Commercial tenants use the same Create a tenant wizard as residential ones. The difference is how much of step 2 you fill in: commercial leases usually have a rent escalation schedule, renewal options, a pro-rata share of the property and NNN passthroughs. This article covers those parts. For the steps every tenant shares, see Create a residential tenant.

Before you start

Have these lease terms ready:

  • Lease start and end, rent commencement and possession dates
  • The starting monthly rent and how it escalates (for example, 3% every year)
  • The number and length of renewal options, and the notice each needs
  • Security deposit, pro-rata share and premise use
  • Which operating costs the tenant pays (real estate tax, CAM, insurance) and on what basis

Step 1 — Tenant Info

  1. In the sidebar, click Tenants, then click + (Add tenant).
  2. Pick the vacant unit, then enter the Tenant name — usually the business name, for example Northwind Coffee Co. — and the Premise use, for example Restaurant. Premise use appears next to the tenant's name; it is asked only for a unit that is not residential.
  3. Check the Tenant address and Owner address, add any contacts, and click Next.

Step 2 — Lease & Rent

Lease term

Enter Lease start, Lease end, Rent commencement, the Rent due day (1–28) and, optionally, Possession date.

Rent Breakdown

Rent Breakdown holds the rent periods the tenant is created with. It starts empty, and the lease needs at least one base rent period before you can continue. The tenant's monthly rent is the first base period's rent.

Above the table, choose Escalation or Single period. It opens on Escalation for a lease of more than two years and on Single period otherwise. Start and End begin as the rent commencement date and the lease end.

Escalation — rent that rises by a percentage, for example 3% every year:

  1. Enter the Starting rent ($/mo), Escalate by (%) and Every (years). Amounts are kept to the cent.
  2. Click Add N periods. The periods appear in the table under Base rent.

A 3% annual escalation added to the table
Escalate by 3% every year

Single period — one period at one rent: enter Rent ($/mo) and click Add period.

After each add, the form moves on to the next period: Start becomes the day after the last period, and the rent becomes the next step.

Renewal options. Turn the switch from Base rent to Option period, with either Escalation or Single period. Start moves to the day after the last period, End to five years later, and Option number to the next free number. Enter Notify (days ahead) — how long before the option starts the tenant must give notice — and the rent, then add it. Each option gets its own band, for example Option #1 · notify 180 days ahead, and the tenant's Options on the Lease tab (for example 2 × 5yr) are taken from these periods.

Change a period. Edit the dates and rent right in the table, or click the bin to remove the period. To start over, click Clear all in the table's header; the form returns to the lease term. If a period doesn't start the day after the one before it, the row says so — a gap leaves days without rent, an overlap charges them twice. Both are allowed, for example for a free-rent month.

Additional lease terms

This section is open by default; click Hide to collapse it.

  • Security deposit, and whether the deposit is adjustable (Deposit adjustable). With it on, Deposit months sets the deposit from the first rent and keeps it at that many months of rent as the rent rises — see How an adjustable deposit grows.
  • Pro-rata share — the tenant's share of the property. It is prefilled from the unit; change it if the lease says otherwise.
  • Insurance expiration and Liability insurance (whether the lease requires the tenant to carry it).
  • Pass-throughs & taxes — for Real estate tax, CAM and Insurance, choose Off, Base year, Pro rata or Flat rate. Base year and Flat rate need an amount in the Amount / Rate column. See NNN passthroughs.

Additional lease terms and pass-throughs
Additional lease terms

Note

A Sales tax row appears under Pass-throughs & taxes only when the property is subject to sales tax. See Charge sales tax on rent.

Click Next.

Step 3 — Charges

Add recurring charges that aren't part of the base rent, for example a monthly parking fee or an estimated CAM escrow you bill as a fixed amount. Click Add charge and fill in Description, Amount, Occurrence, Category, Start and, if the charge stops, End (blank = open-ended).

Adding a recurring charge in the wizard
Step 3 — Charges

A negative amount is a recurring credit, such as a rent concession. It is added to the tenant's credit balance instead of appearing as a negative line on the invoice.

Steps 4 and 5 — Notifications, portal and review

Turn on the reminders the tenant should get — commercial tenants often use Insurance Expiration and Exercise of Option — and set their portal access. Then review and click Create tenant.

After you create the tenant

Everything you entered can be changed later on the tenant's Lease tab: