SAP Solution in Detail

SAP ERP
SAP® Real Estate Management
Better Insight and Control OVER
YOUR PROPERTY PORTFOLIO

The SAP® Real Estate Man-

agement application is a full-
featured solution suitable for
all types of real estate. The
application gives you better
insight into and control over
your property portfolio and
can handle the entire real
estate life cycle – from the
acquisition and disposal of
real estate to management
of your property portfolio
and facilities and support
processes such as account-
ing and reporting. The soft-
ware is flexible enough to
cover industry-specific re-
quirements and integrates
fully with financial and logis-
tics software from SAP to
align your leasing transac-
tions with accounting, con-
trolling, maintenance, and
reporting tasks.
CONTENT

^ 4 Real Estate Life-Cycle ^18 Corporate Real Estate

­Management ­Management
18 Space and Move Management
^ 5 A Complete Real Estate 19 Room Reservation
­Solution
^20 Facilities Management
^ 7 Portfolio Management 20 Construction
7 Real Estate Analytics 21 Modernization and
8 Master Data Management ­Refurbishment
8 Usage View 22 Maintenance, Repair, and
8 Many Different Standard ­Service Management
­Reports
9 Architectural View ^24 Support Processes
9 Partner Management 24 Accounting
10 Transaction Management 25 Controlling
26 Documents and
^11 Commercial Real Estate ­Correspondence
­Management 27 Document and Records
11 Real Estate Search ­Management
11 Lease Management 28 Other Tools
12 Creating a Lease 29 Integration with SAP Industry
13 Giving Notice on a Lease Solutions
13 Renewing Fixed-Term Contracts
13 Lease Accounting ^30 A Wide Range of Business
13 Types of Provisions in Lease ­Benefits
Management Contracts 30 Find Out More
14 Condition Adjustment (Rent
Escalation) ^32 Quick Facts
14 Percentage Rent (Sales-Based
Rent)
15 Cost Recovery (Service-Charge
Settlement)
16 Third-Party Management
17 Legal Compliance
REAL ESTATE LIFE-CYCLE MANAGEMENT
A KEY DRIVER OF SUCCESS
Recent growth – along with economic
downturns, market globalization, and
energy reduction goals – has increased
the strategic importance of real estate
life-cycle management. Meanwhile, real
The SAP Real Estate Man-
agement application pro-
vides full support for port­
folio management, corporate
real estate management,
commercial real estate man-
agement, and facilities man-
agement. It can help you
develop, construct, operate,
and deploy the real property
related to your business,
while making property costs
more visible and controllable.
estate managers must meet a more
demanding set of goals for generating
revenue and cutting costs.
A recent study by Aberdeen Group Inc.
of small, midsize, and large businesses
from across the globe found that 71%
felt that the role of real estate and facili-
ties life-cycle management has become
more strategic over the past two years –
mainly due to company growth (see
Figure 1).1 This should come as no
1. Aberdeen Group Inc., Real Estate and Facilities Lifecycle Management: Strategic Value, Savings, and Efficiencies, June 2008.
4 SAP Solution in Detail – SAP Real Estate Management
s­ urprise when you consider that real
estate represents the largest financial
asset on the balance sheets of most
companies and often draws the highest
operating cost after human capital.
“Real estate and facilities spend is not
merely a sunk cost or just an operational
expense for enterprises,” Aberdeen
noted. “It can, in fact, prove to be a
strategic asset, and can even go so
far as to be a key driver of success,
depending on the industry or market.”
Making the most of this opportunity is
not always easy. Market globalization
and the prevalence of mergers and
acquisitions have made it difficult to
answer even basic questions such as:
What properties do we own? Which do
we lease? Where are these properties
located? How are they being used?
How much do they cost? How much
space is vacant?
26%
3%
71%
Source: AberdeenGroup, June 2008
In addition to greater portfolio diversity,
the managers of commercial real estate
face a higher dependence on capital
markets for property financing as well as
many new legal requirements. To meet
these challenges, they must optimize
their processes for compliance and risk
management, enhance the skills of their
employees, address increased business
competition, and modernize their IT
landscapes.
The SAP® Real Estate Management
application provides full support for port-
folio management, corporate real estate
management, commercial real estate
management, and facilities management.
It can help you develop, construct,
operate, and deploy the real estate
property related to your business while
making property costs more visible and
controllable.
Figure 1: Role of Real
Estate and Facilities
Life-Cycle Management
over the Past Two Years
•More strategic
•Less strategic
•Remained the same
A Complete Real Estate Solution
For Office, Retail, Industrial,
­Residential, and Land Portfolios

SAP Real Estate Management supports
the full real estate life cycle. In addition
to providing a centralized database of
information, it offers power­ful analytical
tools and functions for the development,
construction, operation, and deployment
of property.
As the solution map for this application
shows (see Figure 2), SAP Real Estate
Management provides robust func­
tionality for the following key business
processes:
Portfolio management. The application
can help you analyze property perfor-
mance, track property details, manage
your business partners, and handle
property acquisition and disposal.
Commercial real estate management.
You can automate searches for new
tenants as well as the creation of con-
tract offers, lease administration, rent
escalation, postings of open items, and
third-party property management.
Corporate real estate management.
You can optimize space utilization, room
and service reservation handling, and
the planning and execution of employee
moves.
Facilities management. The software
can also help you plan property invest-
ments, monitor construction and mod-
ernization projects, and schedule and
execute repair and maintenance work.
Support processes. You gain greater
control over your records, documents,
business data, and workflows and can
smoothly integrate lease processes
with your financials application.

Portfolio Real Estate Analytics Master Data Management Partner Management Transaction Management
Management

Commercial Real Real Estate Lease Condition Percentage Cost Third-Party Legal
Estate Management Search Management Adjustment Rent Recovery Management Compliance

