It’s easy to fall into the trap of thinking that the industry we’re in is the most important part of everyone else’s world, too. And within that world, it’s typical to focus on where the most money is being directed. In real estate, the commissions are lucrative; therefore, the transaction piece gets a great deal of focus; However, that transaction is just the beginning of an even more expensive and very important cycle that repeats itself potentially for years and years into the future. Consider the full life cycle of a real estate lease. The myriad of details within each of the boxes need to be considered throughout this process and coordinated with the various “players” involved in each area.
You may conclude that while transactions play an important role in space selection and periodic re-negotiations, the daily processes making up the Lease Administration Cycle are just as crucial. The expenses that take place throughout this cycle have a dramatic impact on the performance of that space within an overall strategy. Accordingly, the details of this process need to be carefully managed. What weighs in the balance is the difference between a run-away cost and value creation/realization by the business unit and enterprise.
What do you think “lease administration” is? And have you ever considered the total value potential of this function? ASKPSG.