Understanding Projected Rent Generation

You can use rent projections to review rent increases that are based on tenants' lease terms, estimate future cash flow with different inflation and occupancy factors, or report five-year future rent when doing so is required on financial statements.

Use the Projected Rent Generation program (R15660) to automatically project rent into the future. During the generation, the system:

• Gathers necessary information by reviewing these tables:

  • Lease Master Header table (F1501B) for the time periods that each unit is occupied.

  • Recurring Billings Master table (F1502B) for the rent amounts that are related to occupied units.

  • Area Master table (F1514) and Market/Potential/Renewal Rent Master table (F159071) for units and their related areas.

• Calculates the projected rent, according to whether the unit is occupied or vacant:

  • A unit is occupied when it has a lease attached to it during the term of the projection. The system uses the rent information from recurring billings.

  • For a vacant unit to which no lease is attached on the beginning date of the projection, you can set the Bill Code for Vacant Units processing option (on the Process tab) to control whether the system projects rent for that unit.

    If it does, the system uses the market rent.

  • If the lease of an occupied unit expires before the ending date of the projection, an occupancy gap exists.

    You can set the Renewal processing option (on the Process tab) to control whether the system projects rent for a unit during this time of vacancy. If it does, the system uses the information for the recurring billings from the expired lease.

  • If the system projects rent for a unit during an occupancy gap and a calendar year changes before a new lease resumes, the system increases the rent by the inflation rate that is specified in the Annual Inflation Rate processing option on the Process tab.

• Updates the Account Balances table (F0902).

  The system saves the rent amounts within specific ledgers, with each amount going into the account that is associated with the business unit of the building, and the object and subsidiary of the AAI linked to the bill code.

  Each generation that updates the table clears the ledgers of all the information that is associated with rent projection and replaces it with the newly generated information. The system does track prior rent projections.

• Populates the Account Balances table (F0902) using the appropriate AAI, depending on whether the lease is receivable (RM AAI) or payable (PM AAI).

• Generates a report with the rent projection information.

  Use the Update Account Balances processing option on the Print tab to specify whether the system updates the F0902 table or just generates the report so that you can preview the projection.