Lockbox Administration
The function of a Lockbox Agent is to deposit and disburse Lockbox account funds as dictated by the Lockbox Agreement and requested by Project stakeholders in accordance with the Lockbox Agreement. In many private sector situations, the project owner can reasonably expect the Lockbox Agent to perform with minimal oversight. However, the Air Force Housing Privatization Lockbox Agreements are very complex, often including multiple stages of cash flows and allocations for more than ten accounts. This complexity requires that the Air Force provide additional guidance and oversight to the Lockbox Agents. The Lockbox Administration Tool enables comprehensive oversight of the Lockbox accounts and activities with minimal oversight, while incorporating the complexities of pre and post-development Projects and the Lockbox Agreement.
At transaction closing, a Lockbox Agent Administration Tool is created, which includes a step-by-step analysis of how funds flow through the "Cash Flow Waterfall" in accordance with the Lockbox Agreement. This tool is customized for each base and used to independently verify each Lockbox Account balance for each base on a monthly basis. The tool allows the user to input actual project figures, such as net revenues and actual expenses, while tracking targeted balances and variances based on the approved budget and financial obligations outlined in the Lockbox Agreement.
On a monthly/quarterly basis, the portfolio management team conducts a review of bank statements for each Lockbox account in comparison with the Project Owner Income Statements, Lockbox Cash Flows and Lockbox Agreement requirements. This portfolio-level activity conforms to private-sector standards of practice for the maintenance of a real estate portfolio of assets. The Portfolio Manager is able to identify relevant financial trends, issues, and best practices via the Lockbox Administration activity at the portfolio-level.
