How and When To Use a Lease Abstract Form
When preparing for a merger or acquisition, conducting targeted and thorough due diligence is an important part of the deal process, because it can help identify potential issues that could have a material impact on the transaction. Lease abstracts are a critical part of that due diligence when the transaction involves commercial real estate leases. Using a generic lease abstract form or lease abstract template may suffice when the target company has just one, or very few, commercial real estate leases in place, and when those leases follow the same general format. When the transaction is large or complex, a law firm or corporate client may choose to use professional lease abstraction services instead of using a lease abstract form or checklist.
A lease abstract is a summary of the key points included in a commercial real estate lease. Lease abstracts typically highlight the financial terms of the lease and summarize any legal or business provisions that may be unusual or relevant to the proposed merger or acquisition. Effective lease abstracts need to be detailed enough so that the reader can understand the information presented and use it to make reasonable determinations.
Using professional lease abstracting services can be particularly valuable when:
- There are many commercial leases that need to be reviewed.
- Those leases are all formatted differently.
- The leases have been amended multiple times.
- There are significant leased assets involved in the merger or acquisition deal.
- The transaction is happening in a short time frame or on an expedited timeline, such that many leases need to be abstracted in a short time.
Firms that do not have the personnel and other resources needed to prepare lease abstracts efficiently should also consider outsourcing the abstracting process to a legal services provider. Outsourcing lease abstract services can save both time and money, and can help ensure that lease abstracts include all of the information about existing commercial leases that may be relevant to an acquiring company.
Baer Reed provides lease abstract and other legal services to corporate legal departments and law firms looking for professional, cost-effective services. Call us today at (888) 433-1990, or contact us online, to learn more about the full suite of services our legal professionals can provide.
- On August 24, 2017
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