Real Estate Compliance Tracking

Real estate compliance overview

0:00 Real estate investors can use Lextree to manage all the legal and compliance data related to all the properties in their real estate portfolios. There are 21 modules in Lextree. We will focus on three that are most commonly used for managing real estate in Lextree. The real estate module itself, the entity ownership, and legal entities modules.

0:21 As usage of Lextree expands and grows in your organization, it is common to turn on at least one of these additional modules. Taxes, treasury, which is used for everything from bank accounts to credit facilities, governance for officer and director appointments, and environment health and safety tracking depending on the nature of your real estate portfolio.

0:42 Lextree has a platform of features that allow you to stay on top of everything related to your portfolio. There’s a centralized compliance calendar that pulls together all the critical dates in the system. There are workflow features that allow your team to work together to get results.

1:01 You can customize Lextree extensively. There’s a timeline that will show you a visual change in records over time. And of course, you can attach files of any type to any record in Lextree. With that background, let’s go look at Lextree and the real estate module specifically.

1:18 The dashboard will show you all of the activity that’s going on currently that you need to attend to. We’ll focus on the modules that we outlined at the beginning.

Property portfolio and details

1:28 So let’s start with the real estate module specifically. The real estate module gives you a list of all of the properties in your portfolio. Whether you have 10, 100, or 1,000 properties does not matter.

1:40 The pricing of Lextree does not change. They’ll all be listed here. Depending on your subscription plan, you can control which users have access to which properties. All of the data that is available for all of your properties are completely customizable in the settings area.

1:54 We’ll return to that at the end. We’re going to take a look at this Cedar Ridge Business Campus property. So this would be a light industrial warehouse where we are the landlord and there are several tenants in the property.

2:09 But Lextree can be used for the other direction. If you’re a tenant that leases properties in multiple locations or you’re on both sides of the equation, it’s easy to do that in Lextree.

2:20 What we’re looking at now is the property detail. You’ll see the location information about the property, details about its type, what portfolio it’s part of, and parcel and zoning information as well as investment information about this particular property.

2:39 All of these sections are completely customizable. Change their name, throw them away, add, remove data, whatever you need. Down here at the bottom, we’re going to have all of the data that is related to this property available to us.

Property owners and investors

2:54 So here we have the owners. Currently, there’s one owner, Cedar Ridge Campus Owner LLC. This simply reflects the common structure of forming an entity, a legal entity, that owns the property in question.

3:07 And then the investors and owners of the property indirectly invest in that entity. So that’s what we’re trying to capture here. But if you have multiple tenants on the deed and you want to allocate their ownership interest, you can certainly do that in Lextree quite easily.

3:25 Now we can also show the investors. And in this example, we have two active investors, Dogwood North and Sable Harbor Capital. They each have different equity shares in our property effectively through their ownership of the legal entity that owns the property.

3:41 We’ll look at that when we get to the entity ownership module.

Leases, encumbrances, and financing

3:46 You can track all the leases related to this property. And here we have three, Nagoya, Arcline, and so on. Adding a new lease is quite simple.

3:54 We can do that here. All the encumbrances related to this property, whether that’s related to a mortgage, construction liens, UCC financing statements, what have you, all those encumbrances can be captured here, which makes it very easy for reporting in the event of a financing or restructuring around this property.

4:15 Speaking of financing, all the financial engineering around this property can be captured here. Construction loan, line of credit, permanent loan takeout, and the history of the financing over time can be captured as well.

4:29 And then all the data related to these financings are easily accessible. And, of course, we can select any of these and go view those details.

Insurance and tax obligations

4:38 Insurance coverage related to the property. You can have multiple policies, certificates of insurance related to all of those as well. Tax obligations.

4:47 So this is an example about where Lextree can be as simple as you want or as robust and sophisticated as you require. So from a simple perspective, you can add tax obligations like local real estate taxes or special improvement districts that may impose a levy on you, as in this example.

5:07 But there’s also an entire tax module that you can simply turn on. It’s available at every subscription plan. And that would allow you to track taxes in a much more sophisticated, robust way.

