How Will Outsourcing Lease Administration Reduce the Cost for Real Estate Firms?

13 March 2023

Lease administration can be an overwhelming and time-consuming task for real estate firms. With numerous properties to manage, staying on top of all the paperwork, contracts, and other documentation associated with leases can be challenging. Fortunately, outsourcing lease administration services can provide a cost-effective solution that helps reduce costs while still ensuring compliance with laws and regulations. This blog post will discuss how outsourcing lease administration services can help real estate firms save money without sacrificing quality or service. We’ll also look at some key considerations when choosing an outsourced Lease Administration provider so you can make sure your firm gets the best possible service for its needs.

Why is it important to have a lease administration partner?

By bringing in a partner who can provide end-to-end lease services while also optimizing the time, cost, and effort spent on these tasks, you’ll give your employees the ability to retrain focus on achieving operational excellence. Lease administrators work closely with the property management team and serve as a critical coordinator to the operating and accounting teams to perform specialized tasks that are niche to property administration. Their expertise and integrated approach enable accelerated processing of numerous tasks, resulting in cost optimization and increased revenues.

Advantages of outsourcing lease administration

Centralizing leasing data using real estate administration software is a key foundational step to identifying cost-saving opportunities in sublease collections, security deposit recovery, and critical data management. Outsourcing lease administration is effective for many reasons. Some of the significant advantages are mentioned below:


Corporate real estate teams are looking to become thinner, more agile, and more strategic. With the right external partner, a company can upskill its internal team and rely on its outsourced partner for day-to-day operations. This partner is not just working on a tactical level, but jointly taking a strategic command of the execution. The increased productivity, pricing leverage, and access to resources that a partner is able to bring can make the company’s portfolio more effective and its performance more predictable.

World-Class Expertise

Companies recognize that they will achieve better results by focusing on core competencies and bringing in strong strategic partners to provide services non-core to their business. This trend was observed during the IT outsourcing revolution, where internal IT employees moved to new specialized employers, providing them with better training, expert supervision, and brighter career opportunities. At the same time, companies got leaner direct payroll and more expert and cost-effective IT support. We are seeing this model come to life in the corporate real estate industry very sophisticatedly.

Compliance and Risk Management

In today’s world, where businesses continue to evolve in terms of models and structures, the compliance environment is also trying to keep pace. As a result, changes are seen in both regulatory and contractual compliance requirements across the globe. In addition, the broad diversity and complexity of regulations across geographies make it a real challenge for multinational organizations.

Real estate management software can also provide other critical insights related to workplace productivity, capital asset planning, and sustainability. The way data is captured and reported to visualize occupancy utilization, service requests, equipment faults, and actual energy consumption plays a primary role in effective decision-making and business performance. Multinational companies prefer to bring in a partner because these elements are increasingly essential in global markets. The need to better manage costs and remain competitive globally means that companies have become more concerned about the productivity of their real estate portfolio, the productivity of their workplace, and people.

Managing these complex and time-consuming lease administration tasks in-house can be expensive, including the time and cost needed to source and train the staff. Also, it may not guarantee timeliness and accuracy despite the investment and training. On the other hand, outsourcing lease abstraction projects to professionals allows businesses to share the workload and extend their in-house lease administration capabilities without facing the challenge of recruitment and training and creating process controls.

In addition, it offers flexibility and scalability, all at a much more viable and cheaper cost. Applying Best Practices from Accounts Payable to Real Estate Invoices helps detect and handle billing and invoicing discrepancies. Numerous case studies have shown that periodic reviews of rent charges against contract terms can yield one-half to one full basis point savings. Thus, companies can achieve significant cost reductions of 2-4% of total real estate portfolio spending, or even more, through lease administration software and centralizing real estate functions.

If your business struggles to control operating costs related to leasing administration and faces increased lead times to finalize reports and make critical decisions, outsourcing the leasing activities will help you resolve these impediments and optimize the cost of doing business.

Partnering with the right firm

There are a lot of firms waiting to manage your leases for you. But who you choose to take care of your lease administration matters a lot. Looking for companies with the experience and expertise to handle lease administration of various properties at a large scale is always advisable.

With over 20 years of experience in lease management for real estate businesses, PreludeSys is dedicated to providing value-added services that optimize lease portfolio management, streamline processes, perform lease audits, and ensure compliance. Our asset-level reporting for leases offers unparalleled insights into your business operations, empowering you to make informed decisions. Trust us to add value to your business through our comprehensive lease management solutions. To know more about our leasing services, talk to our experts today!

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