The document outlines topics that were covered in a lease administration masterclass on benchmarking and reporting standards. The session overview lists topics like measuring occupancy costs, preparing tenancy schedules, tracking critical dates, portfolio performance analysis, and preparing for portfolio reviews. It then goes into further detail on some of these topics, such as how to measure occupancy costs, the importance of tracking critical dates, factors to consider for portfolio performance analysis and benchmarking, and upcoming changes to IFRS and FASB 13 reporting standards.

1. Benchmark & Reporting Standards
Presented by: Lee Trevena
Lease Administration Masterclass Friday, 23rd March 2012

2. Benchmark & Reporting Standards
Session Overview
• Measuring Occupancy Cost
• Preparing a Tenancy Schedule
• Tracking Critical Dates
• Portfolio Performance Analysis
• Portfolio Profiling & Benchmarking
• Preparing for Portfolio Reviews
• IFRS & FASB13 Reporting
• Budgeting and Forecasting
• Percentage Rent Tracking
Lease Administration Masterclass Friday, 23rd March 2012

3. Benchmark & Reporting Standards
Monetize Administration
• Need
The boss says so
Finance pay the money
Leasing guy asked for it
I want to keep my job
• Want
Have we got this information?
What do we know about the portfolio?
• Compete
Better information equals better outcomes
Lease Administration Masterclass Friday, 23rd March 2012

4. Benchmark & Reporting Standards
Measuring Occupancy Cost
• How do we measure it?
Annualised Per Annum Dollar ($APA)
APA / MAT
Annualised Per Metre Dollar ($APM)
Total Per Annum Dollar ($TPA)
TPA / MAT
Annual Variance(s)
Total Monthly Cost (cashflow)
IFRS – Straight Line
Lease Administration Masterclass Friday, 23rd March 2012

5. Benchmark & Reporting Standards
Measuring Occupancy Cost
• What does it represent?
The cost of being in that property – of course!
Actual or Effective
• What should it include?
Promo Levy?
Rental Credits & Rebates?
Percentage Rent?
Statutory Charges?
Lease Administration Masterclass Friday, 23rd March 2012

6. Benchmark & Reporting Standards
Measuring Occupancy Cost
• Why do we measure it?
True cost of occupancy
Track cash flow in the business
Affordability at renewal
Benchmark comparisons
To speak ‘Landlord’
Measure Property Performance
Rate Staff Performance
Lease Administration Masterclass Friday, 23rd March 2012

7. Benchmark & Reporting Standards
Measuring Occupancy Cost
YEARS 1 2 3 4 5 RENTAL
YR 5 $182,326
YR 4 $173,644
YR 3 $165,375
YR 2 $157,500
50%Rent
YR 1 Rent Free
Abatement $150,000
SALES $1,000,000 $1,070,000 $1,150,000 $1,100,000 $1,120,000
APA 15.0% 14.7% 14.4% 15.8% 16.3%
TPA 11.3% 14.7% 14.4% 13.2% 16.3%
VAR -25.0% 0.0% 0.0% -16.7% 0.0%
Lease Administration Masterclass Friday, 23rd March 2012

8. Benchmark & Reporting Standards
Preparing a Tenancy Schedule
• Spreadsheet or System?
• Simple Lease Abstract
• What do you include
Simple Example
Complex Example
• Do an Excel Course?
• Tenancy Schedule are so 80s!
Lease Administration Masterclass Friday, 23rd March 2012

9. Benchmark & Reporting Standards
Tracking Critical Dates
• Which Dates?
Lease Start/Expiry
Rent/Charge Adjustments
Option Exercise Dates
Accounting Periods
Insurance Renewals
Compliance Dates
Notification Dates
Clause Dates – Co-Tenancy, Rebate, Make Good
Lease Administration Masterclass Friday, 23rd March 2012

10. Benchmark & Reporting Standards
Tracking Critical Dates
• How do we set them up?
Excel – very quiet
Outlook – very private
System – proactive and collaborative
• How do you update them?
Manual or Automatic
• Key Tips
1. Don’t EVER track dates solo
2. Memories are not accurate
3. Read clauses carefully
Lease Administration Masterclass Friday, 23rd March 2012

