Lease Abstraction

Commercial Lease Abstraction

You convert a lease PDF (and amendments) into a structured abstract. Manual lease abstraction takes 4-12 hours per document depending on complexity; AI-assisted reduces that to 20-40 minutes of human review on top of a generated draft. The standardization matters as much as the speed — every abstracted lease should fit the same schema so a portfolio can be queried.

============================================================ === PRE-FLIGHT ===

• Lease document(s): original lease PDF + ALL amendments + side letters + work letters. Missing amendments = wrong financial picture.
• Lease type: office, retail, industrial, ground lease, residential (CA Civil Code §1947 differs), medical office, mixed-use. Drives which clauses to expect.
• Output schema target: VTS, Visual Lease, MRI, Yardi, ProLease, Excel template, or generic JSON. Each system has slightly different field names.
• Reporting purpose: lease admin (operational), tenant rep (negotiation prep), landlord acquisition DD, ASC 842/IFRS 16 accounting capture.

Recovery:

• Missing amendments: refuse to publish a final abstract; output draft + flag "amendments missing — DO NOT rely on for accounting."
• For complex retail leases (% rent + CAM gross-ups + exclusivity webs), surface complexity to a human reviewer; the abstract is a draft.

============================================================ === PHASE 1: DOCUMENT INTAKE + OCR ===

PDF preprocessing:

• If image-only PDF, OCR via pytesseract or AWS Textract (better for table extraction).
• Split lease into named sections (definitions, basic terms, rent, additional rent, options, default, indemnity).
• Extract embedded tables (rent schedule, CAM exhibit) as structured data, not flowed text.

Persist lease.text.json with section anchors so the abstract can cite source page+section per extracted field.

VALIDATION: Page count > 0, no all-white pages, text extraction confidence per section ≥ 80%.

============================================================ === PHASE 2: STANDARDIZED FIELD EXTRACTION ===

Extract into this schema (camelCase JSON):

{
  "parties": {"tenant": "...", "landlord": "...", "guarantor": "...", "broker": "..."},
  "premises": {"address": "...", "suite": "...", "rsf": 12500, "usf": 11700, "load_factor": 0.068},
  "term": {
    "commencement_date": "2024-04-01",
    "expiration_date": "2034-03-31",
    "term_months": 120,
    "rent_commencement_date": "2024-06-01",
    "free_rent_months": 2
  },
  "rent_schedule": [
    {"period": "Year 1", "start": "2024-04-01", "end": "2025-03-31", "monthly_rent_psf": 4.50, "monthly_rent_total": 56250.00, "annual_rent_total": 675000},
    ...
  ],
  "escalations": {"type": "fixed_pct", "pct": 0.03, "annual_review_date": "anniversary"},
  "options": [
    {"type": "renewal", "count": 2, "term_months": 60, "notice_window_months": 12, "rent_basis": "FMR", "rent_floor_pct": null}
  ],
  "additional_rent": {
    "expense_structure": "modified_gross",
    "base_year": 2024,
    "expense_stop_psf": null,
    "tenant_share_pct": 0.085,
    "cap": {"type": "cumulative_5pct_year_over_year", "applies_to": "controllable_only"},
    "gross_up_provision": true,
    "audit_rights": {"window_months": 12, "self_help": false}
  },
  "ti_allowance": {"amount_psf": 75.00, "total": 937500, "unused_treatment": "rent_credit"},
  "security_deposit": {"type": "letter_of_credit", "amount": 250000, "burn_down": [{"month": 36, "to": 125000}, {"month": 60, "to": 0}]},
  "use_restriction": "general office and ancillary uses; no medical, retail, or industrial",
  "co_tenancy": null,
  "exclusivity": null,
  "assignment_sublet": {"consent_standard": "not_unreasonably_withheld", "permitted_transfers": ["affiliates", "merger_consolidation"]},
  "termination_rights": {"tenant_kick_out_year": 7, "notice_months": 12, "termination_fee": "9 months base rent + unamortized TI/commissions"},
  "expansion_rights": {"type": "ROFO", "size_sf": null, "notice": "60 days"},
  "holdover": {"rate_pct_of_holdover": 1.50, "consent_required": false},
  "insurance": {"tenant_liability_minimum": 3000000, "additional_insureds": ["landlord", "property_manager"]},
  "default": {"monetary_cure_days": 5, "non_monetary_cure_days": 30, "late_fee_pct": 0.05, "interest_rate": "prime + 4%"},
  "estoppel_sndaa": {"estoppel_required": true, "snda_attached": true},
  "amendments_incorporated": ["Amendment 1 (2024-09-15)", "Amendment 2 (2025-03-01)"]
}

Every field has a source sub-field with {page, section, confidence}.

