Inertia is a powerful force in the universe, and is defined as “the tendency of an object to remain at the same velocity, or at rest, unless a force acts on it.” Observable in the realm of physics, this concept is often present in our own lives, as we pursue ambitious goals or take a day of rest. We can all think of times when it was hard to get off of the couch on a rainy day but we also know the feeling that once we start on an ambitious project it is easier to stay on that path to success. For example, I start every day with a long run outside no matter the weather. So many times it crosses my mind to get back in bed or pour myself another hot cup of coffee, but I force myself to hit the pavement and put one foot in front of the other. The health benefits and personal satisfaction that I feel from taking this action are indescribable.

In the world of contract drafting, legal departments and the people within them construct workflows that best suit their needs and which evolve over time to maximize their efficiency. This trait is valuable, as human nature allows us to generate the highest productivity with the tools that are available to us. Even though people may struggle with the complexity and tediousness of contract drafting, we work with familiar tools and processes.

Enter new technology. Technological tools are built to help people improve their efficiency, enhance their lives, and save time and money. Oftentimes, we may see how a certain technology can provide value in theory, but it feels unduly burdensome to adopt such a technological solution. If you have spent years establishing a workflow that you find productive, why spend the additional time and energy needed to adopt a new technology? We are fighting the laws of inertia, making it impossible to change direction without an outside force. Typically, change is motivated by fear and uncertainty with the future. These outside forces are powerful and can break the cycle of inertia. On the other hand, we can proactively resolve to make changes that will give us advantages in the future. We can overcome inertia and achieve significant progress with a few positive steps, once we become aware of the power of change and the tremendous benefits that can be realized from adopting new patterns of behavior.

Change can be uncomfortable, even scary. However, it can also be liberating and may give us a sense of joy and enlightenment from uncovering new horizons. The specific answer depends on each individual’s personality and motivations, but in my experience we need to first set a goal, take the leap, and then make small steps every day towards realizing that objective. Once we get started, it is often much easier than we imagined and almost always worth the effort.

I sometimes hear from prospective customers that while they love what they have seen and heard about LeasePilot, they just don’t have the time or bandwidth to think about adopting it “right now” and they ask me to follow-up with them “next quarter” or “in the new year”. I completely understand and respect this response, but simply don’t think it is the best way to improve. It is easier to think “I will do (fill in the blank) later when I have more time”. But when later comes, there are always other obligations and deadlines.

Simply put, there is no time like the present to adopt new technologies and solutions that can help improve our work and our daily lives. Inertia can stop us from changing, but it can also keep us moving on the path of progress once we get started.

 

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Creating, revising, and analyzing lease agreements can be a time-consuming and intricate process. However, the advent of Artificial Intelligence (AI) is revolutionizing the way professionals approach this crucial task.

Drafting with Precision: AI-powered tools are changing the landscape of lease drafting by providing a structured starting point. Rather than spending hours on research, users can now specify the provisions they need and any specific terms or conditions, and let AI handle the rest. This level of precision and customization ensures that leases are tailored to the unique requirements of each transaction. In essence, AI eliminates the “blank canvas” anxiety by offering a solid foundation upon which professionals can build, significantly reducing errors and streamlining the workflow.

Effortless Revisions: But AI’s utility doesn’t end with the initial draft. Lease revisions often involve navigating through dense legal language, making it challenging to ensure that modifications align with business goals. AI solutions further simplify the process. Users can specify the provisions they want to modify and describe the changes they’d like to make in plain language. This approach provides a structured platform for professionals to iterate upon, making revisions more accessible and ensuring that lease agreements precisely reflect their intentions.

In-Depth Risk Analysis: Beyond drafting and revising, AI also offers robust risk analysis capabilities, another critical aspect of lease agreements. Professionals can specify the provisions they want to analyze and describe their concerns. AI tools can identify potential risks in the lease language, providing valuable insights for making informed decisions. By allowing users to pinpoint and address specific risk areas, AI adds another layer of confidence to the leasing process.

Accurate Calculations Made Simple: Finally, AI simplifies complex calculations often involved in lease agreements, such as  the total net rent over the lease term. Users can specify the calculation they need, provide relevant details and variables, and rely on AI to perform the math. The result is not just efficiency but also increased accuracy in financial evaluations, reducing the risk of miscalculations that can impact the bottom line.

