We equip companies for optimum decision-making by guiding real estate teams through the practical steps and actions required to collect, store and manage real estate data
Leases play a role, either directly or indirectly, in nearly every transaction we undertake. As the top full-service commercial real estate firm, it is imperative that we understand the how lease accounting will affect our clients. FASB’s Lease Accounting guidelines were revamped for the first time in over four decades and have resulted in commercial real estate becoming much more integral with corporate treasury and finance. The new lease accounting standards require virtually all leases to be capitalized on the balance sheets of lessees. This sea change has led to corporate occupiers viewing their owned and leased real estate in a much more strategic light. Occupancy is now playing a critical role, not only in Operations, but in Treasury and Finance decisions as well. Understanding the guidelines and their sweeping impact on our clients’ books is paramount to providing the world-class service expected from CBRE.
Purpose: Helping CBRE and its clients navigate the new lease accounting standards and structure transactions to ensure corporate objectives are being met.
Why: Leasing impacts all facets of our business and touches many of our service lines
- Tenant Representation – Financial statement presentation and lease classifications have changed
- Property Owners – SLB rules have changed
- Lessor Representation – Not much changed, but their tenants accounting changed mightily
- Developers – Build-to-Suit rules changed to a control model from a risks and rewards model
- Lease Administration – Records must be centralized and SOX compliant
- Capital Markets – Balance Sheet impact of leases has altered occupancy strategies
- Debt & Structured Finance – New guidelines have increased the spectrum of debt choices
- Portfolio Strategy and Optimization – The leasing rules have made this a critical component of companies’ real estate strategies
Tools and Technology
CBRE’s proprietary Lease Accounting Calculator gives users a real-time tool to analyze the financial impact of one or more leases. This will ensure that our clients understand the ramifications of entering into a lease and make the decision that allows them to meet their operational goals.