How do you know whether your building is under- or over-rented? Usually by comparing your rental price levels with the market rent. But what if you have the right unit prices but under- or overstated surfaces in your lease contracts?
How do you reconcile rented space with LETTABLE measures specified in leases with re-measurements where the AS MEASURED numbers are increasingly diverging?
How do you make sure two buildings in your portfolio are comparable in size? Which measures types do you take into consideration?
How do accommodate a new tenant requesting to change the rented area surface in the lease contract without disrupting your GLA (gross lettable area) reporting?
A well-devised Space Management Strategy provides a clear and customized approach to keep track of rented and vacant unit surfaces, both in terms of their physical potential and how they are rented.
You need two views of your building:
Contracted AS RENTED view: important, because it's your obligation. But it can be distorted due to negotiations and wrong measurements in the past. AS RENTED can change across tenants and duringh lease negotiations.
AS MEASURED view: shows the true potential of your buildings, should only change if space is remeasured or physically changed (e.g. common area is converted to lettable space). This view should be your Single Source of Truth that can be used for portfolio-level aggregation and reporting.
What you gain by maintaining both views across your entire portfolio:
See true rentable potential of building
Track degree of under/over renting
Continuity in reporting by eliminating lease-related noise in your GLA total in time series-reporting
Flexibility in lease negotiations by accommodating tenant requests to adjust surfaces rather than pricing in lease contracts
Flexibility in re-measuring - remeasure at the best time, not at lease end
How can you efficiently implement the Space Management Strategy:
Define the goals and rules in your Space Management Strategy and obtain the buy-in from your asset management team.
Create the necessary Unit Measure Types in your asset management system. iREMS provides a structured framework to keep track of multiple parallel Unit Measure Types per unit and changes over time.
Document the known state to your buildings - add the Contracted measures to all rented units. Add the Measured measures to each unit that should be part of your GLA total. If you don’t have precise data from re-measurements, you can enter the Contracted same size for the time being and add a comment to the unit measure.
If and when your buildings get re-measured, enter the new MEASURED sizes with the appropriate start date. Like this the GLA for each unit becomes more and more accurate over time.
For each new lease with changed unit sizes, enter a new CONTRACTED unit measure starting from the lease start date, thus superseding the previous CONTRACTED measure. Like this you will always have an accurate and up-to-date picture of your over-/under-rented state.
Comments