Many CRE professionals will tell you that managing rent escalations that involve diverse real estate holdings can become a time-consuming process. This typically involves juggling a portfolio of leases that include multiple clauses and conditions unique to each property. Without action, rent escalations can become unwieldy. Take control by streamlining rent escalations across your portfolio with lease management software.
The Rent Escalation Cause and Clause
Rent escalation clauses are not unusual in commercial real estate. Rent escalations are typically baked into a contract so that a landlord or property owner is allowed to raise rent if that adjustment is called for in the marketplace. This helps to protect owners from issues such as inflation and true market fluctuations. Rent escalation clauses protect commercial real estate professionals by helping to ensure that rental rates are in line with ever-changing economic conditions.
However, CRE professionals with expanding portfolios realize that tracking these rent escalation clauses can become an unwanted tedium and unnecessary point of failure. Without the proper lease management software in place, you might find that tracking multiple rental agreements can lead to errors, missed opportunities and even compliance risks with ASC 842.
Multiple leases means that there can be different rent escalation schedules and calculation formulas. Without a centralized application that can be accessed and adjusted on multiple platforms, it can become bothersome to monitor and anticipate upcoming rent escalations. Also, failure to implement and properly track those contractual rent increases can lead to legal consequences.
Finding the Right Lease Management Software for Rent Escalations
When it comes to implementing and tracking multiple rent escalation clauses across a well-populated portfolio of assets, your lease management software should be able to execute and monitor the automation of those escalation schedules. A capable solution should then notify lessees and lessors of those upcoming adjustments. Communication is essential when it comes to sustaining tenant occupancy.
Your lease management software should also be able to adapt to various lease types and escalation methods. Access from multiple platforms also means that all pertinent parties will have instant access to these evolving agreements. With the right lease management software on your side, you will be able to reduce the administrative burden of manual entry and calculations.
Rent escalations are not just a part of the business, they are vital when it comes to protecting NOI for your organization and portfolio. However, managing multiple rent escalation clauses can create headaches while also exposing your company to potential mistakes and compliancy issues.
Here at Qaurem, our robust lease management software can do it all. We will show you how to streamline your rent escalations efficiently and in a way that will not be disruptive to your business or tenancy. If you’re looking for a new operating platform for your CRE business and portfolio, contact us today or schedule your free, personalized demo.
