Paul Kinney, Executive Director of NRTA, stated that one of the primary reasons for the survey was to “understand where the retail industry stood in terms of its FASB preparedness and how NRTA could best help their membership gear up for the new accounting rules”. He said the results are “providing excellent new ideas about educational programs to offer the membership about preparing for the change. The results also provide a way for member companies to do some internal benchmarking”.
The survey results have been summarized into five key findings.
Finding 1: Companies are concerned and talking about the impact of the planned FASB changes, but not yet committed to action. Many companies are not going to take action until the final regulations are published.
Finding 2: Internal engagement is expanding beyond the Real Estate Department, and Real Estate is not leading these activities. There is limited interaction or engagement with external stakeholders, such as investors, bankers, or lenders.
Finding 3: Data reviews have started although there is some confusion about what data to review. A focus on integration data and process across the organization is in the works.
Finding 4:Systems may be ready – or may not be! Software vendors are updating their systems, but many companies are still using Excel spreadsheets or desktop systems, and most have not looked at their lease analytics software and processes. Many companies identified the need to look at new software solutions, but are postponing this action.
Finding 5: The verdict is still out on whether the changes will impact the leasing terms and duration, but not on the decision to buy versus lease.
Mike Nuzum, CEO of Lucernex, was surprised at the number of companies that are still sitting on the fence. As a former President of a retail organization, his advice to other CEOs is “start doing your homework today! There are many activities retailers should be undertaking now so that they can be in front of this change, instead of behind it. Waiting until the final regulations are published to start looking at data, process integration, and system capability will put software vendors in the drivers seat – not the Retailer. This type of reactive behavior always results in more costs, longer times to implement, and less than expected results.”
For more information or a copy of the survey summary presentation and white paper, please visit our website. lucernex.com.
The NRTA is a leading source of lease administration education for commercial and retail real estate lease professionals, attorneys, lease accounting and commercial property management specialists who are responsible for operating costs. Included among our broad spectrum of topics are: commercial real estate lease information, commercial property management training, tenant best practices, retail real estate trends, lease administration and lease abstracting.
Founded in 2000, Lucernex Technologies (lucernex.com) provides real estate professionals with powerful software tools to guide them through the real estate development process while also managing any size portfolio of leased and owned properties. It is the only solution designed by retailers for retailers. For nearly a decade, Fortune 500 companies in the commercial real estate, hospitality, retail, construction and engineering industries, both in the United States and Europe, have been utilizing Lucernex Technologies software solutions every day to ensure compliance, mitigate risk and empower effective growth. As an innovative leader in retail real estate solutions, Lucernex continues to grow its customer base by applying its Web-based software expertise and real estate development insight to provide advanced tools and services for business.