Note: this article refers to Least; now Kato
So, looking forward towards a market where occupiers have more choice than ever before, we know property owners will be considering what can be done to reduce the average 14 week leasing process. Afterall, there are plenty of other activities you could do in the same timeframe…*
At Least, we speak to the real estate market daily. As property professionals, we’ve built a platform for landlords and agents to reduce void periods and improve the leasing experience for occupiers. Here’s what we have learned about the current leasing process.
Often building owners have no central source of truth, a place where all documentation is stored and where all stakeholders have access. From lease plans, service charge accounts to insurance information; the data pack is crucial to drive a transaction forward. Lawyers need this detail to get the legal process moving and often won’t start drafting until there is adequate and accurate information. This lack of control means documents can easily get lost in a sea of noise ultimately slowing down the deal…
On the other side of the table is the occupier and their team. Unless represented, they usually lack a comprehensive knowledge of the leasing process, not knowing what information to provide or how to make decisions in a timely manner. . Ultimately, occupiers are not property professionals and just want to be able to seamlessly and quickly navigate the process with minimal distraction away from their core business.
Lawyers like detail. The more detail you provide them from the outset the quicker they can turn around a lease. However there is constant tension between landlords wanting to speed up the process and make it easier for tenants to navigate and the detail that lawyers might require. Above all the commercial terms need to be clear and increasingly we see landlords and agents are not finding Word documents fit for purpose. Mistakes are easily made from cutting, copying and pasting when drafting. Negotiations play out using Track Changes which runs the risk of more errors and - who likes a sea of red pen anyway?
Another issue stemming from outdated technology is poor communication between the stakeholders of a transaction. The main tool of choice is good old-fashioned email. Filing emails internally while juggling deals is a laborious task and can result in missed correspondence and information lost in endless email chains. It also isn’t a task that sits top of the agenda of a commercially minded leasing manager, but a clear communication paper trail is important for transparency within an organisation. Wouldn’t it be great if this happened automatically?
There are other issues we hear about from commercial building owners but the above are just a few that combine to result in unnecessary delays. It is clear why it currently takes around 14 weeks to negotiate and close these deals, but we believe it can be quicker and a better experience for all involved! If you are interested in learning how other clients have used Least to reduce transaction voids by c.10 weeks please do get in touch. We would love to hear your thoughts and commercial leasing challenges.
* Current time to hike from London to Istanbul = 14 weeks.