Commercial real estate software goes beyond helping you manage your existing portfolio. Given the right combination of tools, it can also help to simplify and automate the due diligence process. Software brings two key benefits: easier management of documents and access to comparative information.
Document Management
Traditionally, due diligence for leasing has involved transferring large quantities of paper between landlord and tenant and their brokers, as well as attorneys and other deal team members. Commercial real estate software helps to not only reduce the amount of paper being sent around, but also take the information contained in those documents and make it more useful.
Software places all of the important documents you need in one place so you don't make haste of your due diligence.
Instead of building a traditional lease abstract, commercial real estate software lets you enter the data from the proposed lease right into your company's commercial real estate management system. While this data will be useful for comparative benchmarking, there are also nuts-and-bolts benefits to it:
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Tracking Changes: Once you get the first copy of the lease entered, you can quickly compare changes in red-lined versions to the lease data in your software, giving you a quick understanding of how the document is evolving.
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Depositing information in one place: Entering data and documents into your commercial real estate software or system means that your entire team can have access to the same version of the document at the same time.
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Projecting future requirements: By having data from the proposed lease computerized, you can see how it fits in with your other leases. This will show you when you need to be ready to orchestrate a move-in, budget for reconciliations, and manage options, renewals or rollovers to a new space. You can then compare those requirements with the dates on your existing leases to plan your staffing needs for the future.
Comparative Information
If you use the due diligence process to determine if a lease is appropriate on its own terms, you're only looking at half of the equation. The other part that needs consideration is whether or not a space fits into your larger overall portfolio. Your commercial real estate software holds the information that you need to be able to make those comparisons.
It is neccessary to compare leases to others in your portfolio and/or the rest of the market. Otherwise, how else can you tell you're getting the best deal possible?
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Portfolio benchmarks: Most commercial real estate software can generate a report showing how your portfolio performs on the basis of benchmarks like cost per square foot or employees per square foot. With those benchmarks and basic information about a proposed space, you can quickly see how it compares with the rest of your company's locations.
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Market benchmarks: Some commercial real estate software can also store market data. If you have this functionality, it can let you know what the going rate is for comparable space in the area. Having that data enables you to analyze the competitiveness of the offer that you're getting from your proposed landlord.
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Projected benchmarks: While it's hard to tell a space's utilization or sales per square foot before it's operational, your software may be able to plug in your data from your company's projections for the site and calculate how the space should perform relative to the results that it delivers.
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