10:45 4 October 2019
Post by: WBJ

How to lease property correctly?

Many building owners regularly lose money as a result of working with incorrect leasing data. Having accurate, up-to-date information could boost real estate owners’ rental income by millions over the course of a lease contractsurement

How to lease property correctly?

The record disparity I have come across between a client’s actual lease space and what was on paper was 30 percent over five years. The same measuring norms and the same leasing conditions cannot increase the building size when tenants change. This is not a stand-alone case; it is a very common mistake. One of our clients charged a tenant for 50 sqm when in fact it was 250 sqm. The error was not noticed for several years, and – for obvious reasons – the tenant remained quiet. This is also a common occurrence. Correct space calculations are vital for real estate owners and, luckily, such mistakes can be remedied.

After 12 years of working in real estate and having measured 6 million sqm of space, we realized there was a niche in the market. Inefficient space calculations and rent rolls were generating millions in losses each year.

I have seen rent rolls containing data for even dozens of buildings in one spreadsheet. The authors of these spreadsheets claim they want to make their jobs easier, but in fact they lose all control of what is in these spreadsheets. One of the key functions of Geodetic Rent Roll (GRR), a product our team created, is automatic data cross-checking between the rent roll the property manager prepares and the current measurements of the building. Our Geodetic tab contains a range of data (including space leased by each tenant, total gross leasing space, total office, retail and warehouse space etc.). This is also where common areas are calculated for each floor and for the building; both the actual measurements and those cited in the contracts. Measurement data is automatically exported to the rent roll tab where the property manager can safely calculate rent, common areas, discounts, parking space fees, warehousing charges, contract dates and terms, space handover dates and insurance data etc. If they make a mistake and the control sum of the total gross building area is different from the real measurements, an alert will appear. The property manager’s work is automatically exported to the invoicing tab and can be filtered for each tenant, even when their premises are located on different floors. You can also filter by space type (e.g. warehouse, garage), which means the manager is sure that the right data is put on the invoices.

Rent roll carries confidential data. That’s why we allow two-tier access – one from the Geodetic-Dropbox account and another for the Manager Member (the client), directly from GRR. Data is protected by a password that the client assigns and they decide whether they want to give access to the property manager, the accountant or the analyst. By keeping the file in the cloud, the client can maintain control over projects and be up to date with their team across the globe. It’s a convenient solution for international investors and people travelling on business.

It's common that when several people work on a single file, data may be overwritten or lost. We’ve created a number of safety measures: notices, alerts and synchronizations, file retrieval for up to 120 days, to name a few.

Data is of paramount importance when leasing property. We helped to generate an additional PLN 2.3 million in annual profit for a client with an 80,000 sqm office building in Warsaw. GRR means no more outdated rent roll files and no more losses due to incorrect calculations. You can learn more about the product at www.geodetic.co/grr

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