How to get your outside counsel on flat fees (and have them love it).

Most CRE companies using outside counsel would jump at the chance to pay their lawyers a flat fee for every deal. Law firms, however, aren’t typically so enthusiastic about the idea. So how can you get your outside counsel on board with flat fees? One of our customers came up with a pretty clever solution:

They looked at their total spending on outside counsel in a 12-month period and divided it by the number of lease deals they closed in that time. To keep the math simple, let’s say they did 50 deals in a year and spent $500,000 on outside counsel, an average of $10,000 per deal.

Next, they calculated the projected efficiency gains LeasePilot would bring to the outside counsel’s workflow, which amounted to about 35%, or $3,500 per deal. With these numbers in hand, they approached outside law firms with a proposal: the company would provide law firms with the LeasePilot software and pay a fixed fee of $8,250 per deal, which amounts to splitting the $3,500 savings between both parties.

The switch to a fixed fee structure was a no-brainer for all involved. The lawyers would be making more money by spending less time on each lease, and the company would save money on every deal (and get it done faster). The entire process was more predictable and everybody came out ahead. Who doesn’t love that?

Smart Contracts vs. Traditional Contracts: Can We Bridge the Gap?

By now, you’ve no doubt heard about the meteoritic rise (and fall) of cryptocurrencies like Bitcoin. If you’re following the crypto market closely, you’ve probably also heard about blockchain, the underlying tech behind cryptocurrencies. But cryptocurrencies are just one application of blockchain technologies, and we’re just now beginning to think about the myriad applications blockchain has in everyday life. One application which is of great interest to us at LeasePilot is contract security and enforcement, the product of which is known as a ‘Smart Contract’.

So what is a Smart Contract? It starts with the Blockchain, which is a technology of continuously growing records, enabling verification of transactions that are trackable and irreversible. The blockchain is capable of incorporating computerized sets of rules and mechanisms which are collectively referred to as a Smart Contract. Smart contracts are, in essence, computer programs that automate the enforcement of terms. Traditional Contracts, on the other hand, are sets of agreed-upon terms which are enforceable by law and are described in a natural, human language.

Will Smart Contracts replace Traditional Contracts? I’m inclined to say that they won’t. Not entirely, anyway. A Smart Contract works well when terms and conditions are straightforward, objective, and quantifiable. But when it comes to subjective T’s and C’s, the binary nature of a Smart Contract falls short. It’s also important to point out that ultimately, contracts represent an agreement between humans, not machines. Since most of us mortals aren’t capable of easily abstracting the kind of mathematical, deterministic language used by Smart Contracts, the Traditional contract is here to stay.

So what, if anything, connects the two? And what are some potential implementations of combining the two approaches? There are in fact multiple clear similarities between the two. At a high level, they both describe a series of situations and responses. One possible application would be using a Traditional Contract during the negotiation phase that, once signed, would be translated into a Smart Contract which would handle validation and enforcement.

But is this even possible? Will standard agreements and contracts self-execute sometime in the future? The feasibility of bridging the gap still remains to be proven. We’re experimenting with a few exciting technologies to see if that gap can in fact be bridged. Our first step is exploring ways to build standard agreements and contracts from structured data as a way to facilitate a safe transition from the Traditional Contract to a rule-based computer program.

3 Things that Need to Change in Commercial Real Estate

Recently, we published a brief QA with our Director of Customer Success, Nadine Ezzie. Having spent several years as the GC of a commercial real estate company she’s seen the best and worst the industry has to offer, so we asked her to identify three things she’d like to see changed. Her answers deserve some elaboration:

1. Embrace Emerging Tech to Drive Efficiencies

It’s no secret that the CRE industry is behind the times when it comes to adopting emerging technologies in the workplace. But as a former GC, I’m sympathetic to the reasons why the industry has been slow to change. Consistency and reliability are hugely important to the business—real estate is the backbone of the economy, and changing the way things are done is a risky proposition. “If it ain’t broke, don’t fix it,” the old saying goes.

But the argument to adopt a more modern approach to doing business is a strong one that is becoming increasingly difficult to ignore: embracing technology and automation tools leads directly to gains in efficiency and productivity. We’re not talking minor gains and small steps forward here, either. These are giant leaps forward, and it doesn’t take an MBA to figure out that these leaps in efficiency and productivity are directly related to a better bottom line for those willing to embrace these changes.

So for the risk-averse, there are strong incentives to resist change. For the risk-takers, the incentives are inverted. The sweet spot, as always, is somewhere in the middle. As a lawyer, I’m generally risk-averse and lean towards proven processes. Lease agreements protect both the landlord and the tenant, so priority #1 is ensuring the lease is done right the first time, every time.

LeasePilot won me over. Literally. I left a well-respected position coveted by many to help build something I knew was going to change the industry. The software hits that sweet spot where it introduces automation and document management into the leasing workflow without fundamentally altering the process.

