Lease abstraction is the process of converting lease data from PDF or paper, into a more analysis-friendly format – as desired by a client.
The analysis friendly target format can be Excel or a database structure.
Lease abstraction interventions
- Extraction of data from one format (PDF) into another (Excel)
- Transformation of data – explained in more detail:
- Business rules can be applied that make the information in the target format more decision-relevant (such as changing all fields with value A, B and C, to value Y)
- Cleaning of data: standardising of values, lease renewal terms, correction of street addresses
- Enrichment of data: adding of tenant industry classifications, assignment of co-ordinates to property locations, addition of company unique identifiers
- Loading of data into a client-specified end environment
A lease abstract provides a condensed version of the original lease document, and is ideal for portfolio analysis, due diligence or valuation exercises.
Phases in a lease abstraction project
(Certain projects may require only one of the steps below)
- Project setup – confirm requirements, document business rules, map data fields, formalise outputs
- Data processing – actual abstraction and queries (if required)
- Final data migration – loading of data into target environment
- Reporting – communication of project wins, root cause solutions, and proposed next steps (if required)
What data is abstracted?
- Lease financial information: space occupied by type, rentals paid, rent review / escalation terms, expenses payable, turnover clauses, tenant installation allowances etc.
- Lease general information: lease type, lessor entity, lessee industry classification, contact parties, deposits, guarantees, suretyships etc.
- Property specific data: property names, addresses, location data etc.
- Time-relevant lease events: lease expiry dates, lease renewal deadlines etc.
- Onerous clauses (risks / liabilities) for the occupier: reinstatement clauses, dilapidation clauses, maintenance obligations, redevelopment clauses etc.
- Onerous clauses (risks / liabilities) for the landlord: business continuity obligations / compensation, termination clauses, pre-emptive purchase rights etc.