AI tools used in commercial real estate leasing streamline the process, reduces errors, and empowers professionals to make more informed decisions. It accelerates deal-making and allows experts to focus on the strategic aspects of their transactions. In an industry where precision and efficiency are paramount, AI is proving to be a game-changer.

As AI continues to evolve, its role in shaping the landscape of commercial real estate is undeniable. The future of commercial real estate lease drafting is here, and it’s driven by Artificial Intelligence.

In this fast-paced industry, the adoption of AI is reshaping the way professionals operate. One such AI assistant, LeasePilot Co-Pilot, has emerged as a valuable tool for commercial real estate leasing. With its advanced capabilities and user-friendly interface, Co-Pilot is setting new standards for efficiency and precision in leasing. As commercial real estate continues to embrace the potential of AI, tools like Co-Pilot are at the forefront of this transformative wave, making leasing smarter and more effective than ever before.

 

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Trick-or-treating has come and gone and as the weather turns colder, the temperature rises on the NFL season. For fans of the game, casual or passionate, there is much attention paid to contracts and the huge sums of money that are spent on our modern national pastime. I thought it would be interesting to briefly examine NFL contracts, their parallels with commercial real estate leasing, and lessons that can be learned.

Commercial real estate leases and NFL contracts should be viewed as living, breathing documents that set out the rules of the road for an ongoing relationship between the parties. These agreements cannot simply be filed away and ignored after they have been negotiated and signed. Instead, the documents must be referenced frequently and fully embraced by everyone involved to optimize their ongoing rights, duties, and benefits. Framing contracts in this way informs the parties that it can be enormously helpful to take a collaborative approach in negotiations. In order for commercial real estate properties and NFL organizations to flourish, the parties need to think of each other as partners and not as adversaries. The reputation of each side will live on long after the agreement has been inked.

A prime example of this framework is seen with percentage rent in commercial real estate leases and revenue sharing in the NFL. When a tenant’s success is enhanced by their location in an attractive retail environment cultivated by the landlord, then both parties share in the tenant’s sales success. Similarly, when the NFL generates eye-popping television contracts by showcasing excellence on the field, teams and players share in the resulting revenue. These contractual provisions align the interests of both parties to work towards a common goal.

Another overlapping concept in these agreements are termination rights. Landlords and tenants frequently have early termination rights, for a number of reasons or for no reason at all. Similarly, teams can typically terminate a player’s contract early and players can demand a trade to another team. Termination rights are negotiated to protect each party in the event that the contract does not meet their bargained for expectations. This dynamic creates motivation to foster a contractual relationship that is sustainable and mutually beneficial, again reinforcing the collaboration necessary for successful leases and NFL contracts.

As we lounge on Sunday afternoons this winter to watch football and as we go shopping for the holiday season, let’s remember that the purpose of contracts is to strengthen relationships between people. 

 

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Is green leasing a fleeting trend for the environmentally conscious or the blueprint for a sustainable, cost-efficient future in commercial real estate? As is usually the case, the answer falls somewhere in the middle and requires a nuanced perspective to uncover the potential benefits and challenges of this emerging strategy.

Green leasing, also referred to as “energy-aligned” or “high-performance” leasing, is a relatively new concept and has gained prominence only in the past decade. Its primary aim is to foster a sustainable built environment for the long-term. However, the advantages of green leasing can extend well beyond environmental considerations, benefiting both landlords and tenants in many ways. The advantages include reduced operating expenses, increased tenant attraction and retention, and enhanced asset valuation. Furthermore, financial institutions increasingly require sustainability standards to issue loans backed by commercial buildings and a growing number of cutting-edge real estate owners expect the buildings they acquire to have green leasing provisions throughout their tenant roster.

Green leasing is a multifaceted approach that relies on alignment between landlords and tenants. In these leases, landlords must undertake efforts to provide services, facilities, and building materials which comply with sustainability guidelines. There are a number of corresponding provisions which pass-through to tenants their pro rata share of sustainability-related expenses and include requirements that tenants operate, and make alterations to, their leased premises according to specified standards. In exchange, the parties realize cost savings and environmental protection through improved energy efficiency and consumption, water conservation, and waste reduction. Tenants and their invitees also enjoy enhanced quality of life with better indoor air quality and safer workspaces, promoting health and well-being. Landlords enjoy the benefits of high tenant satisfaction in optimized and sustainable buildings, helping to ensure the long-term value preservation of these buildings.

