We, at R.A.R.E.Sol, believe in providing the best Real Estate Business Management Services. We have developed a specialized expertise in offering comprehensive solutions worldwide to commercial, residential, retail and corporate real estates. With experienced staff and analysts, we provide a strong foundation for real estate organizations to build and strengthen their business objectives. Our solution offerings are fundamentally dedicated upon improving operational efficiencies while simultaneously driving bottom line benefits to Real Estate companies across the globe.
Our core services for Real Estate businesses are:
· Lease Abstraction: We often encounter complex and lengthy lease agreements and it is difficult to go through it entirely at once. We help you abstract such agreements in a way which is simple and lucid. Our experts ensure that the abstraction is done as per industry standards and requirements. Data accuracy and consistency are the areas where most companies struggle, resulting in lack of critical real-time information which ultimately hampers meaningful portfolio analysis and strategic decisions. We always strive to meet your expectations!
· Lease Administration: There are a variety of tasks which a lead administrator has to perform on daily basis. One has to ensure timely receipt of rents from facilities they own and needs to pay for the one’s that they lease, including some other activities too! The tasks performed by a lease administrator includes lease review and abstracting, accounting and processing, lease audits, CAM charges, lease renewal options, repairs and maintenance, information management and reporting, occupancy cost analysis, operating expenses review, and document storage and maintenance.
· Lease Finance & Accounting: The two most common types of leases in accounting are Operating and Financing (Capital Lease) leases. To understand the basic differentiation between the two, one must consider the risks and rewards associated with the ownership of the property/facility which is transferred to the lessee from the lessor. If they have been fully transferred, then it’s called financing lease under IFRS standards. Otherwise it remains to be operating lease, same as a landlord and renter contract. To determine whether it’s financing or operating becomes unclear at times and hence IFRS has outlined several criteria to make distinction between the two. At least one criteria must to be met in order to consider it as a financing lease:
• Title transfers at the end of the lease term
• The lessee has a purchase option that is reasonably certain to be exercised
• The lease term is greater than 75% of the useful life of the leased asset
• The Net Present Value (NPV) of the lease payments are greater than 90% of the fair value of the leased asset
• The leased asset is so specific to the lessee that the lessor has no ability to transfer the asset to another market participant
CAM reconciliation: CAM or Common Area Maintenance reconciliation is a must for Commercial Real Estate businesses. CAM is always calculated on the basis of previous year’s budget when it is created for the property. Usually the tenants are billed monthly for their share of budgeted expenses. The expenses might vary based on the type of lease – Net Lease or Gross Lease. Managing, Operating, Maintaining and repairing of the building are some of the recoverable expenses which falls under Estimates. HVAC, plumbing, management salaries, elevator, landscape management, lot sweeping, management fees, pest control, roof repairs, property insurance, FMR (fair market rent) for PMO (property management office), common area association fees, utilities, security, R&M salaries, postage are considered to be included in the estimates. These are calculated throughout the year. March and April are considered to be the time of the year when the actual expenses for the previous year are reconciled. Billing of prior year is reconciled against the tenant’s share of actual expenses. An invoice shall be sent to the tenant showing the amount owed or due. It should be noted that the actual expenses should only include recoverable expenses as mentioned in the Tenant’s lease. Expenses which the tenant shall not be billed for shall be excluded.