SAP Real Estate Management rapid-deployment solution

Real estate lifecycle management has been playing an increasingly important

role over the past years. This should be no surprise considering that, in most
companies; real estate represents their balance sheets largest financial asset
and is one of their highest operating costs. With this in mind, optimized real
estate lifecycle management can have a significant impact on the bottom
line.
With the SAP Real Estate Management rapid-deployment solution, you can
quickly and affordably implement and automate real estate-related business
processes, letting you manage the entire real estate lifecycle in a strategic
way that optimizes returns for your business. The solution provides support
for end-to-end construction and investment management, lease and space
management, and maintenance and repair. You can develop, construct,
operate, and deploy property and make costs more visible and controllable,
so you can successfully face challenges from compliance, sustainability, and
competitive pressure.
Business scope

Benefits
-

Achieve operational excellence and greater scalability by automated

process integration, providing a consistent view of your business
Centralize sources to automate complete portfolio insight and support
legal compliance.
Minimize costs and risks through comprehensive monitoring of real
estate processes and operations expenditures
Gain visibility, increase process standardization and integration, and
automate collaboration with service providers operate more effectively
and boost your portfolios profitability.

A. Investment and construction management

Analyze your portfolio, track investment decisions, bid out and award
construction services, monitor projects and contractors, and manage cash for
adequate funding.
1. Investment Planning
- In investment management, the tasks of the asset manager include
capturing and analyzing all investment alternatives and their relevant
details, reviewing proposals and initiating projects, and performing
investment planning across the entire portfolio.
2. Construction Project
- In construction project management, the asset manager is responsible
for keeping construction projects on track, monitoring project budgets,
controlling service fulfillment of contractors and monitoring payments
and warranty related to construction contracts.
3. Property Acquisition
- After the investment planning, budgeting, and approval of an
appropriation request by the asset manager, a property acquisition
contract is closed. The agreed purchase price is the basis for posting to
accounts payable and posting to the related controlling object.
Furthermore, after a fixed asset has been created, the defined
purchase price is capitalized in asset accounting.
4. Property Disposal
- After the investment planning, budgeting, and approval of the related
appropriation request, a property disposal contract is closed. The
agreed selling price is the basis for posting the accounts receivables
and posting to the related controlling object. Furthermore, the defined
selling price needs to be written off in asset accounting

B. Lease and space management

Standardize and automate recurring lease administration activities, such as
rent escalation, renewals, and periodic postings to save time and effort and
free up capacity for more strategic tasks. Accelerate leasing processes and
elevate occupancy and tenant retention rates and their associated revenues.
1. Master Data Management
The real estate manager maintains master data for all objects in the real
estate portfolio. Master data objects include business entity, building, and
land and rental objects. Business partners, such as tenant, landlord and
service provider, are also created.

2. Service Contract
The real estate manager makes an agreement with service providers and
energy suppliers regarding the provision of services and energy required to
run his or her properties. This includes caretaking and security services,
electricity provision, and waste removal.

3. Lease-In
The real estate manager agrees on an expense lease for the usage of a
building, land, store, office, or an apartment with a landlord. The contract
details are maintained in the contract.

4. Lease-Out
The real estate manager agrees on income leases for the use of a building,
land, store, office, or apartment with tenants. The contract details are
maintained in the contract.

5. Lease-Out - Free Adjustment

The real estate manager agrees on clauses for free rent adjustment in the
lease with the tenant or the landlord. Free adjustment allows for an automatic
increase of rental conditions based on a fixed amount or a percentage
increase at specific intervals.

6. Lease-Out - Index Adjustment

The real estate manager agrees on clauses for index rent adjustment in the
lease with the tenant or the landlord. Index adjustment clauses allow for an
automatic increase or decrease of rental conditions based on changed index
levels.

7. Lease-Out - Sales-Based Rent

The real estate manager agrees on clauses for sales-based rent in the lease
for retail space with the tenant or the landlord. Sales-based rent clauses allow
a consistent definition of sales-based rents as a percentage of retail turnover
or price per sold unit, including grading, advance payments, and minimum
and maximum rents.

8. Accounting
The lease accountant creates postings based on the rental fees maintained in
the lease on a regular basis. Accounts payable creates open items on vendor
accounts for landlords. Account receivable creates open items on tenant
accounts, clears open items, executes dunning, and creates installments.

9. Reminder Dates
The real estate manager maintains reminder dates for real estate objects or a
lease in order to monitor critical dates. Critical dates include reviewing rent
adjustments, checking for dunning and payment blocks as well as reminders
for inspections.
10.Lease-Out - Renewal
The real estate manager agrees on renewal clauses to a lease with a fixed
end date with the tenant or the landlord.
11.Notice
The real estate manager can specify multiple notice rules with contract terms
that lay down different periods of notice for the contractors (tenant and
landlord). Notice can be given for the entire lease contract or for individual
rental objects assigned to the lease contract.

12.Overall - Controlling
The controlling business process covers the planning of costs and revenues at
cost element level for real estate objects in your portfolio, for the respective
periods in a fiscal year.

13.Overall - Reporting
Reporting provides the real estate manager with essential information on real
estate objects and contracts. These reports provide an overview of master
data objects and contracts, values derived from the cost and revenue
postings, as well as planned values.

Business Terms and Process Flow

A lease is a contractually binding agreement between two or more parties. In
real estate, this contract is usually between a landlord, or property owner,
and a tenant, person who rents the property. The lessee (tenant) agrees to
pay the lessor (landlord) for use of a tangible asset (apartment, or property)
for an amount of time agreed upon in the lease terms.
Common Examples of Tangible Property That Can be leased in Real Estate:
Commercial Lease
Landlord Notice
Rental Lease
Landlords Rights
Landlord Forms
Residential (apartment or home)
Commercial (retail or office)
Industrial (warehouse)
Land
Advertising Space (bulletin board)
Space on a roof or property (for cell phone towers)

Common Examples of Tenants:

Individual looking to live in residential rental space
A retail store looking for space to operate their business
An office (doctor/business) looking for a space for their practice
Another landlord leasing land to use as parking space for his tenants
A company leasing advertising space on a building
A company leasing land to put up a cell phone tower

What Is the Purpose of a Lease?

A lease is meant to protect both the lessor and the lessee. It defines the
length of the agreement, as well as the terms and conditions that both
parties must abide by. If the lessor or the lessee breaks the terms of the
lease, the lease is no longer binding and the offending party may be subject
to legal action and financial penalty for breach of contract.

What Is the Difference Between a Lease and a Rental Agreement?

The two terms have been used interchangeably over the years, but they are
not actually the same thing.
A lease is an agreement over a set term. A common lease term is for one
year. Some may be as short as six months, others as long as five years.
Unless both parties agree to alter the contract, the terms of the lease cannot
be changed until the lease expires. In addition, when a lease expires, the
lease does not automatically renew. After expiration, the lease term will
either become month to month, or you will have to get the tenant to sign a
new lease.
A rental agreement is a much shorter contract. It is typically a 30 day
agreement. A rental agreement automatically renews at the end of the term
unless either party cancels the contract in writing. The terms of the rental
agreement may be altered by either party by providing written notice of the
change. In many states, this notice must be given 30 days before any change
will be made.