Corporate Real Space Management Move Management Room Reservation

­Estate Management

Facilities Construction Modernization and Maintenance and Service Management

Management Refurbishment Repair

Support Accounting Controlling Tools Integration to

Processes SAP® Industry Solutions

Figure 2: SAP® Real Estate Management Solution Map

SAP Solution in Detail – SAP Real Estate Management 5

The real estate life cycle looks basi-
cally the same in all industries. How-
ever, the SAP® Real Estate Manage-
ment application is also flexible enough
to handle various industry-specific
real estate requirements for enter­
prises such as:
• Airports – which earn a large portion
of their revenue from leasing out
retail space, warehouses, hangars,
and concourses
• Banks – which must manage their
headquarters as well as networks
of local banking offices and often
manage real estate as a capital
investment using separate
companies
• Building services firms – which
provide comprehensive property
management services in a highly
competitive market
• Energy suppliers – which manage
properties for power plants, power
lines, transformers, and customer
centers in addition to administrative
buildings
• Facilities managers – who handle
office space for a company’s private
use and provide optimum working
conditions for its employees
• Harbors – which lease out offices,
terminals, sheds, and container
facilities to trading companies and
shipping and forwarding agents
• Housing authorities – who must
manage a large number of standard-
ized leases as cost-effectively as
possible
• Insurance companies – which deal
with long-term investments in real
estate
• Manufacturers – which may lease SAP Real Estate Management is built
property to outside contractors and on the SAP NetWeaver® technology
suppliers while managing their own platform and smoothly integrates with
production facilities, warehouses, the SAP ERP application to align your
and offices leasing transactions with your account-
• Office-space managers – who ing, controlling, maintenance, and report-
emphasize the attractiveness of ing functions. The result is a centralized
properties and the satisfaction of database for property information, com-
tenants to meet the goal of full bined with robust analytical tools and
occupancy powerful functions for property-related
• Postal services – which depend processes across an enterprise.
heavily on a highly efficient network
of branch offices, logistics centers, You get complete support for key man-
and distribution centers agement processes and all relevant
• Public sector organizations – types of properties. The software can
which must manage the large real help you manage complex portfolio mixes
estate holdings of government and that include office, retail, industrial, and
nonprofit organizations while com- residential properties as well as land.
plying with unique legal and budget- It can streamline and optimize such key
ary requirements business activities as portfolio manage-
• Railways – which increasingly treat ment, commercial real estate manage-
their train stations like shopping ment, corporate real estate management,
centers, while managing their track and facilities management – as well as
systems, warehouses, and mainte- a variety of essential support processes.
nance facilities
• Real estate investment trusts –
which are expected to realize the
highest possible returns for inves-
tors while minimizing risk
• Retailers – which require a per­fectly
functioning infrastructure of attractive
branch stores, modern warehouses,
and strategically positioned distri-
bution centers
• Shopping center managers – who
must entice shoppers and meet the
service expectations of their tenants
• Telecommunications firms – which
lease sites for antennas and other
infrastructure in addition to office
space
Portfolio Management
Defining and Understanding
Your Assets
Making a profit is a key element of effec-
tive portfolio management, along with
limiting risk. Selling or buying property
at the right location, time, and price
requires a comprehensive stream of
information that is both timely and
accurate.
SAP Real Estate Management – together
with SAP ERP – can help you analyze
your real estate portfolio, evaluate
investment decisions, and manage all
data related to your portfolio and busi-
ness partners. Included are functions
for real estate analytics, master data
management, partner management,
and transaction management to help
you:
• Evaluate key performance indicators
of existing property portfolios, such
as performance and risk
• Analyze and compare investment
alternatives
• Simulate how future investments
might affect portfolio performance
• Track detailed data about building
architecture and usage
• Manage relationships with business
partners involved with the portfolio
• Provide standardized roles and related
reports that cover return on invest-
ment, building-related expenses and
revenues, utilization and vacancy rates,
and space specifications – as well as
maintenance, repair, and service costs
• Visualize portfolio data by integrating
computer-aided design (CAD) and
geographic information system (GIS)
software from third-party vendors
• Track property acquisition and sales
processes
Real Estate Analytics
To make smart portfolio decisions, you
must carefully consider all relevant influ-
ence factors and evaluate the projected
outcomes of those decisions. One of
the biggest challenges for real estate
executives is portfolio insight. This could
include monitoring a property’s return on
investment, critical key dates, or occu-
pancy levels.
SAP Real Estate Man-
agement – together with
SAP Real Estate Management provides
a single, complete, fully integrated source SAP ERP – can help
of historical, current, and forecast data you analyze your real
for your entire enterprise. This single
information source gives you an accurate estate portfolio, evaluate
basis for decision making, budgeting, and investment decisions,
planning and facilitates a robust audit
trail. Managers, department heads, and and manage all data
employee teams can instantly access ­related to your portfolio
the information they need for their par-
ticular duties. This can improve perfor-
and business partners.
mance, encourage collaboration, and
facilitate faster responses to tenant
requests. Embedded security functional- and operational decisions. These tools
ity helps ensure consistency and helps can also help you respond to changing
maintain data integrity. business conditions more quickly and
find new ways to reduce costs.
A fully integrated analytical layer helps
you manage your portfolio more effec- Integration with the SAP NetWeaver
tively and perform capital planning, Business Intelligence (SAP NetWeaver BI)
budgeting, and forecasting more accu- component lets you generate reports
rately. You can capture data from all that – for example – list detailed char-
integrated software. These might include acteristics of specific property sites,
core financial, project, facility, and main- the financial terms of property leases,
tenance solutions – as well as solutions costs and revenues related to certain
related to property portfolio data, leases, locations, property utilization and vacan-
vacancies, and space utilization. Cus- cy rates, and relevant deadlines for the
tomized reporting and calculation tools property portfolio. You can predefine
help you analyze that data and provide user roles and create role-specific work-
crucial support for strategic, tactical, books that support user-tailored analytics.
SAP Solution in Detail – SAP Real Estate Management 7
You can analyze data from both SAP
and non-SAP applications as well as
data from external databases, online
information services, and the Internet.
The analytical tools available in SAP Real
Estate Management can help you define
key figures and track key performance
indicator metrics – such as return on
investment and discounted cash flows
– configured according to your needs.
You gain additional insight with options
that let you make drill-down analyses,
generate charts, and export data to
Microsoft Excel and other applications.
You can generate reports for cost recov-
eries (service-charge settlements) or
real estate controlling and monitor all
contract terms, notice dates, occupancy
dates, and vacancies.
Many Different Reporting Templates
The SAP® Real Estate Management
application offers a wide range of
standard reports that collect, sum-
marize, and evaluate property and
related financial data. Included in
these reports is information about:
• Individual sites, buildings, land,
rental objects, architectural objects,
and asset assignments
• Occupancy of rental objects
• Vacancies (and the reasons for
those vacancies)
• Leases – including information on
lease terms, notices, renewal, and
security deposit agreements
• Measurements for selected port­
folio data or contracts
• Conditions of rental properties
and contracts
• Rent escalations that show the
adjustment history of conditions
For standard reports in SAP Real Estate
Management, you can select assets
and contracts by business partner or
by role. You can restrict the selected
assets by key data or time periods.
You can modify standard reports, save
and reuse report layouts (either standard
or customized), and manage different
types of layouts for the same report.
SAP Real Estate Management gives
you rapid access to key information –
including open items on tenant accounts,
revenues, property costs, and relevant
posting documents. By exporting data
to applications like Microsoft Excel,
you can create reports for predefined
groups of properties, calculate totals,
and create charts.
for selected rental properties and
contracts
• Business partners – by role, address
data, bank details, or associated
asset, assigned to property and
contracts
• Chargebacks – including cost
recovery for common-area mainte-
nance – with displays of current
settlement periods per settlement
unit, itemization or meters for settle-
ment units, meters for rental proper-
ties, and reports
• Controlling – which includes line
items posted to the real estate data
and contracts for each asset type
and cost element
• Parcels of land you own and related
ownership and usage information
and permits
Reports are available for use with vari-
ous market indicators, financial model-
ing for premises, lease/buy/retain/sell
modeling, and risk modeling. You can
compare your real estate performance
results with other key business figures
by retrieving comparative data from
outside sources such as the Internet.
You can run reports for any part of your
portfolio – using list or detail views.
Master Data Management
Real estate is a complex asset that
involves a wide range of detailed infor-
mation. In addition to recording this
information, you must track all changes
in data over an asset’s life cycle. Since
property is often spread across a broad
geographic region, you need a single,
fully integrated source of information
that is accurate and up-to-date.
SAP Real Estate Management lets
you display and manage property data
through a usage view or an optional
architectural view.
Usage View
With this view (see Figure 3), you can
monitor and manage data related to the
actual usage of sites, buildings, and land
in your portfolio. You can track the value
of these assets as well as details – such
as the number of rooms in a building
and its square footage. You can track
utilization details for individual assets,
such as type of usage, utilization level,
and the opportunity costs for vacancies.
For each property type, the usage view
lets you display and manage the follow-
ing types of information:
General data. You can enter informa-
tion about administrative structures,
location descriptions, relationships to
profit centers or business departments,
applicable tenancy laws, and units of
measurement (such as square feet).
Dates. You can list critical dates such
as those for inspections, maintenance,
or renovations.
Fixtures and fittings. You can display
property details such as the type of
heating and flooring or any intercom
systems that may be present and use
these details to define rental rates.
Posting parameters. You can assign
rules for posting contract conditions
into general-ledger, accounts receiv-
able, and accounts payable software.
You can specify rules for calculating
taxes and assign multiple vendors
or customers for particular contract
conditions.
Partners. The software lists the orga­
nizations or persons that are related
to a property and their roles (such
as tenants, owners, architects, tech­
nicians, or administrators).
Availability. You can map income leases
and expense leases to specific proper-
ties in your portfolio. A time-dependent
indicator specifies which properties are
available for occupation and which have
already been leased.
Services. The software assigns main­
tenance and repair areas for individual
properties based on integration with
functionality for enterprise asset
management.
Company Code
Building or Land
Rental Pooled
Unit Space 1
Rental
Space (RS) RS 1 RS 2
•leased •vacant
Figure 3: Usage View of Portfolio Structure
Architecture. You can display information
on defined assignments for one or more
usage objects to an architectural object.
Architectural View
An optional architectural view provides
detailed architectural information about
a building’s structure and attributes. The
hierarchy of this structure can be defined
with respect to attributes such as:
• Locality – to specify address
• Floor – to indicate building level
• Space – to specify parking spaces,
storage space, or office space
• Room – to specify room number
You can use the architectural view to:
• Specify measurements for a property
– including its total area, capacity, and
numbers of workstations
• Assign relationships of business part-
ners to the property, such as owner
or service provider
• Assign employees to rooms and
­allocate costs
• Manage room reservations
SAP Solution in Detail – SAP Real Estate Management
Site
Pooled Pooled
Space 2 Space 3
RS 1
RS 1 RS 2 RS 3
• Plan and execute moves
• Link to graphical software, such as
a CAD application
Partner Management
To manage your business partners
effectively, you must be able to specify
the partners associated with your real
estate transactions and assign them
to one or more roles based on specific
business scenarios. You must also be
able to change those roles as needed
over the course of a business relation-
ship and access this information at any
time. SAP Real Estate Management
can help you enter and assign vendors
and customers for each transaction.
A business partner could be an organi-
zation, group of companies, or individual
in which your company has a business
interest – including contract-related
contacts or service providers. A partner
may act as an owner, operator, architect,
tenant, lease administrator, service
9
 manager, or employee (in a corporate track different transaction steps and
real estate situation). Users can define handle various approval procedures.
partner roles for both real estate objects
and leases and give partners more than The software lets you link purchase and
one role. Partners can have role-specific sales agreements, along with related
addresses – one as tenant and another payment information, to master data
as owner, for example – and be identified for pieces of land and buildings. You
by their relationships with other partners. can track all documents and approval
circulars involved in the agreements as
You can create and manage portfolio well as data related to ownership, ease-
Managers of retail, data specific to a business partner and ments, and rights for parcels of land.
­office, industrial, and integrate that data with other functions
in SAP ERP, such as accounts receiv-
residential property able or accounts payable, to achieve
­require robust support a 360-degree view of the business
partner. In addition, you can specify
for enterprise resource what role the business partner plays
planning to cover their in business processes for individual
properties. When creating an income
core business processes lease with a new business partner, for
and drive revenue. SAP example, you can use the real estate
contract to create a new business
Real Estate Manage- partner record as well as a customer
ment provides functions account for accounts receivable
purposes.
for real estate search,
lease management, rent Transaction Management
(condition) adjustment, Property acquisition and sales are com-
percentage (sales- plex processes that involve many stake-
holders, last significantly longer than
based) rent, cost re­ other real estate processes, and require
covery (service-charge a large amount of data. SAP Real Estate
Management provides a holistic display
settlement), third-party of all transaction-related data – including
management, and legal information on the parties, property,
and contracts involved – to give you
compliance. complete transparency into the approval
process. You can use the software to

