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Global Lease Administration Results in 87% ROI.

Global Lease Administration Results in 87% ROI

Global portfolio, Lease Administration, Lease Auditing
Client: Fortune 500 manufacturer of paints, coatings, and specialty chemicals

Overview:
After a major acquisition and branding realignment in 2008, the client outlined an ambitious strategic vision to for accelerated, sustainable growth. Amplifying the performance of their lease portfolio was a key component of this initiative, so the client sought out the expertise of a premier lease administration authority to support their efforts in this arena.

Scope of Work:
In late 2010, the client engaged MBG Consulting to serve as their exclusive lease administration provider; as such, we were charged with centralizing lease data and functions across their global portfolio while implementing premium processes and procedures that directly benefit the client’s bottom line. Historically, the client’s business units had managed the real estate function individually with no formal centralized management effort. This approach lacked strategy, advanced planning, coordination of shared services, standardized processes, and alignment with corporate objectives. The primary objectives of our program included centralized real estate data, robust abstracting, centralized scrutiny of rental liabilities, development of potent reporting outputs, process review and enhancement, facility management support, and comprehensive lease auditing.

Key features of our work:

  • Aggregation of global real estate data in a centralized database
  • Abstraction of all national and international lease contracts
  • Centralization of all real estate related rental liabilities and rent payments
  • Enhanced executive management reporting
  • Process review and re-engineering
  • Support for integrated facility management processes
  • Comprehensive lease audit program implementation
  • Subtenant lease administration
  • Termination process enhancements and lease language consulting

Results:
Since going live in the summer of 2011, our efforts have resulted in savings and cost avoidance of $350,000; we have also identified and are in the process of realizing an additional $2.2 million in potential savings. To date, the client has seen a total return on investment of 87%. Our efforts have realized substantial qualitative results as well: our integrated, forward-thinking approach is on tap to be expanded into other components of the real estate and facilities domain. This will allow the client to focus on strategic issues and employ decision-support principles based on the data and metrics our approach can generate.


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