5:19 So very simple tax tracking available here if you just want to know what taxes are related to this property. Easy to add. If you need something more sophisticated, then just turn on the tax module and you have all that capability available to you.

Permits and inspections

5:33 Permits. We have five permits in this example. There may be more in your case.

5:38 Whatever those permits are, capture them. They have their own life cycle, their own tracking, and you can trigger all of your monitoring of those permits. And then inspections, of course.

5:48 So every property is often subject to multiple inspections. We have inspection dates, what the status of those are. And when you go into any of these, if there’s a result with conditions, you can track those conditions and monitor the clearing of them over time as well.

6:04 So that gives us everything related to this property.

Property calendar and documents

6:07 Over here on the right, you’re going to see standard features related to the calendar. So in this event, we have a prospective tenant tour, but these might be compliance-driven calendar events as well, not just something related to the business, like showing the property to a prospective tenant.

6:24 We have attachments. So in this case, we’re showing a template that we use for all of our leases, but we can have as many documents in here as we want.

6:34 It’s very easy to add them.

Lease review workflows

6:36 And then we have workflows. So workflows are a powerful feature in Lextree. They can be very simple, just a checklist of things that need to get done, or they can provide a place of collaboration for people on your team.

6:48 This is an example of a more sophisticated workflow. So we’re in the process of a lease review. We have several checklists of items.

6:56 We’re now in a legal review step. We’re then going to be in approval, execution of the lease. We’re going to abstract that and add it to our calendar to monitor it over time.

7:05 Over on the right, we’ll track all the activity automatically. So as people are interacting with this workflow and doing this lease review, that’s all captured and displayed in the activity area.

7:16 We have attachments where we can see the draft of the documents that we are working on related to this workflow. And then, of course, Lextree has generated calendar events automatically from this workflow, and those calendar events will flow through to the central calendar and populate and notify everyone who’s on this workflow about what’s going on.

7:36 Workflows are another example of things that can be as simple as you want or as sophisticated as you need, depending on the work that needs to get done. So that is looking at the real estate module from the perspective of an individual property.

Reporting across the portfolio

7:54 But you can also step back and look at your entire portfolio, not just with the properties list, but you can look at all of the leases across all of your properties.

8:03 And so here we have multiple leases across our property portfolio. We can look at all the financings across the entire portfolio as well and compare and contrast those financings.

8:16 We can look at our tax obligations across all of them and so on. So the real estate module gives you a powerful set of tools to drill into an individual property and manage it to whatever level of detail you need and the ability to step back and look at your entire portfolio in the aggregate.

Legal entity compliance

8:34 So with that said, let’s go look at the legal entities module. The difference here is that we are managing the legal entities that own our properties.

8:43 And here we’re taking care of the compliance and legal requirements of those legal entities. So if we look for Cedar Ridge Campus Owner LLC, this is the entity we formed to manage our Cedar Ridge Warehouse light industrial property.

9:00 So you’ll see that with the LLC, we have an identity section that describes its legal form and jurisdiction, lifecycle, important formation dates, taxes, and reporting.

9:11 And then down at the bottom, we have all of its business registrations, governance documents, and any owner consents or actions as well. And notice on the right, we have the same core features.

9:22 We have a calendar of events that are important, so there’s an annual meeting next year. We have attachments related to this entity and workflows as well.

9:31 So that’s the perspective of a single legal entity, but we can come back to the registry and see all of them and manage them all entirely.

9:39 And like everything else, all this data about legal entities is completely customizable.

Equity ownership relationships

9:45 So now let’s move on to entity ownership. So, so far, we’ve been taking care of the legal and compliance, but now we want to look at the ownership structure of our entities.

9:55 The equity ownership list, and this is the first of two things I want to show you here. So equity ownership is going to show us all of the owners and holdings across our entire portfolio, when they were acquired, what their cost basis was, and so on.

10:11 So if, for example, I search for Cedar, you’ll see that our Cedar Ridge LLC has two parents, Dogwood North and Sable Harbor.