10 SAP Solution in Detail – SAP Real Estate Management

Commercial Real Estate Management
Covering Core Processes and Driving
­Revenue

Managers of retail, office, industrial,

Prospect Correspondence
and residential property require robust
support for enterprise resource plan- Search Request Search Contract offer Master
ning to cover their core business pro- • Real estate search • Standard search • Contract type Data
request type • Extended search • Objects (Real estate Summary
cesses and drive revenue. SAP Real
• Price (from/to) • Text search search request, offered
Estate Management provides functions • Location
­object, and rental object)
• Partner (prospect)
to support commercial real estate pro- • Square feet • Term Contract
cesses, such as real estate search, • Fixtures/fittings • Conditions . . . Offer
lease management, rent escalation or
condition adjustment, percentage or Copy Tenant
sales-based rent, cost recovery or Offered Object Hit list Lease-out
service-charge settlement, third-party • Price • Favorites • Contract type
management, and legal compliance. • Location • Reject object • Objects (Real estate
• Square feet • Change status search request, offered
Contract
These functions make it easier to: • Fixtures/fittings
­object, rental object, and
• Create offer contract offer )
Form
• Manage and operate third-party • Create lease-out • Partner (tenant)
property • Term
• Manage expense and income leases • Conditions . . .
and other property-related contractual Lease Activate General
agreements ­Abstract Letter
• Monitor critical days or reminders
and renewal options Figure 4: Real Estate Search Process Flow
• Make price index–related condition
adjustments and other types of rent The software can help you generate a Lease Management
escalations list of properties that meet the specific
• Manage percentage-rent agreements needs of prospective tenants and include Lease administration is a time-consuming
• Match vacant properties to requests details such as property location and business. SAP Real Estate Management
from prospective tenants amenities. Once a prospective tenant can make it more efficient.
• Create contract offers selects a property, you can send an
• Calculate chargeable expenses, automatically generated contract offer. The software lets you proactively manage
­balances, and advance payments Once the contract is signed, you can the entire lease life cycle – from initial
for common-area maintenance convert the offer into a lease agreement. lease abstracting and setup through bill-
reconciliation This can save you time, make the leasing ing, lease changes, critical-date tracking,
process more transparent, improve the renewals, and lease expiration or termi-
Real Estate Search quality of the process, reduce vacancy nation. Automated processes and tem-
rates, and increase revenues. plates increase productivity and mini-
An effective way to minimize vacancies mize the risk of human error to keep
is to search actively for follow-up ten- You can sort search properties by price, tenant satisfaction high and administra-
ants for vacant or soon-to-be vacant location, square footage, fixtures, or tive costs low. Integration with the SAP
properties at the earliest possible stage. ­fittings. A search request summarizes ERP Financials solution provides a highly
You can use SAP Real Estate Manage- lease dates provided by the prospect to visible audit trail of all financial activities
ment to search for vacant rental objects, find the most suitable property. Features related to your leases and a clear view
find suitable prospects for these rental for a fast entry let you search by specific of tenant accounts. It also helps you
objects (or vice versa), and send contract criteria and incorporate additional data automate special accounting posting
offers. later. Search results are displayed in requirements.
a hit list that you can use for further
activities related to the search.

SAP Solution in Detail – SAP Real Estate Management 11

 You can use the software to define and
specify a variety of contract items. You
can, for example, specify the purpose of
a lease and the resulting posting activi-
ties. Contract types include expense
and income leases that involve open
items, either for a vendor or customer
account. Contracts could also be
assigned to parts of the internal orga­
nization such as cost centers or auto-
An effective way to mate recurring postings between general-
­minimize vacancies is ledger accounts. When you specify the
contract type, you can note whether there
to search actively for are any related to lease, sales, service,
follow-up tenants for or security deposit agreements.
­vacant or soon-to-be- You can also specify the start and – if
vacant properties at the applicable – end date of a contract and
the prerequisites for giving notice to
earliest possible stage. terminate or renew the contract. You
You can use SAP Real can use the software to monitor the
related processes – such as sending
Estate Management to out confirmation letters to tenants,
search for vacant rental making final postings, or launching the
search for a new tenant. If necessary,
objects, find suitable you can track changes by assigning
prospects for these validity periods to these rules.
rental objects (or vice Each contract can refer to one or multiple
versa), and send con- usage objects, parcels of land, functional
locations, pieces of equipment, cost
tract offers. centers, and work breakdown structure
(WBS) elements. Predefined rules pro-
vide comprehensive support for date
With SAP Real Estate Management, and deadline management.
you can create standardized lease
agreements that define the primary Regarding usage tracking, only rental
parameters of contractual relationships units and rental space can be assigned
for all the properties in your portfolio. to income leases. However, you can
You can use these flexible agreements assign available rental space from a
for vendors or customers and modify pooled space. You can assign these
them to reflect any unique rental fees rental objects to a contract for a speci-
or terms of a specific contract. fied time period. You can also group
12 SAP Solution in Detail – SAP Real Estate Management
rental spaces and units that are subject
to the same rental fees in one lease.
Creating a Lease
When you create a lease, you can enter
the data you need most frequently into
a simplified form. This includes such
critical data as:
• Tenants or landlords involved in the
lease
• Lease start and end dates as well
as notice and renewal rules
• Rental fees
• Relevant buildings, pieces of land,
rental units, and rental spaces
• Any rules for settling percentage rents
or cost recovery from common-area
maintenance
• Postings rules
Your lease can also include the following
details:
Business partners. You can create one
or more new partners or assign existing
partners involved in a lease and assign
roles to them. This might include, for
example, tenants or landlords.
Terms. You can define a contract’s start
and end dates, duration, periods for
giving notice, and renewal rules for fixed-
term contracts. The software enters the
date of contract start as the default first
posting date. If no contract end date is
specified, the contract will be treated as
unlimited. If the first posting date and
the possession date are different from
the contract start date, the software
allows you to track these deviations.
Objects. You can create new rental
spaces from a pooled space when cre-
ating a lease and assign existing rental
units and spaces to the lease – with or
without a time restriction.
Contract measurements. You can
define dedicated measurements that
are unique to the lease and could not
be derived from the usage objects. For
example, you can note the measure-
ments of a common area in the lease or
assign the number of persons using a
property to apportion trash ­collection
fees.
Posting parameters. You can define
time-dependent posting terms such
as payment methods, tax types, and
dunning rules – as well as the terms for
the frequency and form of payments
and the terms for organizational assign-
ments related to the posting, such as
a profit center or business area.
Conditions. You can define time-­
dependent rental fee data for a lease
or for the rental spaces addressed by
the contract, such as a basic rental
fee or advance payments for common-
area maintenance. You can use these
conditions to create planned records in
the cash flow for any postings that will
be generated. These planned records
will be converted into actual records in
the financial accounting software during
the periodic posting run. Conditions
can be used for both leases and rental
objects. You can process multiple cur-
rencies within the same lease.
Adjustment. You can use the software
to escalate rents on a legal or contrac-
tual basis automatically and specify the
relevant rules.
Settlement participation. Although cost
recovery for common-area maintenance
is automatically defined for each asset,
you can define exceptions to automatic
settlement participation. The software
provides an overview of all rental prop-
erties affected by chargeback activities
and shows the time periods relevant to
each rental space. It also shows settle-
ment participation details for the asset
you select. You may change the validity
period and the participation type of the
property.
Option rate methods. Where applicable,
you can specify the option rate method
for monthly calculations of deductible
and nondeductible input taxes and man-
age related correction items in upcoming
years.
Reminders. You can define rules for
calculating reminder dates for renewal
options, termination notices, and other
important lease activities.
Overviews. You can specify key analyt-
ical reports, such as a list of items in the
customer account related to the tenant.
Giving Notice on a Lease
Every lease that has no fixed end date
must include terms for ending the con-
tract. These include procedures for
generating termination notices and
­setting lease periods and deadlines for
deciding whether to continue or end a
lease. With SAP Real Estate Manage-
ment, you can define standard notice
procedures for a contract and include
multiple notice rules in each lease. This
lets you set different rules for property
tenants, owners, and operators.
SAP Solution in Detail – SAP Real Estate Management
Types of Provisions in Lease
Management Contracts
• Fixed-rent or percentage-rent
(sales-based) provisions within
income and expense leases
• Security deposits
• Easements and rights of way
• Environmental liabilities
• Property sales and purchase
agreements
• Service agreements
• Provisions for postings between
legal entities of a group of
companies
Renewing Fixed-Term Contracts
You can streamline the renewal of fixed-
term contracts by assigning renewal
rules. SAP Real Estate Management
provides you with two renewal methods:
• Renewal by option – which lets you
define one or more one-time or recur-
ring renewal options that must be
approved individually by the contrac-
tual partner before they take effect
• Automatic renewal – which lets you
specify how a contract term can be
renewed without additional approval
You can apply renewal options and
automatic renewals separately or in
combination. Renewal options always
take precedence over automatic renew-
als. An authorized party must give notice
to discontinue automatic renewals.
Lease Accounting
With SAP Real Estate Management, all
property posting processes integrate
completely into financial and managerial
13

