Skip to content
May 10, 2024

The Silver Bullet to Faster Leasing: How Prophia Predicts Future Approvals

If current market challenges are slowing your leasing momentum or you are struggling with internal data management, Prophia can help your team get back on track.

Accelerating Leasing

Improving your organization's speed-to-leasing is challenging in favorable economic conditions, but that feat becomes even more difficult when access to capital is scarce and investors are playing it close to the vest.

With supply and demand challenges hindering occupancy rates in asset classes like the office sector and TI allowances increasing in retail, the leasing landscape is a veritable obstacle course. However, there are solutions available that can incrementally improve the leasing outlook for many owners and fundamentally change speed and efficacy throughout the industry.

Jump To A Section in This Article
Common Challenges When Signing New Leases
How Prophia Accelerates Leasing
Redefining Leasing Processes With AI

4 Challenges CRE Orgs Encounter When Signing New Tenants

Many factors impact speed-to-leasing. Some are internal and process-related. Other factors are more external, the results of economic and market conditions. There are actionable ways to navigate around these challenges, however, the first step is identifying the obstacle—or obstacles—getting in the way of your leasing activity.

Supply and Demand.

When vacancies are high and the tenant pool is small, it can be difficult to find, and sign, new tenants. When tenants have an abundance of options, they can shop around for the best contract or hold property owners’ feet to the fire until they land on generous terms.

This supply and demand dynamic is currently happening in CRE submarkets like healthcare real estate and office, placing increased pressure on property owners to turn around new contracts quickly and lock in new tenants.

However, maintaining this cadence puts a strain on resources, especially if the property owner’s team uses dated methods to track and organize portfolio data. Certain lease terms may also get left on the table to get a signature down on paper as soon as possible. These terms might benefit the tenant, but they can devalue the property.

TI Allowances and Concessions.

Tenants are asking for more allocations and allowances than ever before. Why? Because competition to sign new tenants is heating up among property owners and post-COVID commercial vacancies have officially overstayed their welcome.

As a result, property owners are offering tenants concessions like diminished rent, space improvements, and longer free rent periods to entice tenants in a market overflowing with supply.

These market conditions are creating a leasing double-edged sword. Organizations that are not granting TIAs at the rate of competitors in the market are missing out on leasing opportunities. Conversely, those being too generous with concessions and allowances could disrupt their property’s cash flow.

Data Gaps and Data Silos.

External factors aren’t always the reason leasing teams struggle to sign new tenants. Data management can also affect leasing. Old-school CRE teams managing portfolio data in individualized spreadsheets, scattered Word docs, or by hand, struggle to communicate certain details or miss important tenant details altogether.

For instance, if your team is filling a vacancy in a multi-tenant property with medical businesses, your existing tenants, most likely, have detailed exclusive use clauses. If you manage all of your tenant data by hand or in spreadsheets, you could unknowingly sign a tenant with a business model that violates an existing tenant’s exclusive use stipulation resulting in fees, concessions, or a damaged relationship.

Sluggish Internal Processes.

Data management woes can also lead to completing internal tasks more slowly, such as lease abstraction, creating reports, running reconciliation tasks, and drafting new lease summaries. But why?

If you manage multiple multi-tenant properties, your team’s portfolio likely contains hundreds, if not thousands, of physical pages of contractual data. Creating a lease abstract and sifting through that data manually, or, with tech tools that don’t communicate with each other, can require multiple hours for data verification alone.

The result? Tasks like lease abstraction, which could take minutes, take hours, and more complex tasks take days, ultimately slowing your organization’s speed of business.

How Prophia Accelerates Leasing

With so many challenges happening in the market, it can seem property owners have everything going against them when signing financially viable tenants and filling vacancies in their buildings. However, there are steps ownership groups can take to find the right tenants for their properties and capitalize on leasing.

1. Understanding Existing Approvals.

Prophia gives CRE teams the gift of hindsight by making it simple to access previously approved contracts throughout their entire portfolio. How? It really is quite simple. Prophia embeds every document with a searchable data layer once it scans, annotates, and ingests your critical lease data. This advanced search function allows users to search across their entire portfolio to uncover commonalities in lease language.

For example, finding the maximum TI amount throughout your portfolio. Your team can search in Prophia and automatically see that the maximum amount you’ve given to tenants in the past is  $25/sq ft. There’s no need to reinvent the wheel every time you’re preparing to sign a new tenant. Your portfolio is a gold mine of information and it should be used to maximize your leasing capabilities.

2. Cutting Down on Back-and-Forth.

When a new amendment or lease is uploaded to the platform, Prophia’s AI synthesizes and databases that information in an accessible app with unlimited user licenses. Why is this important? Having your historical data in one accessible location online makes it simple to get everyone on your team on the same page and keep negotiations moving forward.

Data accessibility also cuts down on any back-and-forth when working with a third-party. Think about an attorney team. If you are trying to sign a new tenant, the last thing you want is for negotiations to slow once you involve individuals outside your organization.

With everyone working from the same information in Prophia, there are no misconceptions, and time previously wasted trying to open access to contractors or external teams is spent on more important tasks that can push leasing forward.

3. Expediting Data Verification.

Questions will inevitably come up when signing a new tenant. However, that should never stop the leasing process dead in its tracks. With Prophia’s generative AI, leasing teams can feed questions about their portfolio data into the system and get an immediate, clear and accurate response.

Instead of digging through a shared file that may or may not contain the document you’re searching for, you can prompt Prophia, and our system will search for you. Let’s say, for instance, your property has limited parking spots available and you’re preparing to sign a tenant that requires its tenants to be able to park on site. You can prompt Prophia’s AI to uncover all of the details surrounding parking rights for that specific property.

The same goes for stipulations outlining signage thresholds and availability, base rent, and anything else that might come up throughout a leasing negotiation. This ability to expedite the verification process keeps progress from getting interrupted unnecessarily and safeguards property owners against certain risks when signing a new tenant.

Redefining the CRE Leasing Landscape

The market today is challenging, but there are advanced tech solutions in the market that can help. If your team is unfamiliar with the benefits of AI, you can follow our comprehensive checklist for building an adoption strategy and familiarizing yourself with AI fundamentals.

With this knowledge about AI, and the multifaceted benefits of Prophia, you and your team can transform processes related to leasing, property management, asset management, and more.

There are unprecedented times in CRE and your organization’s business operations need a technology-backed solution that can help you increase property value and right the supply and demand challenges happening in major markets throughout CRE. Take a step towards faster, smarter leasing today and send our expert team a request for a free demo.

 

If you would like to harness the power of next-generation AI and overcome some of today's most daunting market challenges, contact the Prophia team to learn about platform adoption for CRE.

Hannah Overhiser

Hannah is Prophia's Content Marketing Manager and a seasoned B2B and B2C marketer. Her career began in eCommerce consulting with a focus on code testing. This technical expertise transferred seamlessly to SEO and she started working agency-side as an SEO and Content Strategist. Today, her home is Prophia, and she puts...

Other posts you might be interested in

View All Posts