11. Benchmark & Reporting Standards
Portfolio Performance Analysis
• Sales Productivity
Sales per unit of floorspace
How hard is our real estate working
• Occupancy Costs
Rent + whatever
Annual variances in variable charges
• Over-trades
Not maximising potential sales
Larger premises or additional site
• Under-trades
Operations alert
Tenancy too big
• Security of Income
Expiries & Holdovers
Renewal Program
Lease Administration Masterclass Friday, 23rd March 2012

12. Benchmark & Reporting Standards
Portfolio Performance Analysis
• Property Dept. Performance
Site Selection – Forecast Sales vs Actual Sales
Network Planning – Increased Sales & Disposals
Security – % of portfolio exposed
Deal Negotiation – Forecast Renewals vs Lease Deal
Lease Administration – Doc Execution
Lease Audit – Savings from Errors
Legal – Successful clause negotiations
Lease Administration Masterclass Friday, 23rd March 2012

13. Benchmark & Reporting Standards
Portfolio Profiling & Benchmarking
• Organic analysis – analyst?
• Business management
• Trend identification
• Decision support – role?
• Landlord negotiations
• Franchisee negotiations
• Compliance
• Business protection
Lease Administration Masterclass Friday, 23rd March 2012

14. Benchmark & Reporting Standards
Portfolio Profiling & Benchmarking
• Portfolio – define the group
Group of Stores – i.e. Westfield, CBD, Rural
• Profiling – choose your data
Store Size
Performance Metrics
Geography
Ownership
• Benchmarking – setting standards
What is a good number?
Are there applicable influences or responses?
IF, THEN ELSE
Getting business buy-in
Source of intelligence
Lease Administration Masterclass Friday, 23rd March 2012

15. Benchmark & Reporting Standards
Preparing for Portfolio Reviews
• Collect the information early
• Work with deal maker
• Current, trends & forecasts
• Benchmark Your Landlords
• Strategise Over-trades and Under-trades
• Make the information manageable
• Have a strategy
• Know your position
• Don’t blink
Lease Administration Masterclass Friday, 23rd March 2012

16. Benchmark & Reporting Standards
IFRS & FASB 13 Reporting
• NOW = Straight lining of Rent
Known Factors
Rent
Incentives
Some Reviews – not CPI
Not % Rent
Periodically Updated
Variance to AGAPP is key
Lease Administration Masterclass Friday, 23rd March 2012

17. Benchmark & Reporting Standards
IFRS & FASB 13 Reporting
• FUTURE = Capital Leases RENTAL
Liability Value
Asset Value REVIEWS
Amortisation TERM
Depreciation / Interest
Rate - WACC OPTIONS
Asset Adjusted Differently to Liability INTELLIGENCE
NPV is very complex
High degree of Assumption INCENTIVE
Periodically Updated MAKE GOOD
Lease Administration Masterclass Friday, 23rd March 2012

18. Benchmark & Reporting Standards
IFRS & FASB 13 Reporting
• Its coming quicker than you think
Likely 31st December 2015
Yr 1 Comparison – 1st Jan 2015
Yr 2 Comparison – 1st Jan 2014
18 months away!
Compare to Y2K timeframe
HUGE information request
Lease Administration Masterclass Friday, 23rd March 2012

19. Benchmark & Reporting Standards
FASB13
IS COMING
Lease Administration Masterclass Friday, 23rd March 2012

20. Benchmark & Reporting Standards
Budgeting & Forecasting
• What is a budget?
When and how long does it take?
• What is a forecast?
When and for how long does it take?
Accuracy
Multi-format (AGAPP, AIFRS)
Becoming more complex
Existing 12 month cash flow
Reviews Expiries and Expiries
Percentage Rent
Outgoings, Promos, Electricity
Lease Administration Masterclass Friday, 23rd March 2012

21. Benchmark & Reporting Standards
Percentage Rent Tracking
• Key part of Accruals Tracking
• Accounting Periods are critical
• How close to threshold are we?
• Is it a fix or scaled threshold?
• Once YTD sales are ready each month prepare
• Benchmarking
Lease Administration Masterclass Friday, 23rd March 2012

22. Benchmark & Reporting Standards
Thank you!
au.linkedin.com/in/leetrevena
leaglelee.com
http://www.facebook.com/leaseeagle
lee.trevena@leaseeagle.com
0407 711 622
Lease Administration Masterclass Friday, 23rd March 2012