accounting functions within SAP ERP
Financials. This means that you can see
all the data for your contract partners
and view up-to-date costs and revenues
in real time.
Each landlord has a business partner
and corresponding vendor record, and
each third-party tenant has a corre-
sponding customer record. Internal
occupancy can be billed to cost elements
such as cost centers, WBS elements,
or internal orders.
Periodic postings of all payable, receiv-
able, and general-ledger transactions
are created in an automated posting
run that includes all postings due out of
a cash flow that is based on the defined
contract conditions. In the same way,
vacancy periodic postings are created
for all rental objects, where the vacancy
cost centers are billed.
Real estate invoices are created and
printed from within SAP Real Estate
Management based on postings made
14 SAP Solution in Detail – SAP Real Estate Management
to the customer account. The created
open items are managed through func-
tions for accounts payable and accounts
receivable.
One-time postings related to leases may
be generated through SAP Real Estate
Management. This makes it possible
to post an individual fee that is not part
of the lease directly to the customer
account.
The application also has functionality
for handling multiple currencies in a
lease. You can define conditions for
contracts, rental objects, or contract
offers that are in a currency that differs
from the local currency of the company
code. For foreign currency exchange,
SAP Real Estate Management deploys
the standard features out of SAP ERP
Financials. Different currencies can
be entered directly when processing
conditions or via defined currency
translation rules in the posting term.
The software also lets you split condi-
tions into postings for multiple customers
or vendors if, for instance, a specific
rental fee will be paid by more than one
tenant.
Condition Adjustment
(Rent Escalation)
In many leases you must specify how
rental fees or other conditions for con-
tracts and objects might be adjusted.
These changes may include freely
defined adjustments, adjustments
based on indexes such as a country’s
consumer price index, or adjustments
of advance payments and flat rates
based on the results of a cost
recovery.
With SAP Real Estate Management,
you can use different calculation meth-
ods to change the amounts of condition
items for real estate contracts, pooled
spaces, rental spaces, and rental units
to meet the requirements for mass pro-
cessing. These calculation methods
include:
• Free adjustment (residential and
commercial)
• Index adjustment
• Adjustment based on a representative
list of apartment rents
• Adjustment based on comparative
apartment rents
• Adjustment of advance payments and
flat rates based on the results of a cost
recovery (service-charge settlement)
To adjust condition amounts, you first
assign adjustment rules to the conditions
in the contract or rental object that are
to be adjusted and change or add to
the parameters for these rules. The
adjustment process then consists of:
1. Specifying the adjustments (the
­system generates a list of possible
adjustments)
2. Editing the adjustments (you can
make changes to automatically
­calculated adjustments)
3. Generating correspondence for
­tenant approval
4. Entering the approval or rejection
5. Activating the adjustment
6. Informing the tenant of the adjustment
The adjustment run could be first carried
out as a simulation, the list saved as an
update run, and the adjustments directly
activated in the individual step. If neces-
sary, you can reverse an entire adjustment
or individual adjustment records. The
adjustments take into account numerous
country-specific legal requirements.
Percentage Rent
(Sales-Based Rent)
In a retail environment, rental fees are
usually tied to tenants’ inventory turnover.
In addition to negotiating the percentage-
rent contracts, managers of retail prop-
erty must handle information from retail
sales reports and calculate and settle
the resulting rent amounts.
With SAP Real Estate Management, you
can efficiently calculate, settle, and post
rents for retail property based on turn-
over percentages. Settlements auto-
matically post to accounts receivable
functions in your SAP financial account-
ing software.
You can draw up lease agreements for
commercial real estate based on tenant
sales that define contract terms, condi-
tions, and adjustments. The percentage-
rent agreement may be calculated accord-
ing to the value of turnover or number
of sold pieces. The software provides
support for the most complex and flexi-
ble agreements and facilitates complete
transparency and simplified handling.
A lease can contain any combination
of percentage-rent types.
Flexible reporting rules specify which
types of sales must be reported and let
you distinguish actual sales from planned
and statistical sales. The sales rules can
be based on reported inventory turn-
over, a measure of output (such as the
number of customers served), or con-
sumption (such as the number of meals
served).
You can manage minimum and maximum
percentage rent as separate conditions.
Advance payments can be managed in
the same way. You can also run the
settlement based on cumulative settle-
ment values. In cumulative settlement,
the reported sales from the previous
periods are taken into consideration for
each settlement (for example, the first
quarter is settled, the second quarter
is settled, and the sales results of the
first quarter are taken into account).
This helps to level peaks and lows
­during the settlement period.
Sales-based settlement consists of the
following steps:
1. Create a sales-relevant real estate
contract with the appropriate
­percentage-rent conditions.
2. In this contract, define one or more
percentage-rent agreements with
valid reporting and sales rules.
3. Assign the sales rules to conditions.
4. Enter the sales reports either for
individual contracts (single entry)
or as a collective entry for multiple
contracts.
5. Carry out the sales-based rent settle-
ment, calculate the percentage rent,
and post it in your financial accounting
software. Condition amounts can be
adjusted for the following settlement
period.
Tenants must report their sales at regu-
lar intervals using reporting rules in the
contract. One sales report can be used
for calculating any number of conditions
that are dependent on sales. Reporting
rules can contain an unlimited number
of product groups (sales types). You
can handle minimum rent and advance
payments on percentage rent as sepa-
rate conditions. Sales can be entered
electronically via the Internet. Tools are
also available to track entered sales
reports and those that may be missing.
SAP Solution in Detail – SAP Real Estate Management
Cost Recovery
(Service-Charge Settlement)
In an office or retail environment – and
in some countries also in residential
environments – common-area mainte-
nance is regularly recovered from tenants
based on individual contract agreements.
Allocating costs for services, property
taxes, insurance fees, and maintenance
expenses is known as service-charge
settlement, cost recovery for common-
area maintenance, or recovery reconcil-
iation billing. In some countries this pro-
cess is legally defined and binding for
residential property management.
Many lease agreements include regu­
lations about cost recovery for shared-
cost items such as operating costs,
heating expenses, and trash collection.
SAP Real Estate Management helps
you automatically manage, assign, and
collect these service charges or charge-
backs more effectively. You can use
the software to:
• Create a settlement structure consist-
ing of settlement units, chargeback
catalysts, and cost collectors
• Define participation groups to delineate
the relationship between real estate
objects and settlement units
• Define cost recovery exceptions in
the individual leases
• Collect costs from vendor invoices
and internal cost allocation on settle-
ment units and their cost collectors
• Handle service charges monitored by
external settlement companies
• Distribute apportioned costs to ten-
ants for a specific settlement period,
using individual control mechanisms
• Where applicable, apportion costs
based on measurements (such as
fixed values, consumption values, or
percentage shares)
15
• Apportion chargebacks for vacant
units to vacancy cost centers
• Send correspondence to tenants about
the results of individual settlements
that result in a debit or credit note
• Execute all related postings in the
financials software
The software can also help you settle
all service charges for real estate con-
tracts and rental objects. This includes
the internal settlement of costs and the
settlement monitored by external settle-
ment companies – for instance, operat-
ing costs or heating expenses. You can
distribute apportionable costs to tenants
for a particular settlement period using
individual control mechanisms. Key
features include:
• Settlement of contracts with multiple
objects
• Settlement to rental objects and
contracts
• Settlement in individual steps, with
the option of continuing at the end
of any step at a later time
• Extensive simulation function with
reports
• Storing of results without posting
• Alternative measurements for differ-
ent apportionments during simulation
– for example, in case meter readings
are not yet available
• Settlements of special agreements
between tenant and landlord
You can use cost recovery to distribute
apportionable costs to tenants for a
particular settlement period, using indi-
vidual control mechanisms that include:
• Categorization of service charges
incurred (using the service-charge key)
• Time-dependent apportioning of
costs based either on measurements
(such as fixed values, consumption
16 SAP Solution in Detail – SAP Real Estate Management
values, percentage shares, and equal
shares) or on conditions in the contract
• Time-dependent settlement participa-
tion of usage objects (such as sites,
buildings, pieces of land, or rental
objects) with the ability to exclude
individual rental objects when assign-
ing higher-level usage objects
• Clearing of costs that are not appor-
tionable to the tenant (in case there
is a percentage landlord share, a
­definition of maximum costs, or
­settlement of nonapportionable
­service charges)
• Apportionment of vacancy costs to
the tenant
• Integration of external settlement
results
A service-charge key defines which
cost can be apportioned to tenants and
which method is used to apportion the
costs incurred by measurement (such
as space size or number of people).
Account assignment of service charges
is made to the respective settlement
units or master settlement units in your
financial accounting software when
posting vendor invoices. The settlement
amount is transferred automatically to
the correct settlement period by means
of the defined settlement reference date.
Cost recovery functions help you to:
• Calculate total costs for the settlement
period for each service-charge key
• Apportion costs to the relevant
­contracts or rental objects
• Determine advance payments by
­individual tenants
• Calculate and post settlement results
to tenant accounts
• Adjust operating cost advance pay-
ments for the following settlement
period
When adjusting advance payments, you
can account for factors such as percent-
age surcharge and maximum costs.
Following the settlement run, you can
automatically adjust advance payments
and flat rates for service charges accord-
ing to the higher or lower consumption
that was determined in the settlement
result. The software supports automatic
data carrier exchange for the transfer
of the required data to the settlement
company.
Third-Party Management
Real estate organizations that operate
properties owned by others have unique
challenges. SAP Real Estate Manage-
ment can increase the efficiency of
third-party management to make these
properties profitable contributors to your
bottom line.
Before managing a property, the real
estate manager must receive a legal
mandate from the property owner. Using
SAP Real Estate Management, you can
create and store mandates by individual
owners and associate the mandate with
the real estate and processes to which
they apply. You can create separate
financial statements for each mandate
and maintain separate assets for all
third-party properties. The software
also supports third-party management
specific to condominium owner associ-
ations (COAs).
With SAP Real Estate Management,
you can handle a variety of third-party
management tasks related to:
• Real estate data
– Represent properties that belong
to other owners
– Map relationships between manag-
ers and owners
– Map relationships between COAs
and individual condominium owners
• Mandates
– Maintain separate assets for owners
and managers, creating distinct
financial statements for each
– Provide accounting functions for
owners and COAs
– Manage bank accounts of owners
and COAs
– Settle COA costs and revenues
for COA members
– Perform chargebacks for tenants
who lease condominiums from
owners
– Create annual budgets
– Perform periodic postings for
assessments as well as assess-
ment collection
– Handle special posting procedures
for COAs
– Manage financial transactions with
tenants using a COA bank account
– Calculate special assessments
• Reporting and correspondence
– Create financial statements for
individual owners or the entire
COA
– Create account statements for
owners
– Report on accounts and items
– Perform COA settlement
– Handle chargebacks for tenants
who lease condominiums from
owners
– Create an overall annual budget
for a COA, with individual annual
budgets for each condominium
Each mandate that is granted by an
owner has its own dependent real The SAP® Real Estate Management
estate objects and processes. These application provides a dedicated
are represented in the software by localization strategy. Examples of
a separate company code for each country-specific support include:
mandate. The mandate company code • Land management (Germany)
provides the basis for separating the • Input tax distribution and correction
assets of the owner and the manager items (Germany)
and supports the creation of separate • Extended withholding tax (Portugal
financial statements. and Spain)
• Rent adjustments (Portugal and
The rental and management of an Switzerland)
object on behalf of a third party is • Property tax (Czech Republic, Italy,
­provided upon the owner’s request. and Portugal)
The service can include anything from • Stamp tax (Italy and Portugal)
basic management to looking after the • Quarter days (United Kingdom)
entire rental process. The fees paid to • Tax jurisdiction code (United
the manager by the owner depend on States)
the services provided and are calculated • Straight-lining of rents according
using flexible fee calculation methods. to Financial Accounting Standards
Management fees can be periodic or Board statement 13 (United States)
event driven and can be based, for
example, on the number of objects
being managed, the total amount of
area managed, an object status, or an
event such as the notice for a rental
contract.
Legal Compliance
For maximum efficiency and optimized
business value, companies with global
property portfolios must manage their
real estate as a unified asset across all
political and geographic boundaries.
However, each property must also be
managed according to local regulations.
SAP Real Estate Management covers a
wide variety of country-specific require-
ments with respect to withholding taxes,
property taxes, and rent escalations. It
can also handle transactions in multiple
currencies and other global issues.
SAP Solution in Detail – SAP Real Estate Management 17
Corporate Real Estate Management
Supporting Core Business Goals
Corporate real estate managers – includ-
ing managers of offices, branches, and
other corporate work spaces – help a
core business achieve goals such as
growth, cost reduction, and a produc-
tive environment for employees.
SAP Real Estate Management supports
these efforts with functions for such key
