Improve your bottom line with strategic lease management
Poorly managed leases, even for small to medium enterprises (SME's), can easily result in unnecessary costs running into tens of thousands of dollars over the term of the lease - that's money going into the landlord's pocket instead of yours.
Improving lease performance by identifying and activating savings in occupancy costs is a specialist skill and takes time. Substantial savings can be achieved through initial negotiation of commercial terms of the lease by an experienced, specialist tenant representative who understands retail leases in depth and applies industry knowledge and property market intelligence to achieve the best possible outcome for the tenant. The value of the lease as an asset to the business can be further increased through ongoing strategic and proactive lease management and administration.
Partnering with a company with retail leasing expertise addresses this key area and frees you to concentrate on the other vital cost areas in your retail business to deliver improvements in net profit and asset value.
The fundamental change needed in Retailers'/Lessees' mindsets to ensure the real estate is working for the business, rather than the business working for the real estate, is to treat the lease (and the landlord), as a part of the supply chain and actively manage it. Afterall, you want your lease to be an asset, not an anchor!
Sadly, less than one percent of tenants actually focus on, or do anything at all for that matter, on the key areas of influence which are mandatory to strategically manage a retail shop lease. By outsourcing the role of actively managing the lease, a retailer can ensure this mindset shift occurs in their business and the basic tenets of lease management are delivered by dedicated and focused industry professionals who will:
- Establish a critical path - mapping the time lines and events associated with the lease terms and planning lead times and resources required at each event to influence outcomes in the tenant's favour
- Benchmark performance and KPI's - regularly reviewing and comparing against industry norms and reacting in a timely manner to align occupancy costs and real estate outcomes
- Establish procedures to deal with the landlord notices and day-to-day operational issues
- Manage relationships - keep communications between you and the landlord professional and two-way
- Regularly report on and assist with strategies to improve performance.
These are just a few of the key tasks which will improve the risk/value proposition for you and ensure your lease is as important an asset to your business as it is to the landlord's.
Not only has outsourcing the management of retail leases proven to add to bottom line profit, it can also result in more favourable lending terms from financiers due to the improved risk/value proposition. And if those two outcomes are not enough, the sale value of your lease should you choose to sell your business during the lease term, will also be significantly improved.