2. Increased deal transparency

Thought exercise: name an industry that plays a role in every sector of the world economy; an industry which nearly every business in existence relies upon. While I’m sure a few examples exist, the only industry I can think of that matches the above criteria is commercial real estate. But despite its overarching reach and enormous influence on the world economy, CRE remains a tight-knit, niche industry.

In every real estate market, the overwhelming majority of transactions run through a small handful of top players. These big players have near-total omniscience in their markets. These major players know about every deal in town, and in most cases, they know the details of those deals.

While this level of market intel is a boon for the established CRE companies, it puts everyone else at a disadvantage: the lack of available data on past deals makes it very difficult for tenants and buyers to negotiate deal terms effectively, and for new entrants in the market, it serves as an enormous barrier to entry.

Public access to anonymized leasing data would certainly help level the playing field and increase competition in the market. In the long run, that’s good for everyone—even the big guys.


3. More women and minorities in leadership positions

Opinions on this can get political real quick, so I’ll let the data speak for itself:

CRE demographics

ICSC NYC 2017: 3 Takeaways

Our three takeaways from ICSC1. Rumors of retail’s demise have been greatly exaggerated

The narrative that consumers doing more of their shopping in virtual storefronts and many big box retailers are struggling to stay afloat isn’t a new one. To a certain extent, it’s true. When it comes to selling low-margin, commodified goods, traditional retail outlets just can’t compete with virtual storefronts. Rather than trying to compete directly with e-commerce, brick-and-mortar retailers have smartly chosen to adapt and embrace a modernized retail model.

This new paradigm, called omnichannel retail, focuses on a more personalized shopping experience with a hook that offers what digital can’t: real, tangible experiences.

Bottom line: Retail isn’t dead. It’s been reinvented to better fit the way modern consumers shop.

2. Food trucks are awesome—when it’s warm

In the past, the lunch offerings at the Javits Center left us feeling empty (literally). The food trucks were a major upgrade, albeit with one huge caveat: December in NYC is cold.

3. Everybody knows their ABCs (Always Be Closing)

After returning from the conference, we were asked, “Describe ICSC NYC in 5 words or less.”

That’s easy:
Deals, Deals, Deals. Additionally: Deals.

Trade shows like ICSC offer unparalleled opportunities to network within the CRE industry. Everybody brought their A-game.

What’d we miss? Let us know in the comments.

Meet the New Director of Customer Success

We’re growing! Nadine Ezzie joins us as the Director of Customer Success. Formerly General Counsel to one of Cleveland’s largest privately held commercial real estate owners and developers, Nadine brings a wealth of knowledge and experience to the LeasePIlot team. Here’s a quick introduction:

What do you do at LeasePilot?

As Director of Customer Success, I’m responsible for ensuring our customers’ experience using LeasePilot is, as my title suggests, a success. We’re inviting folks to trust us; to transition from a process they’ve been using for a long time to a better—albeit different—process. It’s my job to ensure that new customers make that transition as smooth and seamless as possible.

As the former General Counsel of a commercial real estate company, I have specialized insight into not only how a lease functions, but also what our customers need, what they want, and what they may struggle with in transitioning to a new product. Not that long ago, I was sitting in their seat and I share their point of view and perspective. It’s my job to make certain onboarding is a success, that they become comfortable and successful in using LeasePilot, that any questions or problems are handled quickly and efficiently, and to constantly think of ways to make the process better.

What were you doing before joining LeasePilot?

Most recently I was General Counsel of a commercial real estate company in Cleveland, Ohio where I focused on leasing, acquisitions, and financings. Before that, I worked as Deputy General Counsel of a company specializing in VoIP communications. I always preferred working in-house with corporations as opposed to being outside counsel as I wanted to be closer and more involved with strategizing and the day-to-day operations of a company.

Was the transition away from law something you’ve been considering for a while? How did you end up at LeasePilot?

It was. It started out as a slight bug that I kept ignoring but it grew until I could no longer ignore it and I had to do something about it. Being in-house counsel of a company, you’re exposed to its daily operations. You see how things tick, how ideas are born, how they’re tested, re-tested, etc. I love practicing commercial real estate law but was ready to use those skills in a new environment with new challenges; challenges that provide the ability to learn new skills.

The story of how I ended up at LeasePilot is a rather interesting one. I knew I wanted to make the transition away from my role as in-house counsel, but I didn’t really know where to begin and I hadn’t really started the process of actively looking for something new. My first encounter with LeasePilot was when they reached out to me to sell me the product! After seeing a demo, I immediately knew LeasePilot was going to change the industry. I had to be a part of it. In typical Nadine fashion, I took it one step further; I responded to the job posting for Director of Customer Success and the rest, as they say, is history.

