CUSTOMERS ❯ Radom Capital
Radom Capital is a Houston-based real estate developer with a penchant for community-oriented development projects. The team is passionate about approaching real estate development as an opportunity to transform the Houston neighborhoods that they love.
Houston, TX, February 21st, 2024 — As CAM reconciliation season approaches every year, property managers, VPs, controllers, and bookkeepers face a range of challenges. This includes labor-intensive tasks, such as verifying leases, communicating with various stakeholders, and conveying important financial information.
However, for Lauren Crenshaw, VP of Property Management at Radom Capital, and her team, CAM reconciliation season has an entirely new look and feel thanks to their effective use of AI. Find out how a partnership between Prophia and Radom Capital overcame the challenges of CAM season, making Crenshaw’s property management team more efficient in the off-season and introducing portfolio-wide data accuracy that will serve the team’s operations for years to come.
Challenges of CAM Reconciliation Season
With numerous stakeholders and data-dependent processes involved in CAM, any misalignment can lead to a misinterpretation of tenants’ lease obligations, exposing teams to unnecessary risks and potential contract disputes. These challenges are even greater for multi-tenant properties where the risk of undercharging clients can lead to cash flow disruption on a large scale.
CAM budgeting and the reconciliation process are not just activities to help our owners recover expenses, they are lease obligations, and the lease directs us on how to administer those obligations. So that's why Prophia is such a fantastic tool. I go directly into the lease for information; it's not an interpretation or an assumption.
- Lauren Crenshaw, VP of Property Management, Radom Capital
As every property management team knows all too well, each lease approaches CAM differently, presenting a formidable task for property managers dealing with multi-tenant buildings or co-tenancies. Additionally, process inefficiencies exacerbate getting CAM done quickly and with accuracy.
The “Olden Days” of Property Management: Prophia Ushers in a New Era of CAM Reconciliation
One of the biggest improvements Lauren Crenshaw and her team experienced after onboarding their assets onto Prophia was portfolio-wide structure; every lease and every lease concept is captured homogeneously with Prophia’s AI making exercises like data verification and interpretation easier than many individuals on the team thought possible.
CAM obligations are traditionally handled and interpreted at the individual level with every team member using their own system of record to capture key concepts. This has led to disparate systems of record that make CAM reconciliation a collaborative nightmare.
In the olden days, we would read the lease document, abstract it, read it again, and make sure everything looked good. Then we would go through a series of checks bookkeepers, controllers, and the VPs. That's several people in an organization spending a lot of time reading, reviewing, and going back and forth. Now, we upload any new lease doc to Prophia and the abstract is there—it's directly from the lease so we know the information is correct.
- Lauren Crenshaw, VP of Property Management, Radom Capital
Simply standardizing the way their team organizes tenant data launched Radom into a new era of CAM reconciliation, resulting in time saved and portfolio-wide accuracy. For leaders like Crenshaw, this newfound confidence in tenant data accuracy makes every conversation with a stakeholder run with greater efficiency and it allows her to fulfill the previous year’s CAM obligations without leaving any money on the table.
Prophia’s CAM Coverage
Prophia’s advanced AI addresses the multifaceted needs of everyone involved in CAM reconciliation from VPs to individual team members. With a language learning model that improves with every scan of every proprietary lease, Prophia today understands and recognizes over 200 lease terms found in commercial contracts. This makes our system second to none in the world of property AI solutions.
For CAM specifically, Prophia recognizes key terms and phrases in lease documents associated with common area maintenance obligations. “I tell my team to throw in a rent roll so Prophia can create a background,” Crenshaw explains, “Then we add lease documents and everything just builds.” Once Prophia synthesizes your proprietary lease data, it automatically generates a lease summary containing important tenant terms. The system also creates a dynamic stacking plan that captures vacancies and arranges a property’s in-place tenants.
1. Expense Limits & Caps
Prophia captures language related to expense caps, removing ambiguity around controllable CAM fees.
2. Base Years
The AI swiftly identifies and hyperlinks base years in lease summaries for accurate ledger creation.
3. Expansions & Relocations
Prophia's stacking plan highlights tenants with expansion rights or relocation amendments, facilitating CAM calculations.
4. Exclusions
Tracking exclusions prevents "double dipping" and enhances expense understanding for management teams.
5. Gross-ups
Prophia enables easy search and verification of terms related to gross-ups, crucial for accurate CAM calculations.
6. Pro-rata Shares
The dynamic stacking plan captures essential tenant terms, ensuring fair pro-rata calculations.
With clear insight and access to these important CAM terms, Crenshaw and her colleagues now cruise through reconciliation tasks. Moreover, the Radom team uses Prophia for more than just CAM season, including daily administrative tasks that often get overlooked when teams are trying to find areas of improvement to achieve greater efficiency.
Real-World Impact - Radom Capital Transforms Daily Property Management Task With AI
With CAM reconciliation efficiency locked in, the Radom property management team was able to focus on other areas in their daily operations that weren’t running as seamlessly as they could.
Leveraging Prophia’s dynamic features and custom reporting, the team successfully implemented task automation for lease abstraction and onboarding procedures for new team members. This has enabled the team to work effectively in multiple areas of day-to-day operations.
Lease Abstraction
With every document uploaded, whether that’s a rent roll, a lease, or an amendment, Prophia synthesizes tenant data and automatically generates a lease summary with key terms. These terms in the Prophia-generated abstract are clickable and directly link back to the original lease, making data verification instantaneous.
The Dynamic Stacking Plan
Prophia’s AI also creates a dynamic stacking plan, offering a detailed overview of spaces in a given property. Property management teams can easily track leased space, WALT, average in-place rent, and upcoming vacancies.
Once I put my property data in, Prophia creates this wonderful stacking plan. This is a stacking plan for today, but I can also adjust the dates for the future.
- Lauren Crenshaw, VP of Property Management, Radom Capital
Lease & Building Reports
As a next-generation property data supplier, Prophia also accelerates the data-to-insight pipeline with custom reports. Every team within an organization from property management to asset management and leasing can review trends happening across their portfolio and make business decisions with greater confidence and speed.
Conclusion
The partnership between Radom Capital and Prophia has not only revolutionized CAM reconciliation processes but has also fundamentally transformed daily property management operations. With Prophia's dynamic features and comprehensive coverage of CAM terms, Radom has automated critical tasks such as lease abstraction and onboarding procedures to make every administrative activity run with ease. As Radom Capital continues its mission of community-oriented development projects throughout Houston, their partnership with Prophia represents yet another way the team continues to innovate CRE.