However, there are potential downsides to consider. Some view green leasing as an environmentally friendly but economically challenging endeavor. Initial cost outlays can be expensive, sometimes prohibitively so for landlords with older buildings. Additionally, green leasing relies on trust, as both parties must work together in utility metering, data gathering, and reporting mechanisms. Nevertheless, when executed effectively, green leasing can yield substantial economic benefits and foster a strong relationship between tenants and landlords, bolstering tenant satisfaction and contributing to high occupancy and rental rates for landlords.

While it is true that each property requires an individual evaluation to determine the feasibility of green leasing, I think the concept is here to stay for those who can make it work. In the right circumstances, green leasing can represent the future of sustainable, healthy, and cost-efficient commercial real estate building development and operation. While challenges remain, the potential for wide-ranging benefits and collaborative relationships between landlords and tenants makes green leasing a compelling choice for those who are able to embrace this forward-thinking approach.

Note: At LeasePilot, we are considering adding the capability to track sustainability provisions in the platform – please reach out to us if you are interested in discussing this feature.

 

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Adopting legal tech can often be met with pushback and one of the most overlooked aspects of building a strong business case is understanding your stakeholders’ motives. Building a case requires lawyers to think outside the box and consider who this legal tech solution will be impacting and what it will take to get the stakeholders on board. To help you understand this process a little better, we have put together a few tips on building an irresistible legal tech business case. 

Identify Your Stakeholders and Where They Fit In 

Oftentimes, in-house legal teams approach legal tech by focusing solely on the legal team itself. In a sense, this makes sense because it revolves around their department, but the benefits of legal tech go far beyond one team. Legal professionals must understand that the person signing off on the budget isn’t necessarily from the legal team. She or he may be a business user with responsibilities that extend to the entire organization, like the CFO, who needs to understand how the investment is going to benefit the business beyond the legal department.

When analyzing the quantitative and qualitative benefits of legal tech, you must focus on how it will benefit the broader business. For example, your business case should highlight the speed at which legal tech will deliver outcomes they need without any delays or hiccups which ultimately contributes to the bottom line. As soon as you can show the business-focused benefits, your business case will start to resonate with the stakeholders and become more irresistible. You will be able to present yourself as a partner in their success which is a win-win scenario that will get you the support of the business making your case stronger.

Focus on ROI and Justifying Your Investment 

Another important way to build a strong business case for legal tech is to understand the ROI. This means asking how many people are involved with this process? How often do we do this process? How long does this process take each time? By answering these questions, you’ll be able to calculate the total human hours for that particular task in a given week, month or year. This will also allow you to attach a dollar figure by multiplying the salary of the average lawyer which will calculate the cost of a certain activity. You will then be able to look at the equivalent before and after state and ask, “how does that compare?”. You should also be sure to factor in costs associated with the process which may include training, change management, switching costs and risk of execution and transition. 

Understand The Broader Corporate Strategy 

Moving your body is time well spent for anyone, especially those with a demanding schedule. Regular exercise helps keep your body healthy and helps combat stress by stimulating endorphins and reducing levels of stress hormones. 

Another important way to build a strong business case is to align your business case with the broader corporate strategy. In-house legal teams often make the mistake of building a legal focused business case and they may overlook the opportunity to think about how the adoption of this technology meets the strategic needs of the wider business. Once you align these two thoughts, you will be able to present your business case in a way that gives your company a competitive advantage. 

Legal software like LeasePilot helps legal teams streamline their processes so both attorneys and non attorneys can focus on accelerating business strategically. This means printing automated abstracts rather than spending countless hours summarizing deal terms. Never re-keying the same information into multiple systems. Generating transactional reports for lenders, investors, and buyers rather than have lawyers read and re-read the underlying leases ad nauseum. Ultimately, the impact is radically more efficient legal teams that free up a massive amount of wasted human potential so it can be re-directed toward pursuing more meaningful objectives.

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Lawyers are high achievers by nature and necessity. To succeed in the competitive, pressure-filled legal industry, successful attorneys have to have an exceptional work ethic and perseverance. But performing at a heightened capacity brings increasing levels of stress and mental health issues. 

Mental Health is a complex issue that still has some stigma surrounding it, especially in competitive industries like the legal industry. Since the pandemic, we have only seen these problems become more evident. There has been a significant rise in people feeling copious amounts of stress, depression and anxiety.  