activities as space management, move
management, and room reservation that
you can integrate with existing tools for
CAD visualization to:
• Assign and move employees to
­specific spaces
• Allocate costs for using work spaces
and meeting rooms to the relevant
organizational units within your
company
• Handle room and service reservations
for one-time and recurring meetings
• Book services such as catering
Space and Move Management
As the structures and business strat­
egies of your enterprise change, it is
­critical that you organize employee work-
places quickly and flexibly. Increased
insight into space demand and utilization
can help you make better investment
decisions about, the leasing of additional
space and space usage. By automating
and streamlining the assignment of
employees to various spaces and their
moves from one space to another, you
can also save time and overhead costs.
Visualization via CAD integration can
provide enhanced analytical insight and
improve collaboration among engineers,
real estate managers, and the heads of
different lines of business.
18 SAP Solution in Detail – SAP Real Estate Management
Rooms shaded in
blue have capacity for
10 or more employees.
Figure 5: SAP® Real Estate Management Helping to Manage Corporate Office Space
SAP Real Estate Management provides analysis, consider future usage based
comprehensive support for analyzing on existing leases, and track space
space demand and availability and allo- ­utilization based on the start and end
cating costs and revenues to appropriate dates of assigned leases.
departments. The software can help you:
• Assign employees to specific spaces You can use the software to help ensure
• Specify which rooms or other real the continuous occupation of rooms and
estate objects can be continuously other real estate objects, record which
occupied employees occupy such space, and plan
• Run occupancy and vacancy reports internal moves of employees from one
• Plan moves of employees from one space to another.
object to another
• Allocate costs for using work spaces You can plan individual moves, big-bang
to the relevant organizational units moves, and team moves.
within your company
The software lets you take advantage of
With SAP Real Estate Management, you CAD applications to analyze utilization
can flexibly structure information about and vacancy rates. You can visualize all
office space and divide space into sites, the spaces and their allocations using the
buildings, wings, floors, and rooms – graphics software of your choice. You
and include architectural details for each can also launch plan representations
of these objects. You can track and ana- directly from SAP Real Estate Manage-
lyze space size, characteristics, usage ment and use the graphical representa-
types, utilization, and vacancies by time tion of relocation variants to support
period. You can also perform historical your relocation planning.
You can allocate costs based on account-
assignment information. You can calcu-
late pricing based on variables such as
Corporate real estate man-
agers – including managers
of offices, branches, and
other corporate work
­spaces – help a core
­business achieve goals
such as growth, cost
­reduction, and a productive
environment for employees.
meeting locations and duration – via
measurement or capacity – and use
calculation rules such as fixed price per
month or price per occupancy.
Room Reservation
Many companies waste administrative
time and effort looking for available
space, specific equipment, or additional
services when reserving rooms for
meetings and other uses. They may
also lack full transparency for the costs
involved in reserving space or may use
available space inefficiently.
SAP Real Estate Management can sim-
plify and optimize the organization of
meetings – both one-time or recurring –
and improve meeting cost transparency.
It can help you make better use of your
meeting rooms, sports facilities, or lec-
ture rooms – while reducing processing
costs and employees stay within certain
cost limitations. In addition, you can
book and bill for services – such as
lunch, additional chairs, or audio-visual
equipment. The software integrates
with your controlling application to help
you allocate the costs for these services
to the appropriate departments.
With SAP Real Estate Management,
you can:
• Represent real estate objects with
master data of architectural objects
• Generate reservation objects from
architectural objects
• Search for and reserve reservation
objects based on specific criteria and
availability
• Bill for room costs based on room
reservations
For room reservation functionality,
SAP also supports services within
a service-oriented architecture
(SOA). These services can be used
to build employee self-service func-
tionality by connecting the SAP® Real
Estate Management application to a
working environment that employees
are most familiar with, such as a
company’s intranet or portal.
• Bill the costs of room reservations to
internal users and external parties
• Create a graphical representation of
the meeting location
• Confirm any additional services and
equipment that may be required
The software automatically determines
objects for account assignment using
existing data, such as HR master data
for assigned employees. You can dis-
tribute costs to more than one account-
assignment object and allocate costs
during the periodic posting run. You may
create external reservations while post-
ing outline agreements and allocate
costs for catering and other services.
SOA is a blueprint for an adaptable,
flexible, and open IT architecture for
developing services-based, enterprise-
scale business solutions. With the
SAP NetWeaver® technology plat-
form as a technical foundation, SOA
moves IT architectures to higher levels
of adaptability – and moves compa-
nies closer to the vision of real-time
enterprises by elevating Web services
to an enterprise level.
Facilities Management
Maintaining the Value of Your Portfolio
Professionally executed facilities man-
agement is essential for maintaining
value in real estate portfolios. The large
variety of related tasks and the technical
complexity of real estate – with its differ-
ent forms of construction, interior work,
and building systems – require the care-
ful coordination and control of facilities
management processes.
Through integration with software for
project systems and enterprise asset
management from SAP, SAP Real Estate
Management can help you manage
­services, maintenance, and repairs for
your buildings and plan and oversee all
related renovations and improvements.
The software can help you handle noti-
fications for unscheduled maintenance
as well as scheduled maintenance work,
service requests, and framework agree-
ments for facilities, services, and mate-
rials that you may have with external
providers.
A wide range of functions for construc-
tion, modern­ization and refurbishment,
maintenance and repair, and service
management help you:
• Conduct scheduled and unscheduled
maintenance on your rental objects
• Display costs in integrated reports
• Assign services to internal and
­external providers
• Monitor modernization and mainte-
nance tasks
• Handle malfunctions and problems
reported via phone
• Prepare and procure goods and
external services
• Manage available spaces
20 SAP Solution in Detail – SAP Real Estate Management
• Maintain spaces and rooms as
­geographical representations with
CAD or computer-aided facility
­management systems
The software can help you create or
assign notifications for functional
locations to document an inspection
or a technical malfunction in a location
or equipment. You can also create or
assign orders for functional locations
that define the tasks you want to per-
form and who should perform them.
The software lets you determine when
to generate scheduled maintenance
orders and create nonscheduled activi-
ties manually. Integration with human
resources software from SAP lets you
assign personnel resources to specific
tasks. You can also generate purchase
requisitions for orders that involve
external service providers.
With SAP Real Estate Management, you
can subsequently post invoices from
external service providers or track the
maintenance and service work of inter-
nal teams. You can settle maintenance
orders to real estate objects (such as
contracts, settlement units, or usage
objects) or capitalize in asset account-
ing. You can also charge tenants not
covered by rental agreements.
You can assign equipment such as fur-
niture or fire extinguishers to specific
functional locations. Classification char-
acteristics describe the details of func-
tional locations and equipment such as
the length, width, and height of a room,
the construction year of a fixed asset,
or the acquisition costs.
By providing full facilities life-cycle man-
agement functionality, SAP Real Estate
Management supports all processes
related to building operations, ranging
from construction, modernization and
refurbishment, maintenance, and repair
to various kinds of service management.
Construction
SAP Real Estate Management supports
a full range of processes for building
construction, including the following:
Planning. The software lets you seg-
ment projects into elements or service
catalogs and structure the project
schedules using linked processes.
You determine the required resources
(materials, persons, or services) and
plan costs using the structure plans
that reflect country-specific standards,
such as German DIN276. You can
derive project scheduling from the
structure plans and determine project
milestones.
Budgeting. You can plan budgets for
project structure plans and automatically
reconcile them with corporate invest-
ment budgets. You can also set budget
availability checks.
Controlling. Support for milestone-trend
analysis shows whether your project is
on time and within budget.
Inviting bids. You can collect prerequi-
sites and specifications and create ser-
vice catalogs related to your project
plan. You can list restrictions related to
size, delivery contents, level of quality,
schedule, and offer validity.
Awarding contracts. You can use the
software to manage contracts with ser-
vice providers and compare them with
original offers. You can make final calcu-
lations of resources, costs, and revenues.
You can then send work packages elec-
tronically, provide local confirmations,
and integrate this information into your
overall project plan.
Invoicing. The software provides
invoice verifications for service catalogs
or contracts and lets you handle security
deposits through your financial account-
ing application.
Managing cash. The software integrates
your treasury functions with electronic
banking, customer relationship man-
agement, and financial processes to
improve liquidity, maximize yields on
financial assets, and simplify multicur-
rency management.
Integration with project and portfolio
management software from SAP lets
you:
• Create projects based on templates
• Design a WBS for cost planning,
budget ­controls, and extensive
reporting
• Link WBS elements to real estate
master data and contracts
• Integrate work orders, material
usage, and all other work details
• Integrate resourcing with procure-
ment functions
• Track scheduling
• Collaborate with third parties
• Monitor and analyze construction
status
New tenant wants Order for modern­ External service is
newly painted rooms ization project is requested
­created Paint work has been
done and needs to
be settled
Costs are reviewed Costs are settled to Work is confirmed
within a report a work breakdown
structure element
Order is completed
and order settlement
is created
Figure 6: Managing the Entire Modernization Life Cycle
Modernization and Refurbishment • Planning work items and related
resources
At some point your properties will need • Planning project milestones
a face-lift. SAP Real Estate Management • Planning and budgeting project costs
can help you make the most of these • Creating purchase orders for materials
projects by providing robust support for and services
planning and monitoring your modern- • Settling costs for WBS elements
ization and refurbishment projects. Inte- • Monitoring completion rates and
gration with project and portfolio man- costs
agement software from SAP and the • Capitalizing project costs to asset in
Collaboration Projects application lets asset accounting
you gather and plan, manage, and mon- • Requesting chargebacks of costs
itor modernization projects through the from tenants
entire project life cycle (see Figure 6). • Adjusting rental fees in leases due
Integration with asset management and to space improvements
purchasing applications streamlines work
and purchase orders as well as order
planning, confirmation, and settlement.
You can use the software to manage
bid invitations, contract awards, invoic-
ing, and the procurement of external
services. There is also support for:
• Creating and organizing projects into
WBS elements
SAP Solution in Detail – SAP Real Estate Management 21
 Maintenance, Repair, and Service
Management
Handling maintenance, repairs, and ser-
vices for the buildings in your portfolio
is a critical part of effective real estate
management. The proper preparation
and execution of both planned and
unplanned projects requires that you
be able to assign the appropriate inter-
nal resources and manage framework
agreements with external service pro-
viders. In addition, you must be able to:
• Gather and define all tenant requests
for improvements or repairs
• Invite bids from building services
providers
• Negotiate and conclude framework
agreements
• Request services contained in the
framework agreement
• Monitor the actual work or services
• Settle orders and allocate costs to
tenants or property
SAP Real Estate Management can help
you automate and streamline such tasks
for your own properties – as well as those
of your customers – over the entire
maintenance, repair, or service process
(see Figure 7). Through integration
with the SAP ERP Corporate Services
solution, you can directly ­analyze costs
that arise from these activities.
Manage maintenance plans and
requests. You can display building
maintenance plans using descriptions
of required inspections and other tasks
for maintenance objects. You can define
dates and actions and automatically
generate and group together mainte-
nance requests from both malfunction
reports and scheduled maintenance
plans.
22 SAP Solution in Detail – SAP Real Estate Management
Plan scheduling and resources. You
can use bills of materials or task lists to
schedule maintenance plans and auto-
matically plan for required materials and
personnel.
Report malfunctions. You can report
malfunctions or service requests from
users or tenants related to individual
real estate objects – either online or
via handheld computing devices.
Monitor costs and dates. You can
gather and display maintenance costs
and keep track of crucial dates and
deadlines.
Resolve customer issues. Customer
interaction centers provide service and
support by helping agents manage and
fulfill commitments with efficient service
planning and execution. You can resolve
customer issues quickly by connecting
the entire service process – from initial
customer contact to final resolution and
financial settlement.
Create framework agreements. You
can create agreements regarding
­standardized service and material
deliveries and their negotiated price by
vendor. The software supports the
management of framework agreements
with external service providers and the
assignment of such companies to pur-
chase orders.
Procure external services. Standard
procurement functions help you pur-
chase regular facilities-management
services – such as caretaking, clean-
ing, cafeteria, security, gardening, and
internal mail delivery.
 and building location. After you enter
Tenant discovers Tenant enters Facility manager calls the receipt of goods or confirm com-
­defective HVAC ­notification by up the daily workload pleted services, the software automati-
­telephone and finds this notifi- cally charges the costs for these goods
Building

