2021 Highlights

2021 — what an Epic year!  And not just because Epic Games was one of our first new subscribers in 2021!  But also because 2021 brought LeaseCalcs an amazing cadre of new clients like Anaplan, PepsiCo, Cengage and E&J Gallo, to name just a few. This past year proved, yet again, that world class companies choose LeaseCalcs when they want world class lease accounting, lease administration, financial analysis and transaction management software.

A few key metrics for 2021:

• 100% of our Corporate clients renewed their subscriptions. Again!!
• 29% year over year revenue growth, driving tremendous profitability — and incredible bonuses for our entire team!
• Surpassed 10,000 active users of LeaseCalcs, with more than 7.5 billion square feet of real estate leases and over 1.2 million equipment lease assets under management. Whoa!
• 96% of new clients in 2021 were referrals from existing clients or key partners such as KPMG, RSM, EY, Deloitte, etc.  In other words, when you have a world class application, you don’t have to spend much on advertising.

A few other fun achievements:

• New clients included a lot of firms that previously selected a competitor’s application, but then realized those applications couldn’t actually perform as needed. If you chose the wrong horse, LeaseCalcs can get you back in the race. Fast!
• New clients also included several “repeat” clients. You know you have a world class application when your client’s Chief Accounting Officer or Controller moves to a new company and the first thing they do is call you to get LeaseCalcs at their new firm!
• We released an entirely new product module, RE:Act, providing end-to-end transaction / project management capabilities, purpose built for our corporate real estate and commercial real estate brokerage clients. Check it out!!

Here’s to 2022 … Let’s go!!

Oh … and we’re hiring across all roles, including engineering, sales and support!

Thriving through a pandemic

Closing the book on 2020 and looking back, I have so much gratitude for our resilient team and incredible clients. Through the midst of a pandemic, LeaseCalcs had another year of stellar growth – in revenue, total clients, profitability and headcount. While our world class SaaS application deserves some credit, the world class clients that continue to pick LeaseCalcs as their lease accounting, administration and analysis solution deserve all our thanks. This is especially true of the new clients – like the few examples below, among many others – we were honored to partner with in 2020.

As great as 2020 was, 2021 is already off to an epic start! Aside from the new clients who have already subscribed these past few weeks, we’re also excited to announce a major new upgrade to LeaseCalcs – full project management for real estate transactions!
https://bit.ly/3cbuUT0

Our Broker and Corporate Edition users will be able to manage every aspect of a real estate transaction, including budget approvals, tasks, timelines, teams, responsibilities, messages, exportable reporting, email alerts, etc., all integrated with our incredible financial analysis capabilities. So, here’s to an epic 2021 and thanks, again, to our clients and team for a great 2020!

COVID-19: A Tale of Two Rent Concessions

COVID-19: A Tale of Two Rent Concessions

In the words of Charles Dickens, “It was the best of times, it was the worst of times.”

Two tenants each received a $150,000 rent concession from their landlord. One tenant saw an immediate $150,000 improvement in net income, the other only $16,666. As a broker helping tenants make important decisions about their business, you must understand why this happened before you finalize another rent concession / lease restructure.

COVID-19 related rent concessions – rent deferrals or abatements – take many forms. Often, they are combined with a lease extension, or even a contraction, expansion and/or an early termination. But the way these concessions have to be accounted for differs depending on what’s happening alongside the rent concession.

For example, consider this basic example of a tenant who currently has 24 months of remaining term and its monthly rent is $50,000. Assume the landlord agrees to defer the rent for April, May and June and offers two different options:

1. Leave the lease term as is with 24 months of remaining term, and pay the $150,000 of deferred rent in three equal monthly payments in the last three months of the term.

OR

2. Extend the term of the lease by three months and repay the deferred rent during those three extra months.

These sound pretty equivalent, since in both scenarios, the same amount of rent is being paid. However, the accounting outcomes can be quite different.

In the first scenario, not only will the tenant preserve cash, but it would be allowed to credit its P&L by $150,000 in Q2 … right now! That could be hugely important for a company’s profitability today. In the last three months of the term, they would add the $150,000 that is then being paid to their P&L expense, but by that time this disruption will behind us and they can plan for that added expense accordingly.

In the second scenario, because the lease term was extended, your client cannot credit its P&L by $150,000 in Q2. Instead, the lease accounting rules require them to amend the lease, recast the rent schedule and add the three months of term. This results in a new calculation of straight line rent on their P&L, which will only reduce their P&L expense by $5,555 per month ($150,000 / 27 months). If your client is trying to shore up profitability right now, that’s only a $16,666 improvement in its P&L in Q2.

So, it’s really important to think beyond the cash and understand what your client cares about and what their options are.

To help you, LeaseCalcs has developed a COVID-19 Lease Accounting Guide that spells out all of the different real world scenarios, the accounting options and implications. Do you know which option is better for your P&L right now? Which option helps improve balance sheet metrics? EBTIDA?

Download LeaseCalcs’ guide to dealing with COVID-19 related lease concessions so you and your client make the right decision. Better yet, share it with them today!

Questions? info@leasecalcs.com

When Lease Accounting Meets Your Next Real Estate Deal

What Finance and Corporate Real Estate must know to improve outcomes and reduce risk.

Join our nationally recognized experts in lease accounting and commercial real estate transactions for this exclusive event in Houston. Learn what finance teams need to know about real estate lease negotiations, and what real estate teams need to know about accounting, in order to avoid unpleasant surprises with the new accounting rules.

• How the new rules are changing real estate transactions and strategy.
• How can renewal or termination options help or hurt your firm’s financial performance.
• Why simple changes in your lease negotiations can dramatically improve financial performance.
• Learn effective strategies to minimize the impact of the new standards.
• How free rent, TI allowances vs. “turn-key” deals and even co-working contracts effect EBITDA performance.
• Learn how ASC 842 / IFRS 16 standards are already affecting relocation decisions, subleases and profitability.

Are your leases stuck in the harbor?

If your company or your client is using an older lease administration program, you might have already heard the distress calls.

You see, a lot of companies are just learning that their leases – and their lease accounting project – are trapped in the harbor. Their existing system won’t – or can’t – help them get into compliance with the new lease accounting standards. With less than seven months before the new standards take effect for public companies, LeaseCalcs is like the Coast Guard for these firms.

We have successfully migrated other clients off of all of the other major lease administration programs, and have the ability to easily import all of their lease data as a result. In other words, LeaseCalcs can help your clients get their leases out of the harbor and help them navigate their way – quickly and easily – to compliance with ASC 842 and/or IFRS 16.

LeaseCalcs’ patented, award-winning, lease accounting and lease administration platform is fully GAAP and IFRS compliant. We have scores of global, public companies already using LeaseCalcs for all of their lease accounting and administration needs. Some of our clients even adopted the new lease accounting standards early – on January 1, 2018 – meaning LeaseCalcs is being used right now to drive financial reporting for public companies around the world.