As an expert in the commercial real estate field, what would you say are the top three things in the industry that are ripe for improvement?

  1. More women in senior positions
  2. The use of technology to streamline slow/archaic processes
  3. Increased deal transparency.

What’s the most unexpected thing about your new role so far?

I tried my best to come into this role with little to no expectations which can be challenging for an attorney. The biggest surprise so far is how much I love working on the product development side; specifically, learning our “code” and how it makes LeasePilot work. I’m exposed to sequences I never could have imagined yet somehow, it’s starting to make sense to me. That ability to see something entirely new and actually process and understand it is something I continually strive for; constant and never-ending education.

If you hadn’t started out in law and instead pursued another field, what do you think you’d be doing now?

I studied Finance and Investment Management in college and so briefly had my eyes on Wall Street. I imagine I would have started on Wall Street but quickly become disenfranchised with the environment and gone in a different direction; where, who knows. That’s the beauty of all this, life will go wherever you want it to as long as you’re willing to take the chance. Last month, I was a practicing attorney. Today, I’m helping build a software for the real estate industry from the ground up.

What do you hope to cross off your bucket list over the next 5 years?

If I’m being honest, I’d like to become COO of a company, become a mother, and live abroad at some point. Friends always tell me I should run for political office and I would be lying if I said that wasn’t in the back of my mind as well. And oh yeah, stand-up comedy. Definitely stand-up comedy.

If you were writing a memoir, what would the working title be?

“I’m not gonna lie..” I’m known for my brutal honesty coupled with sarcasm. You know it’s coming if I start a line with “I’m not gonna lie…”

Lawyers discuss how to leverage technology tools and eliminate redundancy at ICSC Law

LeasePilot will be leading a discussion on how commercial real estate companies are “using web-based collaboration to streamline lease negotiations” at ICSC Law Conference Oct 27th in TX.

Real Estate lawyers continue to look for ways to streamline the leasing process. Lawyers spend an inordinate amount of time with outdated, manual tools like Microsoft Word and email. New technologies like Slack, Google Docs and Skype are making communication and collaboration easier.

As the leading pioneer in the lease automation space, LeasePilot will facilitate an engaging discussion of new technology options and their benefits.

Join your peers in the discussion about technology solutions that can streamline leasing, meet us at ICSC Law on Oct 27. link to event info

If you are unable to attend but would like to learn how SaaS solutions can dramatically improve your leasing process, contact LeasePilot here

Prominent Property Owners and Developers Get Hands On with New Leasing Technology at ICSC

LeasePilot joins the International Council of Shopping Centers (ICSC) to modernize leasing operations for property owners and developers while improving the service they provide to their tenants.
The current lease process is a manual and laborious task. Property owners and developers know that retail leasing relationships can be risky if there are errors, inconsistent provisions, or a deal is lost.
LeasePilot provides an innovative technology solution for property owners and developers to improve service to their tenants while reducing business cost and risk. Companies that have discovered the benefits of LeasePilot include Casto, Kite Realty Group, and Hajjar.
LeasePilot will be exhibiting at ICSC Western on Oct 2-4 at booth 2447.

Top Five Articles for the Retail Industry in May

May was another busy month in the retail industry so it’s no surprise that a lot of interesting and relevant articles continue to be published.  We know everyone is busy and that keeping up with the latest and greatest news can be overwhelming when you’re putting out daily fires left and right.  So, just as we did in April,  we’ve done the hard work for you and sifted through everything to find the very best and most pertinent articles from May.

Predictably, many of the top articles from this month correlate to the top trends in retail for 2017 that you and your peers voted on and that we shared a couple weeks ago.  After all, they wouldn’t be trends if they weren’t hot topics in the news.

Given all the hoopla about the demise of the retail industry, many articles are written with a negative slant.  One suggestion when reading this month’s articles: try looking at them glass half full instead of glass half empty.  For instance, there is one article about robots eliminating retail jobs.  Instead of focusing on the elimination of jobs, try to think about the exciting opportunity impact that robots could create.  Another article focuses on increased store vacancies boosting the number of pop ups.  Instead of focusing on the store vacancies, think through the creative ways to fill those vacancies.  To keep up with this optimistic approach, we even included an article talking about how the future of malls isn’t as gloomy as many people are making it out to be.

Without further adieu, check out the top five articles (in no particular order) from this past month.

  1. Robots Could Wipe Out Another 6 Million Retail Jobs (CNN)
  2. It’s More than Amazon: Why Retail is in Distress Now (CNBC)
  3. Pop Up Goes the Retail Scene as Store Vacancies Rise (New York Times)
  4. This is What Will Happen to All the Empty Stores You’re Seeing (Forbes)
  5. Shopping Mall Executives Say the Future Isn’t So Gloomy (Bloomberg)

We hope you find these articles interesting and relevant to your work.  If you come across any interesting articles in the future that you think we should highlight, please don’t hesitate to reach out and share them with us!  Also, make sure to follow LeasePilot on LinkedIn for up to the minute news and updates.