cation waiting with the and services to the relevant real estate
status “outstanding”
object.

In addition, you can:

Facility manager • Create functional locations (such as
­receives notification
All work order costs that HVAC is not
rooms) and assign equipment (such
are settled against working properly; as desks and computers)
the building ­assigns internal and • Create maintenance plans
external resources, • Create and execute work orders
runs warranty check using internal or external resources
• Receive confirmations from service
teams
Tenant receives Facility manager Work order is as-
­e-mail notification, ­enters completion signed because the • Post and pay vendor invoices for time
and outside costs ­repairs require third- and material
are entered on the Facility manager party involvement • Receive costs via internal cost
work order sends note to tenant allocation
that work is done Repairs are completed
• Settle service and maintenance costs
with tenants
Figure 7: Managing the Entire Maintenance, Repair, and Service Life Cycle

Manage fire safety. The software repre-
sents technical fire prevention objects
such as fire extinguishers and fire doors
as equipment on functional locations
and links them directly to your real estate
objects. It also helps you determine and
monitor inspection dates in maintenance
plans. Integration with computer-aided
design and facility management systems
supports the mapping of fire escape
routes and the location of fire safety
objects.
With SAP Real Estate Management,
you can request services online, by
management or tenants, or automati-
cally via your maintenance and service
plans. Commitments are displayed
directly with the real estate object. You
can define required services or materi-
als for individual real estate objects or
usage types, along with service levels
and standards. You can also define the
suppliers for materials and services
according to the specific service type

