Lease Administration¶

Leases represent a contractual relationship between a property and a tenant. A lease consists of high-level information about the contract, and any financial obligations are detailed within the lease charges.

Credence's lease administration pages allow you to view and manage all leases across your properties. Leases are organized by their current status to help you track active tenants, upcoming leases, and historical data.

Rent Roll¶

The rent roll displays all currently active leases. For a lease to appear in the rent roll, it must meet these criteria:

• Active and Approved - Lease has been reviewed and approved (not drafted, rejected, or terminated)
• In-place - Lease is active as of the specified date
• Associated with selected properties - Lease units belong to your currently selected properties

The rent roll provides a comprehensive view of your current tenant base, including rent amounts, lease terms, and key dates. Use this as your primary reference for understanding current occupancy and revenue.

Future and Draft Leases¶

Leases that haven't started yet or are still in draft status.

Future Leases¶

Approved leases with a start date in the future. These represent committed tenants who haven't moved in yet. Key uses:

• Track upcoming move-ins and prepare units
• Project future occupancy and revenue
• Manage lease commencement timelines

Draft Leases¶

Leases that are being created or negotiated but haven't yet been approved. These leases:

• Do not appear in the rent roll
• Cannot be charged rent
• Can be freely edited or deleted
• Must be approved before becoming active

Use draft status when entering lease details during negotiation, or when you need to review lease information before approving.

Expired Leases¶

Leases that have ended, either by reaching their expiration date or being manually closed. Key uses:

• Alerting you to any missed lease renewals
• Processing final charges or adjustments
• Managing security deposit returns
• Reconciling outstanding receivables
• Preparing units for new tenants

If you turn on Lease expiration in your notification preferences, Credence can place inbox alerts when an active lease is 9, 6, or 3 months from its end date, and when it has recently expired (the expiration day through the following 30 days). Ongoing leases with no end date are not included. A new inbox item appears only when the remaining term moves into the next window (9 months, then 6, then 3, then recently expired), or when the lease gets a new end date.

Configuring a Lease¶

Basic Information¶

• Tenant - Select existing tenant or create new one
• Units - Which space(s) the tenant will occupy
• Dates - Start date, end date, and key milestone dates

Lease Charges¶

Configure recurring charges that will be billed to the tenant:

• Rent - Base rent amount and payment frequency
• CAM - Common area maintenance (service charges)
• Free Rent - Free rent period, handled as a negative rent charge offsetting the base rent amount
• Real Estate Tax
• Insurance
• VAT/Sales Tax
• Security Deposit - One-time deposit charge
• Miscellaneous - Other recurring charges

Each charge type has:

• Amount and payment frequency (monthly, quarterly, annually, etc.)
• Account, which informs how the charge is recorded in the books
• Start and end dates
• Unit assignment
• Tax eligibility

Options¶

Lease options are additional terms in a lease describing actions available to the landlord or tenant. Examples include termination, renewal, expansion, etc.

Indexation¶

Indexation is the process by which contractual lease charges are indexed against a specified pricing index. Once index information is available, the appropriate lease charge can be created based on existing charges and the indexation information specified in the lease:

• Index - The index used as the basis of reference for lease charge increments (e.g. German CPI, Danish NPI).
• Index Date - The next date by which indexation needs to be performed
• Index Month Offset - The number of months prior to the index date from which the indexation rate should be pulled
  • Example: An offset of 4 months means a lease charge being indexed in September will refer to the index’s rate from May
• Index Cadence - The frequency with which the lease charge is indexed (typically annually)
• Index Minimum - The minimum amount for a lease charge to be indexed, overriding the reference index if the relevant value falls below the minimum
• Index Maximum - The maximum amount for a lease charge to be indexed, overriding the reference index if the relevant value falls above the maximum

Lease Abstract¶

A lease abstract is a summarized document containing key lease information. Generate an abstract to:

• Share lease details with stakeholders without providing the full lease document
• Create a standardized summary for reporting or analysis
• Provide quick reference for property management teams

To generate an abstract, you must first configure a Lease Abstract document template. The template controls what information is included and how it's formatted.

Lease Status Management¶

Leases can be moved through different statuses during their lifecycle.

Key Calculations¶

Total RBA (Rentable Building Area)¶

The total square footage (or other area unit) occupied by the lease. If a lease covers multiple units, this is the sum of all unit areas. Parking spaces are excluded.

Annual Rent¶

The total base rent amount the lease generates per year. Calculated by converting the rent charge amount to an annual value based on its payment frequency. All charge types are included in this calculation, including free rent periods and parking.

Rent per Area¶

Annual rent divided by total RBA. Provides a normalized comparison metric. Parking spaces and their revenue are excluded.

Market Rent¶

The estimated current market rate for the space, based on unit-level market leasing assumptions. Used to calculate variance between in-place rent and market conditions. All unit types are included in this calculation, including parking and vacant units. Parking is excuded from the Market Rent per Area calculation.

WALT (Weighted Average Lease Term)¶

The remaining lease term weighted by rent amount. Higher-rent leases contribute more to the WALT calculation. This metric helps assess:

• Revenue stability - Longer WALT means more predictable future income
• Rollover risk - Shorter WALT means more leases expiring soon
• Portfolio positioning for sale or refinancing

Formula: Sum of (remaining term × annual rent) for all leases ÷ total annual rent

Remaining term is the difference between the lease end date and the current date. If the lease has no end date, the tenant's break date is used.

Occupied RBA¶

The total area covered by active leases. Defined as the sum of all occupied unit areas.

Occupancy Rate¶

Percentage of available space that is leased.

Formula: (Total RBA of in-place leases ÷ Total RBA of active units) × 100

Notes¶

• All "per area" calculations exclude parking spaces and their related revenue.

Tips & Best Practices¶

• Configure all relevant charges - Review and validate the type, amount, frequency, dates, and account for each charge
• Use date ranges on charges - Configure charge start/end dates for free rent periods or mid-lease escalations instead of modifying the lease later
• Verify calculations - Review calculated fields like annual rent and rent per area to catch data entry errors
• Keep drafts organized - Move leases out of draft status promptly once they're executed to maintain accurate rent roll data
• Review recently expired - Check the expired leases view regularly to process final charges and security deposits promptly
• Track future leases - Monitor upcoming move-ins to prepare units and ensure timely rent commencement
• Document lease options - Record renewal options and key dates so you can proactively manage lease expirations