Top Trends in Retail Real Estate for 2017

There are plenty of articles on the internet that address relevant trends in retail real estate.  Often these articles are written from one person’s perspective or from the vantage point of one segment of the industry.  The articles are interesting, but they don’t necessarily tell the whole story.  So we took matters into our own hands.

A few weeks ago, LeasePilot sent out a poll to approximately 1,000 retail real estate professionals from all corners of the industry to gauge the top trends of 2017.  Cue the drum roll…the results are in…

The top 3 trends for retail real estate in 2017 are:

  1. Densification/Urbanization and Smaller Store Formats.
  2. The Impact of Amazon on the Retail Landscape.
  3. Big Box Bankruptcies.

Other top trends receiving votes include: (i) the emergence of pop-up stores, (ii) the rise of experiential shopping/dining/entertainment, and (iii) the disappearing middle class: splitting into low end (Dollar Tree) and luxury (Tiffany’s) retail.

Do you agree?  Disagree?  Are you shocked that something was left off the list?  We’d love to get additional feedback.  If you didn’t get invited to participate in the poll (we’re sorry) or you simply forgot to respond (we get it, you’re busy), your insight is still valuable!  Simply click here and share your perspective on the top trends in retail real estate for 2017.

One of the biggest takeaways here is the manner in which the trends strike at the very core of the industry – leasing.  For instance, the trends discussed above impact such fundamental leasing concepts as premises size (smaller store formats), term length (the emergence of pop-up stores), in-store sales (the impact of Amazon on the retail landscape) and premises usage (the rise of experiential shopping/dining/entertainment).

The fact that the 2017 trends don’t simply tinker around the periphery of the industry is telling.  It reinforces the fact that the evolution of retail real estate is very real (this was also one of our takeaways from the ICSC RECon conference) and not just a passing fad.  Real estate companies and retailers will fail if they don’t evolve as well.  With core functions such as leasing, there is a tendency to ere on the side of being conservative.  But the strongest companies in five years will be those that are right now able to be nimble, think outside the box and be creative with leasing while simultaneously balancing the need to reduce risk and maintain institutional control/consistency.  Easier said than done.

Reflections from ICSC RECon 2017

During my long flight back across the country after ICSC RECon, there was a lot of time to reflect on the previous few days of jam-packed action.  For those who don’t know, ICSC RECon is the preeminent retail conference in the world bringing together over 30,000 people from real estate companies, retailers, brokerage companies and other service providers for educational sessions, keynote speakers, and above all else, DEALMAKING!

There is nowhere better to get a feel for the state of retail real estate than at this conference.  And with that in mind, here are 4 takeaways from this year’s conference:

1) Why do they even have educational sessions?

The conference brochure includes a packed schedule of educational sessions.  But let’s be honest.  This conference is not about education.  It’s about DEALMAKING.  It seemed like everyone was booked with back-to-back-to-back meetings all day every day.  Meetings to review old deals.  Meetings to get deals in progress done.  Meetings to talk about prospective deals.  Meetings to talk about other meetings.  Almost a year’s worth of work can get set up in just three short days at this conference.

2) The death of retail is a myth.

This industry is not dying.  If this conference was a funeral for the retail industry, let us all be so fortunate to be remembered with so much energy, excitement, optimism and passion.  There is far too much activity for it to fold and simply wither away.  Are there changes coming?  No doubt.  No industry can stay the same forever.  But the exciting thing is that there is an understanding of existing challenges and a commitment to embracing change.

3) The evolution of retail is real.

Look no further than two of the keynote speakers at the conference: Steve Wozniak (co-founder of Apple) and Barbara Corcoran (“Shark Tank” investor and real estate magnate).  Both are transcendent innovators.  Think that was a coincidence?  Retail real estate is evolving and doing so at a rapid speed.  This can create fear, but it also creates opportunity.  Those real estate companies and retailers that embrace the opportunity will be much better off than those that react based on fear.  Which side of this line is your company on?

4) The retail industry knows how to have fun.

The level of dealmaking at this conference is great.  But perhaps even more impressive, is that it takes place without sacrificing any of the partying.  People in the retail industry really know how to party.  The big corporate parties are top notch – such as those by pool at the Bellagio (well done New York Developers) and at the Marquee Night Club (very impressive Newmark Knight).  And the bars and gambling tables are filled up every night with people from all avenues of retail real estate.

ICSC does a great job with RECon.  If you’ve never been before, you should check it out next year.  Simply walking through the exhibit halls offers a perspective on the industry that can’t be gained anywhere else.