The state of Georgia is one of the most efficient managers of its 2,000 office leases, with only a staff of 10 people each managing a portfolio up to 300 properties including renewals and expansions, plus new lease transactions.
Today, Louisiana Commercial Realty met with the State Properties Commission to discuss challenges and solutions to managing the multitude of lease contracts with such a small staff. Since the Properties Commission has most of the government agencies as clients, there are always state budget restrictions that sometimes conflict with the needs of the client so a strict process and procedure is followed which is not usually found with non-government office tenants. There are similarities however, such as competing stakeholders with different objectives, which often leads to conflict.
Robert Hand, president of Louisiana Commercial Realty, discussed solutions to conflict that arises from managing so many leases, and described several scenarios detailing how methods of communicating between the many parties involved can build trust. One technique discussed is when all parties, including the agent, landlord, future tenant, and attorney are first interviewed to discuss needs and then involved in developing a timeline and benchmarks.
Hand summarized, "First you meet with your client, who in this case is a state agency, to determine their needs, then you educate them on what works in the existing marketplace and within budget. You build trust by telling people what you are going to do, then doing it, then reminding them what you did."
Hand discussed how negotiating lease contracts can be simplified by categorizing the various lease terms and weighting their importance. In any lease agreement there are variables, such as the base lease rate, rent escalators, hours of access, after hours air conditioning costs, janitorial costs, tenant improvement allowances, renewal options and cancellation language. Identifying known and unknown risks among these variables can help a tenant determine where they are most vulnerable and negotiate in the lease to transfer that risk to the landlord.
Since each staffer manages up to approximately 300 leases, staying organized is a must. Hand shared technological strategies the staffers could use to stay organized, such as implementing a software system to track lease expiration and terms, recording discussions with vendors and clients, storing documents and each stakeholder's contact information. Staffers in the field can also use old school Microsoft Outlook to sync notes and appointments between iPhone and a laptop so being out of the office doesn't mean being out of touch.
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