Leasecake Offers Lease Chatbot and Critical Clause Summaries

Lease and location management proptech company Leasecake, which landed $12 million in Series A funding last year, announced a new product it calls Cakebot. Using large language model AI technology, Cakebot is supposed to help companies better understand real estate leases.

Here is an example the company sent to GlobeSt.com. First, the clause as written:

“Tenant’s financial obligations encompass a proportionate allocation of Common Area Maintenance (CAM) charges, encompassing expenses germane to the administration, maintenance, remediation, and enhancement of communal spaces within the property. CAM charges encompass, though are not limited to, expenses linked to landscaping, parking facility maintenance, security provision, illumination, signage installation, refuse disposal, and property oversight charges. The quantum of Tenant’s CAM contribution shall be determined by deriving the ratio of the leased premises’ rentable area to the aggregate leasable area of the property. Tenant’s CAM disbursements shall be tendered on a monthly basis in advance, and Landlord shall supply an annual reconciliation of the actual CAM expenditures against the precomputed payments. Discrepancies shall be duly adjusted, resulting in corresponding invoicing or crediting of Tenant.”

And here are the points they said the software generated:

• The Tenant is responsible for a share of expenses related to maintaining shared areas (CAM charges).
• These expenses cover things like landscaping, parking lot care, security, lighting, signage, and property management.
• The Tenant’s share is calculated based on the size of their rented space compared to the total property size.
• The Tenant pays their CAM portion monthly in advance.
• Once a year, the Landlord compares actual CAM costs to the estimated payments and adjusts for any differences.
• The Tenant will either receive an invoice for additional payment or a credit if they overpaid.

“The acceleration of generative and conversational AI technologies has reached a point where many commercial real estate challenges can be solved in seconds instead of hours or days,” Dave Schrader, chief product officer of Leasecake, said in prepared remarks. “With Cakebot, customers can now speak directly with their own data in a conversational way, getting not only specific details, but realtime summarizations of lengthy contracts.”

All well and good, and potentially of use. But CRE professionals should keep in mind that any contract, including leases, can be more complicated than a line-by-line reading. One part might affect how another part is read. Language that has a particular interpretation in one state might have another in a different part of the country. The implications and consequences for a business of what an entire document says is significant.