SAP Solution in Detail – SAP Real Estate Management 23

Support Processes
Completing Your Solution
Control of your property portfolio will
be more effective if all the tools you
need are available on a single platform.
SAP Real Estate Management provides
robust functionality for property support
processes such as the management of
records, documents, business data, and
workflows. Integration with SAP ERP
provides additional functionality and
tools of a mature ERP application. Inte-
gration with accounting and controlling
software – as well as with the SAP
industry solutions for public services
and a variety of other tools – provides
the support you need to:
• Plan and execute cost and revenue
postings – including allocations
and settlements for profit and cost
centers
• Execute postings on general-ledger
accounts
• Post expenditures and earnings on
profit-and-loss accounts
• Create open items for customer and
vendor accounts
• Invoice open items for accounts
receivable
• Handle payments, collections, dun-
ning, disputes, installments, and
write-offs
• Create correspondence and organize
incoming and outgoing documents
into folders
• Incorporate industry- and customer-
specific functions
You get a complete real estate manage-
ment solution that addresses such key
business areas as:
24 SAP Solution in Detail – SAP Real Estate Management
Financial accounting – to create all
required financial statements
Controlling – to provide a planning and
control instrument for all value flows.
Controlling functions also support gen-
eral cost-accounting procedures, from
absorption costing to activity-based
costing.
Profit center accounting – to support
internal control functions and profitability
analyses
Asset accounting – to value fixed assets
for accounting purposes
Document management and optical
archiving – to provide overviews of
all documents and correspondence
associated with business processes
Accounting
Integration with your accounting soft-
ware makes lease administration smooth
and efficient and provides support for
the following accounting activities:
Periodic postings. Real estate partners,
such as tenants or landlords, are repre-
sented as customers or vendors. The
periodic posting on contracts either
posts or reverses receivables or pay-
ables to the respective contract partner
based on the condition amounts defined
for each contract. You can manage
accounts receivables and accounts
payables on an open-item basis. The
periodic posting for vacant rental objects
posts the imputed costs resulting from
the conditions of the rental objects.
One-time postings. You can manually
pass on receivables that are not auto-
matically covered by the conditions
entered in the contract but must be
assigned to the tenant. You can assign
invoice amounts directly to the individual
contracts, debit them to the customer,
and post credit memos in the same way.
The data-entry screens for one-time
postings are user friendly and tailored
to the needs of real estate managers.
Payment transactions. The software
supports all regular payment procedures
such as automatic debit, checks, and
bank transfers. It also supports addi-
tional and country-specific functions
for data exchange with certain banks
and electronic account statements and
supports open-item management.
Dunning. The software provides a
­flexible procedure for creating dunning
notices. It defines dunning levels with
the required correspondence and calcu-
lates dunning fees or interest on arrears
as required.
Input tax opting. You can automatically
calculate portions of deductible and
nondeductible input taxes based on the
determined option rate that specifies the
basis for dividing input tax into deductible
and nondeductible tax.
Accrual and deferral. You can assign
planned costs and revenue to the rele-
vant accounting periods and make accru-
als and deferrals for actual postings to
these periods. Accrual functionality
helps you calculate and post accruals
and deferrals. If you execute an accrual
or deferral, the software automatically
generates the required documents,
transfers them to accounting, and
then provides corresponding financial
documents.
evaluate the costs and revenues related
to your properties. By automatically
assigning costs and revenues to your
real estate objects, the software can
eliminate redundant data entry.

Appreciation and depreciation. The
software helps you manage appreciation
from modernization and refurbishment
projects that increases the value of
your real estate. You can determine
depreciation representing a loss of
property value according to accounting
rules described in trade and fiscal law.
Additional real estate–specific function-
ality lets you:
• Use contract numbers for incoming
payment transactions
• Display tenant accounts from within
rental contracts
• Import and process account
statements
• Specify installment payments for open
items in tenant accounts (the software
can divide payments into several
equal installments from within rental
contracts)
• Write off open items
• Summarize records of each contract’s
payment transactions to reduce the
posting volume
Controlling
The effective management of controlling
processes is critical for the profitable
planning, oversight, and evaluation of
real estate. The integration of SAP Real
Estate Management with controlling
functions in the SAP ERP Financials
solution lets you plan, post, settle, and
You get support for planning costs and
revenues for individual sites and leases
– as well as support for cost assessment,
the settlement of property costs and
revenues, and the reconciliation of costs
and revenues to different profit centers.
The software can help you estimate
future costs, activity input, revenue,
and statistical key figures on both prop-
erties and leases. You can also perform
actual postings for manual follow-up
postings of costs, revenue, and line
items – and use all standard controlling
instruments such as internal activity
allocation, the controlling of settlements
and assessments, distributions, periodic
repostings, and the transfer of costs
and revenues into statistical key figures.
The software provides additional control-
ling support in the following key areas:
Cost and revenue planning. You can
manually plan costs and revenues on
real estate objects, a function similar to
that for cost centers. You can perform
cost planning, activity-input planning,
revenue planning, and statistical key-
figure planning for both usage objects
and real estate contracts. You can use
planning aids for costs and revenues
on real estate objects to generate or
calculate planning values from planned
or posted data. This means, for example,
that you can copy values posted on real
estate objects from actual to planned
SAP Real Estate Man-
agement can make
costs visible and con-
trollable for any type of
property management.
You gain further control
of expenses by auto-
mating transactions and
optimizing maintenance,
repairs, and building
services.
or planned to planned and from cash-
flow records for real estate contracts
to planned. Prognosis tools help you
forecast future rent from the conditions
and adjustment rules in contracts and
comparison reports to determine differ-
ences between month-to-month total
rent revenue. Integration with SAP
NetWeaver BI helps you compare
planned costs and revenues with actual
data posted to your real estate objects.

SAP Solution in Detail – SAP Real Estate Management 25

Cost and revenues posting. You can
assign cost and revenue postings
directly to real estate objects. You can
evaluate in the object structure the
costs and revenues that the real estate
objects incur – with no additional formal
structures, such as cost or profit centers.
You can use direct-cost assignment to
evaluate costs and revenues of different
characteristics for real estate objects,
such as usage types and regional loca-
tions. You can post lost revenues from
vacancies to defined cost centers as
accrued costs.
Activity allocation. You can allocate,
enter, and make additional settlements
on internal activities in real estate
objects. For example, you can apportion
costs for specific activities to tenants
by determining and posting such costs
to corresponding settlement units and
having the service-charge settlement
account for such costs.
Costs settlement. You can settle costs
incurred on real estate objects or use
other account-assignment objects. Real
estate objects can receive costs from
other account-assignment objects –
such as cost centers, orders, or assets.
Settlement rules help you determine
the portion of costs for particular real
estate objects that you can settle with
specific recipients.
Activity-based costing. You can deter-
mine and allocate overhead costs
according to the business processes
that drive such costs and allocate
the costs to your real estate objects
according to various business processes
(such as the creation of new contracts,
rent adjustments, or notices). You can
derive detailed information about the
26 SAP Solution in Detail – SAP Real Estate Management
overhead costs that your real estate
objects incur for each business process
for increased cost transparency. You
can attain visibility to identify options
for optimizing business processes
among several cost centers. You
can use the rules within the process
template to determine the quantity of
resources and cost drivers.
Controlling tools are available for both
real estate objects and contracts. The
software allows manual planning of
costs, activity inputs, and revenues
and lets you compare those values
with actual values. With cash flow to
planned, you have the option of rolling
up planned values into a superior object
(such as transferring cash-flow data
from building contracts to the building
as planned costs). In addition, you can
enter a percentage rate of increase
when you copy values (such as cash
flow to the following year, plus 0.5%).
Documents and Correspondence
Real estate organizations must commu-
nicate with a wide variety of business
partners, tenants, and vendors. You can
use SAP Real Estate Management to
generate the many documents – includ-
ing letters, e-mail messages, and faxes
– that are part of this communication.
You may create correspondence for
wide distribution as well as individual
letters or documents. There is support
for event-related correspondence
(required for specific, individually created
business transactions, such as address
changes) as well as for periodic corre-
spondence (required for regularly occur-
ring and widely distributed business
transactions, such as invoices).
SAP records-management function­
ality – to structure default document
folders per object type and handle
approval circulars
SAP document-management function-
ality – to manage building leases and
other documents
SAP Interactive Forms software by
Adobe and SAP smart-form function-
ality – to create mass documents
based on master data, contracts, or
mass-procedure data (such as rent
escalations)
Integration with Microsoft Word – to
create lease agreements and other indi-
vidual documents using existing data
Integration with Microsoft Excel – to
facilitate the controlling planning process
SAP workflow – to facilitate automated
communication between users for busi-
ness processes, such as when getting
an approval for creating a contract
You can create online and offline inter-
active forms in Adobe PDF thanks to
SAP Interactive Forms software (for both
wide distribution and individual corre-
spondence) and in word-processing
applications such as Microsoft Word
and Lotus Word Pro (for single docu-
ments). You can use predefined tem-
plates that extract data from SAP Real
Estate Management to create documents
of either correspondence type. You can
then store and track your documents
and link them to the relevant real estate
properties.

