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10 Ways to Optimize Your Lease Portfolio as a Lessee

The impact of the ASC 842 Lease Accounting Standard on the Hospitality Industry

As a lessee, optimizing your lease portfolio involves strategically managing your leases to maximize efficiency, reduce costs, and minimize risks. Here are some steps you can take to optimize your lease portfolio:



  1. Consolidate and centralize lease data: Start by gathering all your lease agreements and centralizing them in a lease management system or database. This will help you have a comprehensive view of your lease portfolio and facilitate easier analysis and decision-making.

  2. Perform a lease audit: Conduct a thorough audit of your lease agreements to ensure accuracy and identify any discrepancies or inconsistencies. Verify lease terms, payment schedules, renewal options, and other critical details. This step is crucial for understanding your existing obligations and opportunities.

  3. Analyze lease terms and conditions: Review the terms and conditions of each lease agreement to identify opportunities for optimization. Look for lease clauses that may provide flexibility, such as early termination options, subletting or assignment clauses, or expansion rights. Determine which leases are performing well and which ones may be underutilized or not aligned with your business needs.

  4. Optimize lease expirations and renewals: Create a lease expiration and renewal calendar to stay informed about upcoming lease expirations. Evaluate whether it is advantageous to renew, renegotiate, or terminate leases based on your business requirements and market conditions. By proactively managing lease renewals, you can negotiate better terms, including potential rent reductions or more favorable lease conditions.

  5. Consider lease restructuring or consolidation: If you have multiple lease agreements, evaluate opportunities for consolidation or restructuring. For example, if you have multiple smaller locations, it may be more cost-effective to consolidate into a larger space or negotiate a master lease agreement. This can help streamline operations, reduce administrative costs, and potentially negotiate better terms.

  6. Optimize occupancy and space utilization: Assess your space utilization and determine whether you are effectively utilizing your leased spaces. Explore options to optimize space usage, such as implementing flexible work arrangements, hot-desking, or shared spaces. By maximizing space utilization, you can potentially reduce your overall real estate footprint and associated costs.

  7. Monitor lease compliance and critical dates: Stay vigilant about lease compliance requirements and critical dates, such as rent escalations, insurance renewals, or maintenance obligations. Missing important deadlines can lead to penalties or other unfavorable consequences. Use lease management software or set up reminders to ensure you stay on top of these obligations.

  8. Negotiate favorable lease terms: When entering into new lease agreements, negotiate favorable terms that align with your business objectives. Consider factors such as rent escalations, lease term length, maintenance responsibilities, and expansion or contraction options. Engage in lease negotiations to secure the most favorable terms possible.

  9. Seek professional assistance if needed: If managing your lease portfolio becomes complex or overwhelming, consider working with lease consultants, real estate advisors, or lease management software providers. These professionals can provide valuable expertise, help you analyze lease data, identify optimization opportunities, and navigate complex lease negotiations.

Remember that lease optimization is an ongoing process. Regularly reassess your lease portfolio, monitor market conditions, and adapt your strategy accordingly. By actively managing your lease portfolio, you can improve operational efficiency, reduce costs, and mitigate risks associated with your leased assets.

You can take a video tour of iLeasePro or schedule some time on our online demo calendar to see how iLeasePro can help you and your firm with the overall lease management of your lease portfolio. For more information on increasing productivity and efficiency of your lease portfolio, check out our blog and our extensive lease accounting and lease management knowledge base.



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