Lease contracts in the commercial real estate (CRE) sector are some of the most complicated forms of legal paperwork. It takes an experienced industry expert with a keen eye for analytical skills to understand the verbose legalese used in these documents.

Lease abstracts are simplified, condensed reports that succinctly sum up the essential details of a CRE lease contract. These reports cater specifically to owners, investors, and property managers that need to analyze and compare important financial figures upfront and don’t have time to sift through a lengthy contract.

Lease Abstract Fundamentals

A well-formulated lease abstract is expected to contain certain pieces of important information regarding the property and the prospective tenant in a compact, easy-to-read manner.

• Location, address, & description of the property
• Tenant’s personal information
• Security deposit details
• Particular rent provisions (maintenance, taxes, etc.)
• Possible termination clauses
• Lease renewal options including start and expiration date

An accurate compilation of these details can help paint a complete picture regarding the essential elements embedded within a lease contract.

However, it is important to consider alternate factors which can severely affect the profitability of the property such as termination rights, tenant reimbursements, ground leases, etc.

Lease Abstracts Perks

There are numerous perks that lease abstracts offer to investors and property managers as opposed to commercial real estate lease contracts.

• Time saver – The condensed report saves time on the part of the owner who doesn’t have to spend time reading an entire lease contract for the analytical breakdown of key figures and details.

• Cost saver – Many unnecessary fees and charges can be avoided with a series of reminders logged into a database to track important dates and events.

• Risk management – The brief overview of crucial factors allows property managers to critically assess important details at a quick glance in order to mitigate excessive risk.

Value of a Lease Abstract

Each commercial real estate lease contract is a completely unique piece of paperwork  which requires plenty of experience and expertise in order to properly decipher and analyze the key points in the deal.

Any missed details in the lease contract can have severe ramifications regarding the viability and profitability of the location. A lease abstract is definitely a worthwhile investment for those involved in the real estate business.