You can use PDF-based sample forms
in SAP Interactive Forms to create gen-
eral letters and data summaries for each
property asset. For leases, you can
use preconfigured templates for general
letters, data summaries, contract forms,
contract account sheets, cost recoveries,
percentage-rent settlements, adjust-
ments, notices, and notice confirmations
– or you can create your own templates.
When you use PDF-based forms, you
get support for:
• High-performance printing for wide
distribution with optional document
archiving
• Automatic insertion of relevant prop-
erty data from the software into the
correspondence, as well as insertion
of relevant customer data
• Creation of correspondence custom-
ized for specific business partners
Interactive forms support document
and process management. You can
use interactive forms internally and to
exchange information, such as invoic-
es, between companies. Where appli-
cable, you can employ digital signature
technology.
Document and Records Management
Real estate businesses must access,
store, and manage a large and diverse
assortment of documents to support
their ongoing operations. These docu-
ments must be readily available, filed
for easy access, or archived as part
of long-term record-keeping efforts
(see Figure 8).
SAP Real Estate Management can help
you access and use such documents
efficiently through integration with the
SAP Records Management, SAP Easy
Document Management, and SAP
Document Builder applications. This
powerful integration lets you organize,
track, and manage your portfolio-related
documents as your real estate portfolios
grow. It can also help you link to optical
archiving solutions.
Integration with SAP Records Manage-
ment can help you:
• Create and manage an electronic
record of documents that apply to
individual real estate objects
• Define a default structure of records
using a lease document structure and
other templates
• Edit and search for records
• Initiate workflow-controlled processes
– such as requesting approvals for
lease signatures – from the records
themselves
SAP Solution in Detail – SAP Real Estate Management
You can create a master property record
that describes each real estate object
and create or attach related documents
– such as construction designs, expert
evaluations, or tenant correspondence.
When processing activities related to
a specific object, you can display the
relevant documents directly from the
data that describes the property asset.
To organize the supporting documents
more efficiently, you can specify a folder
structure to reflect storage sites for
­different types of documents. For
example, you could design a folder
for leases that could include sections
for leases, cost-recovery notes, and
lease escalations.
Integration with SAP Records Manage-
ment and SAP Document Builder can
help you manage the documents involved
in the lease administration process.
You can use the software to classify
documents such as portfolio summa-
ries, letters, contract forms, presenta-
tions, structural drawings, and photos.
You can then assign those documents
to various real estate objects – such as
rental spaces, floors of buildings, or a
room – to increase processing efficiency.
When you are conducting transactions
related to specific properties or spaces,
you can quickly display the relevant
documents for detailed reference.
Much of the data you want to use with
SAP Real Estate Management may be
stored as scanned documents in optical
archives and accessed as you need
them. Tight integration with other SAP
software lets you access documents
used for:
27

Scanned
documents
Document
information
records
Notes
Office
documents
Web content
Interactive forms
Process
information
Figure 8: Examples of Digital Records
• Financial accounting
• Controlling
• Profit-center accounting
• Asset accounting
• Enterprise asset management and
customer service
• Materials management
• Project and portfolio management
You can integrate other arbitrary objects,
including those from non-SAP software
systems. The integration of business
workflows lets you use records as
starting points for efficient process
control. Elements can originate either
from the local or remote SAP software
as well as from non-SAP software.
Other Tools
You may require nontraditional business
practices or approaches to make your
real estate operations profitable and
efficient. Most business software, how-
ever, cannot accommodate changes to
or deviation from traditional practices.
28 SAP Solution in Detail – SAP Real Estate Management
Fax and
e-mail
SAP business
documents
(such as leases,
buildings, rental
objects, and
tenant or
Digital Records landlord
master data)
Transactions
Reports
Other records
or files
In the rare cases when you can modify
the software, such changes can make
upgrades more complex. When soft-
ware constricts your operations, your
ability to create competitive differentia-
tion from others in your market may be
compromised as well.
You can make modifications to SAP
Real Estate Management to suit your
business requirements – without cus-
tomizing the actual application. SAP
provides standard tools – including
business add-ins, a business data tool
set, and business application program-
ming interfaces – to help you adapt the
application to your unique requirements.
Business Add-Ins
SAP-designed business add-ins help
you deploy additional functions that are
not included in the standard software
without compromising future upward
compatibility of the software during a
subsequent upgrade.
Definition functionality lets application
programmers define exit points in the
source code through which partners or
customers can attach additional coding
without having to modify the original
object.
Implementation functionality lets
users customize the logic they need or
use standard solutions when available. In
both views, SAP software supports a
multilevel system landscape that may
include such levels as SAP code, country-
specific versions, industry solutions,
partner requirements, and customer
versions. You can create business add-in
definitions and implementations at any
level of the software system landscape.
Business Data Tool Set
The business data tool set can help you
maintain and change master data and
simple transaction data for any object.
You can use the tool set to define your
own fields for dialogs to process real
estate contracts or another master data
table within SAP Real Estate Manage-
ment. You can change the screen lay-
outs, screen sequences, or the status
of individual fields. You can also use the
tool set to determine which fields to dis-
play or hide from users, make enhance-
ments to the interface, implement your
own checks, or save additional data in
your own tables.
BAPI Programming Interfaces
You can use BAPI programming inter-
faces to distribute the elements of a
business process across numerous
physically separate systems. These
interfaces provide object-oriented
access to SAP Real Estate Manage-
ment. You can use them to import
or export data to and from graphical
software applications, such as CAD
and GIS software. The interfaces
­support the reusability of specific
­functions and data and third-party
software.
Integration with SAP Industry
Solutions
Every industry has its unique real estate
needs. SAP Real Estate Management
integrates smoothly with all industry-
specific software from SAP.
Integration with the SAP Public Sector
Collection and Disbursement (SAP
PSCD) application, for example, lets
public agencies assign existing contract
accounts to real estate contracts or auto-
matically create new contract accounts
and assign them to the contracts. It is
also possible to assign business part-
ners to real estate contracts and deter-
mine whether postings with SAP PSCD
refer to real estate contracts or contract
objects. SAP PSCD can also help you: Enhancements via business data tool
• Process receivables for real estate set and the BAPI® programming inter-
contracts in separate contract face can relate to the following real
accounts or with other receivables estate business objects:
on shared contract accounts • Sites
• Create connections to account assign- • Pieces of land
ment objects such as contracts, sites, • Buildings
and properties • Rental objects
• Use contract connections or account • Architectural objects
assignment bars for manual transac- • Real estate contracts
tions of accounts receivables and • Settlement units
accounts payables • Participation groups
• Use the posting interface to transfer • Comparative groups
relevant account assignments from
real estate objects to SAP PSCD and
SAP funds management software
Integration with SAP PSCD also helps
you use contract accounts receivable
and accounts payable functionality for
your customer and vendor postings. You
can integrate these functions with SAP
Real Estate Management to unify open-
item accounting in both applications.
29
A Wide Range of Business
­Benefits
Driving Revenue and Growth

By letting companies adapt work space
more quickly to the changing needs of
their core businesses and providing
work space services more effectively,
SAP Real Estate Management can con-
tribute to a company’s top-line growth.
For commercial real estate management,
the application can enhance revenue
and growth by optimizing portfolio value,
reducing risk, and facilitating smarter
buy and sell decisions. This means a
faster return on acquisition and merger
investments and a shorter time-to-benefit
period for construction and redevelop-
ment activities.
SAP Real Estate Management can also
optimize lease administration by reducing
the time and effort involved in handling
recurring procedures, meeting legal
requirements, and elevating tenant
retention rates and related lease reve-
nues. This – plus increased customer
satisfaction and decreased service and
adminis­trative costs – can enhance
bottom-line growth.
For managers in the corporate work-
place, SAP Real Estate Management
provides full transparency into space
utilization and the allocation of costs
and revenues by department.
Find Out More
Companies in 50 countries across all
industries use SAP Real Estate Manage-
ment to optimize real estate life-cycle
management.
SAP Real Estate Management is pow-
ered by the SAP NetWeaver technology
platform. SAP NetWeaver unifies tech-
nology components into a single plat-
form, providing the best way to integrate
all systems running SAP or non-SAP
software. SAP NetWeaver also helps
organizations align their IT and business
strategies.
To find out how you can benefit from
SAP Real Estate Management, visit our
Web site at www.sap.com/realestate.

In addition, SAP Real Estate Manage-

ment can make costs more visible and
controllable for any type of property
management. You gain further control
of expenses by automating business
processes and optimizing maintenance,
repairs, and building services. There
is also support for improved decision
making through the use of automated
reports based on such key performance
indi­cators as vacancies, utilization rates,
costs, and revenues.

30 SAP Solution in Detail – SAP Real Estate Management

Quick facts www.sap.com /contactsap

Summary
The SAP® Real Estate Management application provides greater insight into and control
over all types of property throughout the real estate life cycle. It addresses industry-specific
requirements and integrates fully with financial and logistics software from SAP. The appli-
cation can help real estate managers improve top- and bottom-line growth, optimize lease
administration, and improve decision making.

Business Challenges
• Align the real estate portfolio with enterprise strategies and objectives
• Optimize space utilization, minimize costs, and increase rental income to enhance
revenue
• Gain greater visibility in a global economy that has increased the geographic diversity
of real estate portfolios
• Optimize processes for compliance and risk management

Supported Business Processes and Software Functions

• Portfolio management – Analyze performance, track property details, manage your
­business partners, and handle property acquisition and disposal
• Commercial real estate management – Automate tenant searches, contract offers,
lease administration, rent escalation, and third-party property management
• Corporate real estate management – Optimize space utilization, room reservation and
service ordering, and the planning and execution of employee moves
• Facilities management – Plan property investments, monitor construction and modern-
ization projects, and schedule and execute repair and maintenance work
• Property support – Gain greater control over your records, documents, business data,
and workflows while smoothly integrating lease processes with financial tasks

Business Benefits
• Improve top-line growth by adapting work-space needs more quickly and providing
­work-space services more effectively
• Enhance bottom-line growth by increasing customer satisfaction and decreasing service
and administration costs
• Optimize lease administration by more efficiently handling recurring procedures, meeting
legal requirements, and elevating retention rates and related lease revenues
• Improve decision making by using automated reports based on key performance
indicators
For More Information
Please call your SAP representative, or visit our Web site at www.sap.com/realestate.
50 071 554 (08/12)
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