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C&W launches new lease projection system.

Vincent Tuminelli recognizes the power of information. As the Managing Director of Financial Systems and Client Support for Cushman & Wakefield, Inc. (C&W), he realized that armed with the right information, C&W's 750 brokers nationwide would be unstoppable. The right information proved to be a new software program designed to provide C&W's brokers and their prospective tenants with all the information needed to effectively analyze and compare various lease agreements.

Designed by at Margolin, Winer & Evens (MW&E), an accounting and business advisory firm, the C&W Tenant Lease Projection System is among the real estate industry's most advanced and comprehensive presentation packages.

According to Tuminelli, "We were seeking to enhance our capabilities in the financial presentation format. In addition, we wanted to incorporate expanded economic information, including variations in porter wage and CPI escalations. Furthermore, with the advent of more sophisticated software, we sought a more userfriendly package which would be another tool for our brokers to access when developing financial reports."

The company began working with MW&E's Director of the Systems Consulting Division, Ivan Bielik, CPA, in the Summer of '93. He based the C&W system on Lotus Development Corporation's standard program (Lotus 1-2-3, Release 4 for Windows), but locked in the computation methods to prevent inconsistencies or errors in broker calculations. To ensure the highest numerical integrity, the method of calculation was first audited by MW&E auditors prior to locking up the application. With a built-in standard calculation method, C&W brokers would only have to enter their lease terms.

The C&W Tenant Lease Projection System was designed as a turnkey presentation system which performs a detailed financial analysis of leasing expenses and costs from the tenant's perspective. Based on this analysis, the system generates an extensive collection of reports in various detail and summary formats, including color charts. These reports cover: cash flow analysis, cash flow per annum, total occupancy cost components, rental components per annum, expense escalations and pass-throughs, capital costs, etc. Each broker can select those reports most appropriate for a specific presentation. The final output is provided in a presentation ready brochure, with self-generated cover page, table of contents and dividers for sections which include: "Executive Summary," "Cash Flow," "Financial Highlights," and "Graphs."

Once the prototype for the C&W Tenant Lease Projection System was completed, it was sent out in book form to selected brokers nationwide for their review. Based on their feedback, minor changes were incorporated and then the revised system was distributed to the financial managers of C&W's seven hub offices for testing and review. They tested and paralleled the system with their own customized models to uncover any financial problems. Determining it to have a high degree of integrity, the system was redistributed in February of '94 for online use and review by the initial test group, representing a broad geographic cross-section. This application phase lasted approximately one month and culminated in a few cosmetic changes to the system's graphics. At the end of April, C&W was ready to roll-out the product formally to its 39 offices nationwide.

"Our new Tenant Lease Projection System has created a win-win situation all around," commented Tuminelli. "We have gained a consistently higher quality presentation offering more flexibility and requiring considerably less time. Our brokers can project out lease costs and then measure changes in real estate transactions instantaneously, punching up numbers on their computer screens as a negotiation progresses. The ability to report to a potential client in a timely fashion, and with comprehensive and accurate data, gives our brokers a decided edge in the marketplace. The clients, in turn, appreciate this value-added service, which frees them up to focus on their business' day-to-day operations and important strategic matters."

Also working to the advantage of both the brokers and prospective tenants is the system's unique ability to provide uniform, comparative analyses of different leases, in a side-by-side format, on one sheet. These comparisons can be for either different lease terms for a single space, or leases for alternative locations.

Comparative reports present a financial analysis of the various leases in detail and/or summary form, along with underlying business terms and high impact color charts. Complex lease analyses involving aggregation, as well as presenting various leases into a consolidated report format, can also be effectively handled by the system.

The C&W Tenant Lease Projection System is equally suited for small and mid-sized transactions, as well as for the broader requirements of national and international accounts. Additionally, it has the flexibility to respond to different market needs. For example, in California, a typical lease presentation includes a review of both monthly cash flows and annual cash flows. The C&W Tenant Lease Projection System can accommodate this requirement, whereas most programs in application cannot. This feature, the side-by-side lease comparisons, and the ability to respond with new calculations instantaneously during negotiations, place the system at least two years ahead of the industry, Tuminelli claims, adding "From the responses we have been receiving to the new presentations, we expect that other brokerage firms will be forced to utilize a similar system in order to compete into the next decade."

C&W also foresees its own expanded use of the program concept behind its successful Tenant Lease Analysis System for other of its service areas in addition to its commercial space broker services. Consequently, C&W is presently working with MW&E's Bielik in the developmental stages of a Landlord Lease Projection System and One Screen Effective Rent Calculator System - new weapons in its arsenal of cutting-edge, information technology.
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Title Annotation:new service for clients in Cushman & Wakefield Inc.'s Tenant Lease Projection System
Publication:Real Estate Weekly
Date:Nov 16, 1994
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