How Marcus & Millichap fixed the irony of a real estate firm with broken lease accounting

There is a particular kind of embarrassment that comes with being a commercial real estate brokerage that cannot keep its own lease accounting in order. Marcus & Millichap, one of the largest CRE investment brokerage firms in North America, had exactly this problem.

Chris Anderson oversees operations across 80+ offices and had been watching the lease accounting process deteriorate as the firm grew. "We advise clients on billions of dollars of real estate transactions," Anderson says. "But internally, our own office leases were managed like it was 2005. Our own broker actually recommended we look at a lease accounting platform. That is how bad it had gotten."

Eighty offices, eighty different processes

Marcus & Millichap's office portfolio is uniform in character - nearly every location is a standard office lease, typically 5 to 10 years, with straightforward escalation clauses and renewal options. On paper, it should have been simple. In practice, it was anything but.

Each regional director managed their own lease relationships. Some maintained meticulous records. Others treated lease documents as something to sign and forget. The accounting team received information in whatever format each region decided to send - spreadsheets, forwarded emails with PDFs, and in one memorable case, a photograph of a lease amendment taken in a parking lot.

"We had 80 offices and 80 different approaches to lease documentation," Anderson says. "The accounting team spent the first week of every quarter just collecting information."

The firm had tried to standardize twice before - once with a shared spreadsheet template, once with a lightweight cloud tool. Both failed because they required regional directors to change behavior, and adoption was spotty.

External auditors had flagged six findings related to lease accounting in the most recent audit. Three involved missing documentation. Two involved calculation errors in right-of-use asset amortization. One involved a lease that had expired 14 months earlier but was still being reported as active on the balance sheet.

A solution that works with the chaos

Anderson's insight was that the fix could not depend on changing how 80 regional directors behaved. It needed to work with whatever information they provided, in whatever format they provided it.

Arvexi's Document Intelligence module was the answer. Anderson set up a simple workflow: regional directors forward lease documents to a dedicated email address. The documents are automatically ingested into Arvexi, parsed, and the extracted terms are routed to the accounting team for review.

"I do not ask the regional directors to fill out forms or use a specific template," Anderson says. "I just ask them to send us the documents. Arvexi figures out the rest."

The implementation took six weeks. Arvexi configured the platform for Marcus & Millichap's entity structure, set up journal entry templates matching the firm's ERP, and built the email ingestion workflow. The team uploaded the existing portfolio in batches, and the Document Intelligence module processed historical documents that had never been properly abstracted.

That process uncovered 11 leases that had been modified without the changes being reflected in accounting records. It also identified the expired lease that auditors had flagged - along with two more that nobody had caught yet.

How the team works now

The daily workflow centers on the review queue. When a new document arrives or an existing lease triggers a critical date alert, it appears with pre-populated terms. The accounting team reviews the extraction, confirms or adjusts, and approves. Journal entries generate automatically.

"We went from spending a full week collecting data to spending a few hours reviewing it," Anderson says. "The quality of work went up because our people are doing analysis, not data entry."

Critical date tracking has been especially valuable. The firm's office leases have staggered renewal dates throughout the year. Previously tracked on a spreadsheet that was updated sporadically, several important deadlines had been missed. Arvexi now alerts both the operations team and the accounting team 90 days before any critical date.

"We almost missed a renewal option on our Chicago headquarters last year," Anderson says. "That would have been a six-figure mistake. The system catches those things automatically now."

The turnaround

Marcus & Millichap's quarterly close dropped from eight days to four. The accounting team reclaimed over 200 hours per quarter that had been consumed by data collection and manual entry. The most recent external audit produced zero lease-related findings, down from six the prior year.

"The auditors actually commented on the improvement," Anderson says. "They said it was the most dramatic turnaround in lease accounting quality they had seen at a client our size."

Anderson has since expanded the platform to include leases for the firm's property management subsidiary, adding another 30 agreements. "The system handled it without breaking stride," he says. "No additional setup, no additional headcount. For a lean operations team managing a growing portfolio, that kind of scalability is not optional. It is survival."