For commercial real estate organizations the lease closing period is crucial.  This is the period that starts when the letter of intent gets signed up and ends when the final signature on the lease is inked.  This can be an extended period of time and the need to move things along is intense.  As soon as the lawyer gets the LOI, she is under immediate pressure to turn around a draft.  And as soon as she receives the tenant’s comments, she is immediately asked, “when will you turn the next draft?”

But why is there so much time pressure to complete a lease?

There are a 3 factors unique to leasing that create such intense time sensitivity for Landlords:

1. tenants only make a minimal investment in the deal until the lease gets signed up,
2. there is often intense competition for tenants fed by tenant brokers, and
3. the cost of losing a transaction is steep.

The combination of these 3 factors makes the lease closing period exceptionally risky for a Landlord, which in turn creates the extraordinary time pressure we are all familiar with.  Given this risk, you would think the process of negotiating, documenting and closing a lease would have evolved into an extremely efficient process laser focused on closing the gap as fast as possible.  It hasn’t.

There are two principle reasons for this:

• the coordination between leasing teams and legal departments is a bottleneck, and
• the technical process of drafting a lease is uniquely inefficient and time consuming.

Solving for these two problems holds the promise of dramatically reducing the amount of time it takes to close a lease, and eliminates much of the transaction risk associated with the leasing process. Check out www.leasepilot.co to see how LeasePilot is tackling these and other problems plaguing the commercial real estate industry.

In my article “Why is Leasing So Time Sensitive?” I identified two underlying factors that make the process of getting a lease finalized and signed-up unacceptably long. In this Article, I take a look at those factors and provide solutions.

Unnecessary Coordination Causes Bottlenecks.

The leasing representative negotiates the Letter of Intent (LOI) and gets the transaction approved. She knows the building, the tenant’s specific requirements and the market drivers that make the deal work. It’s the lawyer’s job, however, to transform an LOI into a lease document. But the lawyer is missing key information that the leasing representative possesses. Without that information it is impossible to prepare a lease. And so, the leasing representative and lawyer exchange emails and drafts and have calls or in-person meetings to get the document right. This process of emailing and talking and then talking and emailing sucks up an enormous amount of both the leasing representative’s and lawyer’s time. Limiting these interactions, therefore, dramatically reduces the amount of time required to iterate and finalized a lease document.

Outdated Tools Make Drafting a Lease Unacceptably Slow.

In addition to communication, the other main source of delay is the act of drafting the lease document itself. Turning complex drafts can often take 4+ hours of concentrated legal time. Given a specific attorney’s priorities and workload, freeing up that time may take a week or more. A lease, though, is a predictable document. The business outcomes for the various terms of a lease are numerous, but ultimately finite. Nevertheless, lawyers are generally required to either re-draft complex provisions whole-cloth, or rifle through old deals to find an appropriate starting point to work from.

But what if lawyers, paralegals and leasing representatives could assemble leases by accessing a database of leasing provisions specifically tailored to their organization and forms? And what if that database of provisions could be infinitely customized on the fly for a specific transaction and then recalled for later use?

Document Automation + Specialized Word Processing = Speed.

LeasePilot does just that. LeasePilot gives leasing representatives the tools to “assemble” a lease to fit the transaction on their own while providing attorneys a powerful word processing system specifically designed to expedite the drafting of customized lease provisions. The result: more of the lease is handled by the person that knows the transaction best, the leasing representative, in less time than she used to spend communicating with her lawyer. And the lawyer can focus where her expertise is needed.  Email chatter is minimized, drafting time is accelerated and leases are closed faster.

All things equal, would you choose to use an old fashioned typewriter or a computer? A computer of course.  Why?  Better quality.  Better efficiency.  Better interoperability with other tools you use on a day to day basis.  Real estate companies are now faced with a similar choice when it comes to leasing.  Does it make sense to continue drafting and editing leases the old fashioned way or use lease automation software?  This article explores why the old fashioned way should no longer be acceptable to real estate companies.

The old fashioned way means relying heavily on tools not designed specifically for leasing, in particular, Microsoft Word.  There are two main byproducts of using Microsoft Word as the primary tool for leasing:

1. It is an extraordinarily manual process.
2. At the end of the day you’re left with a static document.

Let’s take each of these in turn and discuss the real life implications.

