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Real Estate Portfolio Management / Cost Administration / Cost Administrator

Lease Indexing Profile Additional Details

Adding a Lease Indexing Profile enables the application to generate indexed base rent transactions using the price index and indexing frequency specified in the profile. See Adding Lease Indexing Profile.

The lease indexing Profile includes optional and auto-populated fields as described below. You can change the auto-populated fields, if needed, but the default settings fit most situations.

Description of Auto-Populated Fields

The application populates the Lease Indexing Profile with the following:

• Date - Index Starts: By default, this is set to the Date Start of the most recent base rent cost transaction. You can change this, if needed.
• Date - Next Indexing: The application calculates this date as the Date Indexing Starts + the Indexing Frequency. Based on the Indexing Frequency, the application calculates and updates the Date - Next Indexing after each indexing.
• Date - Indexing Ends: After this date, the application will not update base rent costs using indexing. By default, this is set to the Date End for the lease, but you can change this, if needed, to any date when the lease is active. If this field is not filled in, the lease is indexed until the lease's Date End or the recurring cost record's End Date for the ‘RENT-BASE RENT’ cost category, whichever comes first. If either the lease or the initial ‘RENT-BASE RENT’ recurring cost has expired, no indexing will take place.

• Index Initial Value: When you create the profile, the system enters this value using the most recent Index Value found in the ARCHIBUS index table based on the Index Code and Date – Index Start.

  • If the Reset Initial Values? field is set to Yes, the Index Initial Value is updated each time the lease is indexed to the value used for the most recent indexing.

  • If Reset Initial Values? is not selected, then the Index Initial Value remains as the most current indexing value when the profile was created.

  If no indexing value is available, see your ARCHIBUS Application Administrator.

• Rent Initial. The application automatically enters the Rent Initial for the selected lease, using the amount currently entered in the recurring cost record for the Base Rent for the lease. This amount is required for the indexing calculations, as it is the amount that the indexing adjustment is applied to.

  You can set this field to be reset after indexing or not using the Reset Initial Values field.

• Index Initial Value: When you create the profile, the system enters this value using the most recent Index Value found in the ARCHIBUS index table based on the Index Code and Date – Index Start.
  • If the Reset Initial Values? field is set to Yes, the Index Initial Value is updated each time the lease is indexed to the value used for the most recent indexing.
  • If Reset Initial Values? is not selected, then the Index Initial Value remains as the most current indexing value when the profile was created.

    If no indexing value is available, see your ARCHIBUS Application Administrator.

• Rent Initial. The application automatically enters the Rent Initial for the selected lease, using the amount currently entered in the recurring cost record for the Base Rent for the lease. This amount is required for the indexing calculations, as it is the amount that the indexing adjustment is applied to.

  You can set this field to be reset after indexing or not using the Reset Initial Values field.

• Limit Maximum (%): Enter an upper limit for the new rent as a percentage of the initial rent.
  • Example: If the lease agreement specifies that the adjusted base rent cannot increase with more than 3%, then set the Limit Maximum to 103%.
• Limit Minimum (%): Enter a lower limit for the new rent as a percentage of the initial rent.
  • Example: If the lease agreement specifies that the new base rent cannot decrease by more than 5%, then set the Limit Minimum to 95%. This will ensure that the new costs will not go below 95% of the initial costs
  • If the lease agreement specifies that the new base rent cannot decrease more than the initial rent, then set the Limit Minimum to 100%. This will ensure that the new costs will not go below the initial costs.
• Round New Rent To: Enter the nearest number to which the new recurring costs can be rounded. By default, this is set to 2. Examples are: 0= round to 1 (no decimal places); 1 = round to one decimal (0.1); 2 = round to 2 decimals (0.01)
• Reset Initial Values? By default, this is selected.
  • If you select this check box, the Index Initial Value and Rent Initial amounts are updated with the new calculated values after each scheduled indexing is posted. The new amounts will be used the next time there is a rent indexing. This may affect the rent amount after several scheduled rent increases / decreases are performed due to rounding.
  • If you clear the selection form this check box, Index Initial Value and Rent Initial keep the same values they had when the lease indexing profile was created. New rent adjustments are always calculated using the initial amounts, so no rounding discrepancies will occur.

Description of Optional Fields