10:21 So we’re going to keep that in mind as we go look at feature number two in the entity ownership,

Automatic ownership charts

10:27 and that is the charts area. So Lextree has powerful charting capability. You don’t have to manually draw charts anymore.

10:35 We’re going to build the chart for you automatically from the data that we know about your ownership structure. Creating a new chart is very simple.

10:43 You just select new, and you can build a chart of the entire portfolio or a narrow slice, and that’s important because when you do a financing or a restructuring or you sell a property or acquire it, you may want to narrow the scope of the chart that you are building for whatever disclosure, due diligence, or know your customer that you’re having, requirement that you’re having to satisfy.

11:05 So let’s take a look at Cedar Ridge Real Estate Investment, and here’s what we saw from the property section. These are our two owners, Sable Harbor and Dogwood North, and Cedar Ridge campus owner, and I can zoom in on this and see some of that data.

Expanding the ownership structure

11:19 But the real power here is to select design, and we can now change what this chart looks like. So the first thing you’ll notice is that there are these numbers above Dogwood North and Sable Harbor.

11:32 What that indicates to us is that there is additional structure that is currently hidden on this chart. So let’s expand that.

11:41 So if I add this one here, we have Caroline Whitford above Sable Harbor as the owner of this LLC. Dogwood North has three things above it, and you’ll see there’s even more structure.

11:55 So there’s three direct parents but more beyond that, but we’ll just select the three. And then if we want to relay out the chart, we’re going to relay this out, and now you’ll see that we have those three entities that are investors in Dogwood North, which is our owner.

12:11 So depending on how much detail you need on your chart, you can easily add or hide it and distribute that however you need.

Customizing chart data and layout

12:21 There’s a lot of functionality in the chart design. I just want to show you one more thing, and the capability of what it means to be a data-driven design.

12:30 So you’ll see that we’re showing the legal entity type and the jurisdiction. And down here, for example, we have our company that owns the property.

12:40 It’s an LLC in Illinois, but we’re going to expand the data that is displayed there. So we’re simply going to choose this, and we have legal form and jurisdiction.

12:51 But now what we’re going to do is display the entity role as well. And what that reveals for us is that this is our property holding company.

13:01 So we drew in that data about this legal entity onto the chart. And this can be as expansive or as restricted as you want.

13:10 So very easy to manipulate and manage this chart however you need. Now, there are lots of options, but one of the things that we do by default is that we display the chart in a hierarchical manner with the parent investors on the top and the entity that owns our property at the bottom.

13:29 But you may not want that display. It’s very easy to change the orientation and put the entity that owns the property at the top.

13:37 So if you want the focus to be on Cedar Ridge campus as the entity that owns our property, just switch that around.

13:46 But you could also display it left to right or right to left if you choose. Completely up to you.

13:53 So from a global and micro perspective, very easy to modify and adapt these charts to meet your needs. And obviously you can change the shapes and the colors and the design any way that you want.

14:06 So those are the two features in the entity ownership module I wanted to show you. The equity ownership relationships and then the ability to build a chart automatically and have it be data-driven.

14:16 Very powerful features. Those are the three elements that make up most of our real estate investment clients and how they are managing their properties in Lextree.

Enabling additional modules

14:26 However, as your needs to grow, there are two administrative features I want to show you very quickly, just to give you a taste of the flexibility of Lextree.

14:35 So in the settings area, we’re going to turn on some additional modules. I said at the beginning, there are others that are often used like health, environment, and safety.

14:44 We may turn on governance to manage officers and directors for those legal entities that we’re managing. We could turn on licenses and permits if we need, but we’ll turn on taxes and treasury here.

14:55 And if we refresh that, then what you’ll see is now the menu has exposed those modules and we have the ability to manage all of our taxes and audits and so on.

15:06 Treasury, we can manage everything from bank accounts to loans that we are making or credit facilities to manage our borrowings as well.

15:15 So very robust, but easy to customize. You can make Lextree as simple as you need or as sophisticated as you require, depending on your needs and the depth of your legal and compliance data related to your real estate portfolio.

15:30 This has just been a taste of what’s possible for managing real estate in Lextree. Thank you for your time.