LEASE ADMINISTRATION CASE STUDY 2

Centralizing Lease Administration Tasks While Utilizing Client Software Nets $390,000 In Savings

Client
Top Five National University with five underlying schools and seven hospital divisions occupying and co-sharing 200 leased or owned locations.

Initial State of Lease Administration
The client did not have a centralized lease administration function. Multiple administrative assistants throughout the University's various schools were keeping track of the leased portfolio utilizing an excel spreadsheet. They were tracking critical dates through the excel spreadsheet as well. The University was not leveraging its lease transactions and negotiations since the entire portfolio size was not known.

Resolution
Prior to hiring MBG Consulting, the client had opted to buy and use a lease administration software package and had committed all financial resources to it. MBG offered the flexibility of using the client’s software selection instead of applying a preexisting or “fits all sizes” software solution. All leases were abstracted and the database reflected the client’s unique internal structure, which allowed reporting by School, geographic location, unique internal identifier, cost center, fund resource, etc. Rent payments were centralized, which allowing improved reporting and enhanced portfolio management.

Evolving Relationship
MBG Consulting and the client expanded gradually the relationship to include lease audits, property tax and insurance premiums review and contest, and the production of extremely specialized executive management reporting (detailed 10K, capital assets, depreciation, etc.). We implemented a comprehensive lease audit process and became part of each new lease negotiation by providing detailed language on Operating Expense lease clauses. The rental payment process evolved from MBG submitting rental reports to the client and the client cutting the physical checks to our current process whereby MBG cuts the physical checks or utilizes Electronic Funds Transfers (EFT) to pay all rental liabilities to the landlords.

Savings
MBG Consulting has saved the client $390,000 to date by recovering funds from incorrect or duplicate payments, as well as from correcting annual pass through of Operating Expenses. The value we have delivered is further measured by streamlined processes and procedures that eliminate errors, enhance the predictability of reporting, and allow for proactive management of real estate assets. Our flexibility allowed us to use the client’s lease administration software and formulate an elegant approach to achieve maximum lease administration efficiency with already-existing technology, a great benefit to the client.