Anyone who has drafted or edited a lease the old fashioned way knows how manual it is.  Blank spaces need to be filled in.  Identical information needs to be entered multiple times.  Relevant language needs to be located in prior deals or language libraries, or even drafted from scratch.  The list goes on and on.  And the more manual a process is, the more wasted time there is and the harder it is to ensure consistency.

Wasted time results in slower document turnaround times and inflated costs.  Speed is vital in leasing.  Slower document turnaround times lead to unhappy tenants, increased risk of deals going sideways and is even part of the reason leases take so long to close.  Inflated costs lead to real estate companies having to pay for unproductive time and losing an opportunity to reallocate saved time to other time sensitive matters.

Lack of consistency across a portfolio results in increased risk and decreased control.  Increased risk comes from the fact that language inadvertently inserted or not deleted in a lease can have real financial and portfolio management consequences.  Decreased control comes from simply not having certainty that every time a lease is completed it includes the correct language that leads to desirable and predictable business outcomes.

While leases are completed once signed, the information contained in leases is accessed and relied upon long after that.  With the old fashioned tools being used today, leases are static documents.  This means that the only way to access the information in leases is through manual review and the only way to get the information into other software systems is by re-keying it multiple times.  The result: wasted time re-keying information and reduced quality of the information that real estate companies rely on to manage their portfolio.

Fortunately, real estate companies aren’t stuck with the old fashioned tools anymore.  Lease automation software exists and anyone interested in moving their legal leasing process into the 21st century should check out LeasePilot (www.leasepilot.co) – a document automation platform designed specifically to streamline commercial leasing.

Boston, MA, February 22, 2017 – LeasePilot®, a document automation platform specifically designed to streamline retail, office and industrial leasing, announces that it has partnered with MRI Software, a global leader in real estate software solutions. LeasePilot combines proprietary technology and deep legal expertise to help real estate companies close leases faster, reduce transaction costs and risk, and increase visibility regardless of whether leases are completed in-house or by outside law firms. LeasePilot uses a real estate company’s own lease forms and preferred language options so every lease is tailor-made for the organization, assets and tenants.

“We are delighted that LeasePilot has joined the MRI Partner Connect program,” said John Ensign, Executive Vice President and General Counsel at MRI Software. “The automated leasing capabilities offered by LeasePilot are well-aligned with MRI’s mission to give our clients access to industry-leading technology and services through an open and connected partner ecosystem.”

Jon Eskow, Co-founder and COO of LeasePilot, said, “Our partnership with MRI enhances our technology platform and market reach. With a LeasePilot/MRI integration, our customers will be able to see their lease data instantaneously in their accounting and property management systems without the need to prepare lease abstracts or re-key lease information into MRI. This will save both time and money while
eliminating costly errors.”

As a pioneer of the real estate software industry, MRI gives its clients the flexibility to choose the solutions that work best for their unique business. With the addition of LeasePilot to the Partner Connect program, MRI commercial real estate clients can better manage the property lifecycle through an automated leasing process that can improve collaboration, minimize risk, and reduce costs.

About MRI Software

MRI Software is a leading provider of innovative real estate software applications and hosted solutions. MRI’s comprehensive and flexible technology platform coupled with an open and connected ecosystem meets the unique needs of real estate businesses—from property-level management and accounting to investment modeling and analytics for the global commercial and residential markets. A pioneer of the real estate software industry, MRI develops lasting client relationships based on nearly five decades of expertise and insight. Through leading solutions and a rich partner ecosystem, MRI liberates real estate companies to elevate their business and gain a competitive edge.

About LeasePilot

LeasePilot was founded in 2015 by Gabriel Safar and Jonathan Eskow, two experienced commercial real estate attorneys, who recognized that by injecting technology into the leasing process, the real estate industry would be able to close deals faster, reduce costs and manage risks. LeasePilot combines document automation, word processing and user-centric interfaces into a single web-based platform expressly designed to radically accelerate the entire process of drafting and editing commercial leases, from a letter of intent through lease execution.

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