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:
- tenants only make a minimal investment in the deal until the lease gets signed up,
- there is often intense competition for tenants fed by tenant brokers, and
- 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.