakeholders

You don't work in a vacuum and frequently must interact with others to complete your assignments. You don't have to become best friends, yet at a minimum, introduce yourself to those people and create a handy list of their contact information for future reference.

Identify your key responsibilities

Find out why your department exists, and what success looks like in your function. Your direct assignments should be aligned with and help you meet these objectives.

Assess your technology tools

Technology has a massive impact on productivity and efficiency. Excel is your friend - accept it, lean into it. Also, consider a real estate database if you have more than 15 leases. Some providers have a free version that's pretty useful for a small portfolio.

Learn the job

Knowing how to abstract, pay rent and find relevant information are essential skills for the role. You don't have to be proficient at these tasks as you move to the next phase, but you need to understand how the process flows, whom to ask for help, and how should the final deliverables look.

Phase II: Post-"Go Live" Trials

The Post-"Go Live" Trials is the second and most intense phase. You're motivated to make a difference, excited about the next steps, and know more about your role and portfolio. Yet, your processes are all over the place, most of which are done reactively. You may still lack confidence or consistency, but keeping your Lease Admin ship afloat.

Depending on your portfolio composition, it can become so challenging that many teams stay here for years. However, if you remain focused on improving your process and keeping an eye on the future state, you can get through this in as little as six months. (Yet, it won't happen without work on your end).

You're in Phase II: Post-"Go Live" Trials if:

The rent is paid, but that's about it

You're abstracting leases, paying rent, and responding to inquiries, but there's not much time for process improvement as you're still working from deadline to deadline.

Using tools is becoming easier.

You're learning how to navigate your real estate database for data entry and reports while getting familiar with the portfolio. You may even start referring to some locations by their record ID.

You've got checklists and templates for critical activities

After repeating the monthly process cycle for a quarter or two, you've established some workflows and checklists to ensure you're on track without skipping steps.

Your checklist to get through Phase II:

Document the workflows for all critical activities

Transform your checklists into full-flashed outlines with step-by-step instructions and links. Also, figure out how to measure and monitor the success of each activity to track consistency and improvement over time. (Don't overthink it - one or two key metrics for each process).

Conduct weekly reviews of progress and issues

Schedule time weekly (or no less than once monthly) to review process metrics (aka key performance indicators or KPIs), project status, and any issues encountered during the period. If you want to get out of this phase, you need to start being intentional with your time and efforts. Regular meetings keep you on track, help identify priority issues, resolve them quickly, and stay true to your goals.

Embrace the proactive process by acting proactively

Foresight and organization come from practicing being proactive. Start by keeping a central calendar with due dates for deliverables and scheduling time to work on them to prepare in advance. Begin by blocking off dates for rent roll, invoice review, and other recurring tasks you do.

Invest in landlord relationships

Landlords are business partners and make great allies to simplify your work. Take the time to connect with them, help them out, and they'll usually return the favor when you need invoice support, consent for something, or favorable renewal terms.

Phase III: Renting & Rolling

In the Renting and Rolling phase, you feel like a train on the tracks with a clear path to follow. The job is getting easier with a set of predictable systems executed with precision like clockwork.

You're working proactively, building consistency and momentum with your recurring activities. Fewer fires to put out leave more time to work on the projects that continue to improve your process and efficiency, like adding templates to help you stop reinventing the wheel.

It's the phase to streamline and fine-tune and can last from a couple of quarters to a couple of years for the complex decentralized portfolios.

You're in Phase III: Renting & Rolling if:

You know what to expect from your portfolio

You can predict who'll send the invoices before the rent roll, who'll delay Key Dates report comments, and who will need an additional follow-up.

After managing a portfolio for a while, you start to know the locations offhand, get on a first-name basis with your landlords, and look up leases by their five-digit lease IDs you remember by heart.

You're confident in your processes and data

Your key activities are running smoothly, with occasional abnormalities that you know how to fix or who can help you do it. Simultaneously, the data quality is improving due to all the effort and controls you've put in to minimize common mistakes in the prior phases.

You don't incur late fees or miss payments

Not only is your process in tip-top shape, but the landlords know you're the person to call when something is wrong. They don't scream anymore but instead come to you and your team for help. You've become an ally, not an opponent.

Your team is expanding

You're looking for another person (or a few) in the company who knows what you do and can do it, too. The idea is to have redundant operations and backup for you (so you don't have to miss your sister's wedding, even during the rent roll week, for example).