As such, this blogpost will focus on ways to identify and cope with the mental health issues that can come with working in the legal industry.

How to Identify Stress 

Stress is the body’s response to pressure. When we experience pressure, our bodies produce stress hormones which trigger a fight or flight response. In its healthiest form, stress can be helpful and can aid in our motivation to get things done. Once that stressful event has passed, our body’s stress hormone level returns to normal. However, this is not always the case. Periods of prolonged stress might leave you feeling overwhelmed and unable to recover, giving rise to mental or physical health issues. 

How to Cope With Stress 

Talk to Someone

Talking to someone you trust or therapist you feel comfortable with can be a powerful step for lawyers to proactively improve their mental wellness. In addition to helping you develop good coping mechanisms so you can manage stressful situations better, therapists can act as a non-judgmental outlet to vent. 

Move Your Body

Moving your body is time well spent for anyone, especially those with a demanding schedule. Regular exercise helps keep your body healthy and helps combat stress by stimulating endorphins and reducing levels of stress hormones. 

Create Boundaries 

A lack of strict boundaries is a major source of stress for lawyers. To help manage stress, it’s important to set and express your workload limits and boundaries. For example, if you’re a solo lawyer, set a realistic limit for how many clients and how much work you can take on. Then, make sure you stick to it.  If you work at a law firm, if possible, tell your boss when too much is too much. While this may seem uncomfortable, knowing your limits can help keep the detrimental effects of lawyer burnout at bay.

Practice Mindfulness 

You can’t eliminate stress, but you can change how you respond to it. This is why mindfulness is so powerful. Mindfulness—or learning to pay attention and stay present in a moment—may seem simple, but it can be challenging to slow down and focus your stressed mind. 

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The role of a general counsel is rapidly changing in today’s world. A part of that change is a mutual desire for a GC to be considered a trusted advisor. Many GCs want to function as a strategic partner to the business rather than a legal function alone. For GC’s looking to make this transition, it is important to take initiative and focus on how you can become a dynamic resource to the broader business. 

Becoming a Strategic Partner

Establishing Relationships with Stakeholders 

It is important to close the gap between the legal department and other departments in the business. To do this, you need to establish relationships with the key stakeholders of these departments. These stakeholders can provide you with the information needed to thrive in your position. 

Understand Every Department 

Becoming strategic means you need to gather a deep understanding of how other departments operate. You should take the time to understand their leadership, what pressures they are facing, and the projects they are currently working on. Having a good read on upcoming initiatives is crucial. This allows you to think ahead and identify potential legal concerns on the horizon. 

Get Involved  

It is important to become as involved as possible from the get-go. This allows you to identify opportunities while protecting the growth of your company. You’re able to have foresight of timelines and manage expectations, reducing the likelihood of being seen as a blocker to accelerating business growth. 

Unlocking Value  

Little tasks get in the way of accomplishing big tasks and most in-house lawyers have quite the range to cover. 

At LeasePilot, we’re helping legal teams streamline their processes so both attorneys and non attorneys can focus on accelerating business strategically. This means printing automated abstracts rather than spending countless hours summarizing deal terms. Never re-keying the same information into multiple systems. Generating transactional reports for lenders, investors, and buyers rather than have lawyers read and re-read the underlying leases ad nauseum. 

Ultimately, the impact is radically more efficient legal teams that free up a massive amount of wasted human potential so it can be re-directed toward pursuing more meaningful objectives.

To learn more about LeasePilot and get the latest on commercial real estate trends

The commercial real estate industry is changing direction. In previous decades we saw irregular progress of technological advancement but after the pandemic, we are now witnessing a disruptive shift in demand for buildings to use technology. Technology can enhance the tenant experience, strengthen management and optimize the space and resources within. Where smart technologies were once a nice-to-have feature for modern buildings, today they are critical for addressing prominent marketplace issues facing property managers and owners. 

Climate Change 

On average, 30% of the energy used in commercial buildings today is wasted. Before the pandemic, commercial buildings consumed 13.6 quadrillion BTUs of electricity and generated 826 million metric tons of carbon dioxide emissions. While 2020 saw the most drastic declines in energy usage since 2012, the long-term outlook projects that commercial buildings will increasingly contribute to global carbon emissions for decades to come. Smart buildings are the only realistic solution to changing that trajectory for the better. 

