Prioritizing Building Lease Renewal Risk

The Challenge

Due to a significant decline in workload the U.S. Postal Service wanted to understand if all 33,000 facilities they owned or leased were still necessary for operations. The Postal Service only had resources to investigate a random 10% sample of leases nearing expiration starting 24-36 months before their expiration date. Elder Research was tasked to build a model to prioritize the optimal 10% for investigation.

The Solution

Elder Research built a predictive model to identify facilities with the greatest impact on operations and cost, determine risk of fraud, predict future facility space requirements, and compare market values to current lease rates. The summarized risk score allowed business analysts to more effectively renegotiate each lease.

The Results

Nationwide, the lease renewal model had a projected return of $99 million over a five year period – an enormous return on investment.

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