Your checklist to get through Phase III:

Get a teammate or a backup person who knows the role

Paying rent and other lease management activities are critical to business operations; therefore, multiple people should know how to do the job as a form of control. The ability for each person to take time off guilt-free helps increase your team retention rates.

Monitor progress regularly

The goal is to expand on the KPIs you've set for your primary activities in the last phase to collect and monitor a comprehensive range of metrics to help balance productivity, measure process efficiency, and ensure nothing slips through the cracks.

If you're a solo act, have weekly or monthly check-in meetings with your superior to review the status of the Lease Admin function—the more complex the portfolio, the greater the need for accountability and communication.

Document processes beyond critical activities

Create and refine a troubleshooting guide based on the knowledge gained over the last year or so as you've refined your processes. Also, implement a system to update process documentation to remain relevant.

Plan ahead, then work your plan

Develop a list of upcoming quarterly projects you'd like to tackle in the next two to three years. Then, outline and schedule the tasks for the projects to complete this quarter and next. Don't be too zealous; it's better to focus and finish one or two projects than start and never finish five or six.

Phase IV: Autopilot (or Half-Day Fridays)

You've got 100% control of your process, manage your work proactively, and are free to work on the projects that ignite you.

You and your team are operating with synergy in deliverables and accountability. You have a succession plan in place, the team is happy, and onboarding new team members is easy and fun. You follow the consistent system, and everyone knows their value in the overall process/department. 

You're aiming for this phase to last for as long as possible. Yet, in practice, it will last until there's a change in portfolio (like acquiring another company) or in the team (someone quit and replaced).

You're in Phase IV: Autopilot if:

Your team is a single cohesive unit

Everyone is accountable for their responsibilities yet cross-trained in other areas and pitches in to help each other out and achieve set KPIs. You can take vacations guilt-free without fear that something will fall through the cracks. 

You work half-day Fridays

Yep, when you have a process that practically runs itself, you can leave a little early on Fridays here or there (without having to work overtime later). With a few clicks, you can find out what your team is working on now and in the future. Everything is running following the schedule set by KPIs, and you have practical weekly, monthly, and quarterly meetings to monitor progress and resolve department issues.

You're open and ready for new challenges

You have the skills, knowledge, and willingness to take on challenging projects (like implementing a new Real Estate Database or taking on some transaction work), even though it may bring you back to Phase I. The good news is that although it will be a project with much work, you'll move through the phases faster since you're not starting from scratch.

Your checklist to get to and stay in Phase IV:

Keep growing your team

It's best to have a central person to track everything instead of relying on (forcing) portfolio managers and analysts to enter things into logs and dashboards. It's a more efficient time spent over the long-term and creates great internal control. It’s a role perfect for the person in charge of creating and analyzing the KPIs since they are in the reports already.

Stay consistent with and protect your optimized process

Get to the state where the number of proactive deliverables outweighs the number of ad hoc requests and fire drills. You're intentional with your time and can effortlessly work the ad hoc requests into the team's schedule. When needed, use the data you have as support to request additional resources for new projects or tasks (both temporary and permanent).

Eliminate landlord issues

You're aiming to have zero balances for 99% of your statements. (Shoot for 100%, yet be open to (and prepared for) an outlier.) Keep building relationships with your landlords (while fairly upholding lease covenants) to ensure they're comfortable dialing you whenever any issues or questions arise and vice versa.

Empower your Lease Admin operation to run effectively without you

No one should be irreplaceable for the wrong reason. Enable your team to work without you with cross-training, using easy-to-follow training programs and a succession plan. Your goal is to have a department with a clear vision, transparent operation, and effortless process maintenance.

Final Thoughts

The phases of the Lease Administration journey apply to both the team and the department's process. As you complete the items on the checklist, your portfolio will run smoother, while you, as the administrator or portfolio manager, will become more confident and efficient at your job.

The bad news is that if you don't put in the effort to streamline, you'll stay in the first two phases for what may seem like "for-e-ver." The good news is that you don't have to be there for a long time if you merely keep showing up and working on your plan. The last two phases are worth the effort!

Also, the journey has a cyclical nature. Every new process or person must go through the four stages to integrate into your existing practice. Yet, it will get better and easier every time you repeat it.

I hope this prompts you to explore your own Lease Administration journey. Which phase in your skills and as a department are you in now? And more importantly, I hope you have a better idea of where you want to end up.

Categories: : Process Improvement