PropTech conserves energy by automatically adjusting the lighting, temperature, and ventilation based on the requirements at a particular time. The research suggests the energy expenditure accounts for almost 19% of the total operational cost of a building. For most of the small-scale and medium-size companies, a 10% reduction in energy can positively impact their profitability by 1.5%.

Hybrid Workplaces 

Employees may finally return to the office this year, but likely not full time. Most workers say they want to collaborate with colleagues in the office sometimes and work remotely at other times—although not if the experience is going to be frustrating due to poor scheduling and disorganized workflow.    

Hybrid workplaces come with a host of complex issues around facilities management. Space management technology is essential for a successful hybrid workplace, allowing employers to process real-time data, automate tasks and provide a superior employee experience.  

This could include anything from contact tracing, cloud productivity tools, planning software or Space management technology.

Smart Buildings 

Energy-efficient properties or smart buildings are the structure that uses technology to automate a building’s operations including lighting, heating, and security. Smart buildings increase efficiency to minimize energy waste. 

Long after the current pandemic ceases to dominate our everyday lives, the advantages that smart building technologies provide to our work environments will continue to improve our day-to-day experiences. Buildings that invest in creating the best tenant experiences today will surely have a competitive advantage for years to come.

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The real estate cycle is a four-phase series that reports on the status of the commercial market. The four phases include recovery, expansion, hyper supply, and recession. Understanding the real estate cycle can help you forecast trends and make informed decisions about your investments.

Recovery 

While the recovery phase is often listed as the first phase, the real estate cycle is circular and ongoing. In the recovery phase, the real estate market begins at a low point from the recession. Occupancy and rental rates are low, and new construction starts slow but eventually rises in strength. Experts look at trends like gradual occupancy increases or growing demand to identify when the recovery stage has begun. The recovery phase is a popular time for real estate investment and speculation since prices of properties are low, so the potential eventual return on investment from operation or resale is high.

Expansion

The expansion phase is characterized by an improving economic outlook. This could mean that wage growth may begin to rise and new job growth is positive. People tend to follow jobs which means that strong job growth may lead to an influx of new residents, which creates a healthy cycle of demand. When new residents arrive, demand for housing increases. In response to new residents, new businesses including retail and offices pop up to accommodate them, which leads to an increased demand for commercial space.  With increasing demand for commercial property and limited supply, rents tend to rise and new construction begins to take shape, and so on. The expansion phase is considered to be an excellent entry point for real estate investors because increasing rent growth, occupancy rates, and rising property prices are all good indicators of a strong investment return.

Hyper Supply

In some cases the expansion phase can get carried away.  When it does, there is an influx of new construction and new projects looking to take advantage of the growth.  If these new projects move too quickly and there aren’t enough people and businesses to fill all of the new space, hyper supply can happen. 

In hyper-supply, space outweighs demand. In this case, the most logical response is to lower prices to stimulate demand. As an investor, this is a time to hold your ground. Property owners will often liquidate their inventory out of fear that their properties will go vacant or unsold. This is a great time to take an opportunistic approach; identify properties that you feel confident will perform well in the next real estate cycle.

Recession 

The recession phase is one we’re unfortunately all too familiar with. If there are enough defaults, and the losses pile up, real estate markets enter the recession phase, which is characterized by falling rental rates, declining property values, job losses, property foreclosures, and companies going out of business.  In this phase, the oversupply of properties is far more than demand and the general economic climate is poor.  In the Great Recession in the early 2000s, the recession was triggered by a frenzy in residential real estate and the financial products designed to support it.  An initial economic downturn triggered a wave of job losses, which triggered mortgage loan defaults, and significant losses in the financial products backed by the same mortgages. Those losses spread across the economy. 

A recession provides the opportunity to purchase distressed properties at a deep discount. There will be an increase in real-estate owned properties, which are properties that have been foreclosed upon and repossessed by lenders. This is your opportunity to buy great properties with great savings. You can hold these properties (or add value if you see fit) so that they are ready to hit the market just as the economy begins to recover.

Summary 

The real estate cycle is a concept that any real estate investor must understand if they strive for long-term success. Phases of the cycle are impacted by a variety of economic factors including: interest rates, demographic shifts, and governmental policy. All four phases of the cycle – recovery, expansion, hyper supply, and recession – cause the real estate market to shift significantly, so investors must stay knowledgeable to find opportunities. 

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