VALIDATION: Schema fields present (null OK if absent in lease — don't fabricate). Rent schedule sum reconciles to total committed rent over term.

============================================================ === PHASE 3: AMBIGUITY & FLAG DETECTION ===

Some lease clauses are inherently ambiguous; flag for human review:

• Gross-up provision boundaries: which expenses can be grossed up to 95%/100% occupancy? Listed expressly or implicit?
• CAM cap: cumulative vs annual? Applies to all expenses or controllable only? Taxes/insurance excluded?
• Tenant share: pro rata by RSF or fixed percentage? Adjustable on changes to building size?
• Renewal rent basis: FMR with floor? Pre-negotiated rate? Greater of (X, Y)?
• Assignment consent: "consent not unreasonably withheld" vs absolute discretion vs deemed-consent if no response in N days.
• Termination fee: includes unamortized TI? Brokerage commissions? Free rent? At what discount rate?

Flag each as {field, ambiguity, suggested_interpretation, reviewer_action}.

VALIDATION: At least 1 flag per lease (if zero, the abstraction is too confident and worth a second pass).

============================================================ === PHASE 4: CRITICAL DATES CALENDAR ===

Emit a calendar file (critical_dates.ics + critical_dates.csv) with reminders:

• Rent escalation date (60-day and 30-day pre-alerts)
• Renewal option exercise window opening + closing (1 year and 6 month pre-alerts)
• Lease expiration (24 / 12 / 6 / 3 month pre-alerts)
• Termination right exercise window (if applicable)
• Expansion/ROFO/ROFR triggers
• Security deposit burn-down dates
• CAM audit window (typically 12 months after year-end statement)
• Estoppel/SNDA delivery deadlines

VALIDATION: Calendar imports into Google/Outlook/iCal without errors.

============================================================ === PHASE 5: ABSTRACT OUTPUTS ===

Final deliverable directory:

lease-{tenant-slug}-{address-slug}/
├── README.md                # what each file is and where it goes
├── abstract.json            # full schema (Phase 2)
├── abstract.csv             # flat row for portfolio rollup
├── abstract.md              # human-readable summary
├── critical_dates.ics
├── critical_dates.csv
├── flags.md                 # ambiguities (Phase 3)
├── source_lease.pdf         # original (link, not copy)
└── audit_trail.json         # extraction confidence per field

The Markdown summary is a one-pager: parties, premises, term, rent, escalations, options, key flags. Designed for handoff to a broker / attorney / portfolio manager.

VALIDATION: All files render. CSV imports into Excel without column drift.

============================================================ === SELF-REVIEW ===

Score 1–5:

• Complete: All schema fields populated or explicitly null?
• Robust: Amendments incorporated? Rent reconciliation passes?
• Clean: Markdown summary fits one page? Critical dates calendar correct?
• CRE-credible: Would a lease admin or tenant-rep broker accept the abstract as a working draft?

Common gap: forgetting to incorporate amendments. The "original" lease's rent schedule is often superseded by an amendment.

============================================================ === LEARNINGS CAPTURE ===

Append to ~/.claude/skills/lease-abstraction/LEARNINGS.md:

— <asset type, lease length, complexity>

• What worked / awkward / patch / verdict.

============================================================ === STRICT RULES ===

• Never publish a final abstract without incorporating all amendments.
• Never fabricate a field. Null is acceptable; invented values are a tort.
• Never auto-import to Argus / VTS without reviewer sign-off. Wrong rent schedule = wrong valuation = lawsuit.
• Always preserve source citations per field for auditability.
• Always run the critical-dates calendar — missing a renewal notice can lose a tenant a premises.