5 Tips for Commercial Lease Abstraction

  • February 21, 2018
  • admin@ohi

An original Commercial lease is a legal document covering all the financial and non-financial details of a business or a property. And since it is a legal document and used for several purposes. Therefore, commercial leases have to capture every possible detail. They tend to get too long with boring and lifeless legalese, but each of those clauses is important.

However, the company’s senior management can’t spend too much time reading/scrutinizing them. Hence, good lease abstract management is required which makes it short and concise for seniors to go through it.

This is a classic example of the gap between what the users need and what they have. To efficiently read and quickly process commercial leases, you can create a “lease abstract”. It is a shortened form of the agreement that summarizes all important points for a quick read. It is an extremely important document and must be created for all businesses and properties.

Lease abstraction is a bit difficult for some specific sectors but there are a lot of commercial lease abstraction services available that assist you. Commercial real estate lease abstraction is a cumbersome task and requires a lot of effort, so it’s better to outsource the responsibility to expert professionals.

Your Game Plan for Creating a Commercial Lease Abstract

Modern real estate firms extract key business facts from the leases and insert it into the real estate software.

Abstracts of the lease complement the software; they must be done right because the software depends on the accuracy and accessibility of data in them. They are also your backup in case the software malfunctions or goes offline.

Let experts take care of the Lease Abstraction Process

Your in-house team may know the lease inside-out, but abstracting the lease cannot (and should not) be done in one’s spare time. It needs to be done by dedicated professionals, or else you risk compromising the integrity of crucial data in the abstract.

Professional lease abstraction services also provide an “abstraction insurance”, designed to protect you in the event of errors or missed data points. Lease abstraction is a highly sensitive task and requires professionalism. That’s why it is not suggested to get it done by any random person.

Find a format that you like

When you read a book or a magazine, one of the initial pages is a table of contents. At the end, we have an index and a glossary. Each chapter in the book has relevant sections.

Your structure for the abstract doesn’t need to follow a book, but it needs to capture important details that matter to you. Some of the important sections of a corporate lease abstract include:

  • Operating costs
  • Periodic repairs
  • Lease term
  • Renewal options
  • Expansion rights
  • Security deposit

Find a perfect balance for the length of your abstracts

Obviously, your abstracts need to be shorter than the original lease. But how short is too short? Typically, abstracts of commercial leases don’t tend to be longer than 3 to 5 pages.

If it goes too long, there would be no discernable difference between the lease and the abstract. And it might become tedious for external users.

Make your commercial lease abstract read fast

Feel free to use font styling variations to highlight important numbers and facts in your abstract. Other techniques to make the abstract fast and readable are:

  • Tables
  • Bullet points
  • Simple flowcharts (not too many shapes)

Link the abstract to your lease

You may also add a link to the lease in your abstract. To do so, you will mention the reference inside the abstract pointing to its original location in the lease. This helps you quickly dig more information directly from the lease.

This will also make the content more authentic and concrete.

In conclusion

Abstracts in the commercial real estate industry are designed to be a quick reference to the multi-page lease agreements. They must neither be too short nor too long. Different content elements like tables, lists, and font styling can be used to highlight important numbers and facts. The lease format should be examined and validated for usability within the company before it is used.

Lastly, lease abstracts need to be crafted very carefully. You should consider outsourcing the process of commercial lease abstraction.

As outsource lease abstraction is an easier way to obtain the desired and apt leases. Due to specialization and vast experience, the service provider will be able to help you prepare more relevant lease abstractions.


OHI is a thirteen-year-old real estate services company working with 50+ commercial and residential real estate developers, funds and property management companies across USA. Our deep expertise in real estate accounting, financial analysis, lease administration and asset management has helped clients cut associated costs by 40-50%. We currently provide these services to a portfolio of 75000 units across clients.

Commercial lease abstract service is what we are specialized in. We invite you to experience leasing and accounting outsourcing through us.

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