Archibus Cloud / Leases / Lease Portfolio / Lease Portfolio Console
Real Estate Portfolio Management / Lease Administration / Lease Portfolio / Lease Portfolio Console
Real Estate Portfolio Management / Cost Administration / Cost Administrator / Lease Cost Profile

Create a Lease Indexing Profile and Generate Indexed Cost Records

To automate lease indexing, you associate a lease with a Lease Indexing Profile. This profile stores the information the application needs to calculate the base rent cost adjustments, such as the specific price index to use and how often to calculate the index change.

Get Started

Before adding a Lease Indexing Profile, you do the following:

• Add the recurring cost record for the lease's base rent using the RENT - BASE RENT cost category. The application fills in the Rent Initial field stored in the Lease Indexing Profile based on the base rent amount entered in this record. See Adding Recurring Costs (Cost Wizard) or Adding Recurring Costs (Lease).

• Define the price index the profile uses. See Defining Indexes. If this has not already been done, you can do so when adding the Lease Indexing Profile for the lease.

Note: Although the application enables you to apply both lease indexing and a yearly factor to the same lease, in general, using both methods is not a recommended best practice. Typically, you would apply one method or the other.

Access the Lease Indexing Profile Form

You work with lease indexing from the Lease Indexing Profile form.

Access the form using these methods:

Lease Portfolio Console (Leases module, Lease Administration application)

1. Select Archibus Cloud / Leases / Lease Portfolio / Lease Portfolio Console or Real Estate Portfolio Management / Lease Administration / Lease Portfolio / Lease Portfolio Console.
2. Set Display Mode to Multi-Tab.
3. Click on a lease to select it. You move to the Details tab (upper row).
4. In the second row of tabs, select the Recurring Costs tab.
5. Click the Cost Profile button. The Lease Cost Profile Details form appears.
6. Select the Lease Index Profile tab.

Cost Administration application

1. Select Real Estate Portfolio Management / Cost Administration / Cost Administrator / Lease Cost Profile.
2. The Lease Cost Profile Details view appears.

Procedure: Enter a Lease Indexing Profile

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

1. Enter the following information for the profile. The application cannot calculate the index adjustment if this information is not entered:

   Lease Code: This field shows the unique identifier for the selected lease.

   Index Costs? Select this check box to enable indexing for the selected lease. This check box can also be selected for a lease when entering its lease information.

   Index Code: Select the price index that will be used to calculate the base rent cost adjustment for the lease. If the index is not in the list, you can add it by clicking Add New on the bottom of the Select Value - Index Code form. See Defining Indexes.

   Indexing Frequency: Select how often you want the application to recalculate the base rent costs using the index.

   Comments: Although optional, you can use the Comments field to record specific language about lease indexing included in the lease agreement.

   Lease Section: Specify the Article / Section in the lease agreement that describes the indexing agreement, if it is available.

   Lease Page Number: Specify the page numbers or page range if provided in the lease Agreement / contract that contains the indexing requirements.

   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.

   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 no indexing value is available, see your Archibus Application Administrator.

   • 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.

   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

Procedure: Generate Indexed Rent Records

Click the Generate Indexed Rent button to generate indexed rent transactions for the lease using the information entered in the Lease Indexing Profile.

The generated records appear in the bottom section of the form. You can export them if necessary.

See also

Lease Indexing Overview