Recoveries - Gross Up

Purpose

Gross Up is used during the Recoveries process when variable expenses should be adjusted for occupancy before Reconcile Charges calculates the tenant share.

When a property is not fully occupied, some variable expenses may be lower than expected because fewer tenants are using the property. Gross Up adjusts those variable expenses to a target occupancy rate before the recovery calculation continues.

Example:

Calculation:

Grossed Up Expense = Actual Expense / Actual Occupancy Rate x Target Occupancy Rate
Grossed Up Expense = $80,000 / 80% x 95%
Grossed Up Expense = $95,000

Where Gross Up Is Configured

Gross Up is configured in the recovery setup used by the lease recurring charge.

You can configure it in either place:

• Leases > Recurring Charges > Recovery Settings

• Setup > Templates > Recovery Templates

When a Recovery Template is applied to a recurring charge, confirm that the Gross Up values are present on the recurring charge before running Reconcile Charges.

Gross Up Settings

Gross Up Settings include:

Target Occupancy Rate and Actual Occupancy Rate Override are percentage fields.

If Target Occupancy Rate is blank, Gross Up is not applied.

Required Setup

Before using Gross Up, confirm:

• The recurring charge has a valid Item ID.

• Recovery Settings are complete.

• Recovery From and Recovery To dates are populated.

• Reconcile Charges is enabled.

• Expense categories are configured.

• Expense categories that should be grossed up are marked Variable.

• Expense categories that should not be grossed up are marked Fixed.

• Actual expenses have been pulled or entered for the recovery period.

• Active units have Total Square Footage configured.

• Property setup has the correct Start Date, Stop Date, and occupancy Proration Method.

When Gross Up Applies

SIRE applies Gross Up only when all of these conditions are met:

• Target Occupancy Rate is populated.

• The selected actual occupancy rate is greater than zero.

• The selected actual occupancy rate is lower than Target Occupancy Rate.

• At least one expense category is marked Variable.

The selected actual occupancy rate is:

• Actual Occupancy Rate Override, when populated.

• System-calculated Actual Occupancy Rate, when no override is populated.

If any condition is not met, Gross Up is not applied.

Actual Occupancy Rate

SIRE calculates Actual Occupancy Rate at the property level for the recovery period.

The calculation uses:

• Active units on the property.

• Total Square Footage for each active unit.

• Lease occupancy during the Recovery From and Recovery To dates.

• The property occupancy Start Date and Stop Date settings.

• The property occupancy Proration Method.

Formula:

Actual Occupancy Rate =
sum(Unit Total Square Footage x Occupied Days)
/
sum(Unit Total Square Footage x Total Days)
x 100

SIRE uses the most recent Total Square Footage value effective on or before the Recovery To date.

How Gross Up Is Calculated

For Variable expense categories, SIRE calculates:

Grossed Up Expense =
Actual Expense / Selected Actual Occupancy Rate x Target Occupancy Rate

Fixed expense categories are not grossed up.

Example:

Calculation Sequence

When Gross Up applies, SIRE calculates the recovery in this order:

• Actual Expense

• Grossed Up Expense, for Variable categories only

• Category Cap

• Effective Amount

• Tenant occupancy proration

• Pro-Rata Share

• Tenant Share

• Multiplier, when configured

• Item Cap, when configured

• Previously billed amount

• Reconciliation Charge

Category Cap is applied after Gross Up. This means the cap is compared against the grossed-up expense when Gross Up applies.

Running Reconcile Charges

Go to Tasks > Recoveries > Reconcile Charges.

Complete the required fields:

• Property

• Transaction Date

• GL Posting Date

Select the eligible recovery items, then preview the charges.

A recovery item cannot be selected if Recovery From or Recovery To is missing.

Reviewing The Preview

When Gross Up applies, the Reconcile Charges preview displays a Gross Up Information section with:

• Target Occupancy Rate

• Calculated Actual Occupancy Rate

• Occupancy Rate Override

The expense table also displays Grossed Up Expense.

For Variable expense categories, Grossed Up Expense shows the adjusted amount.

For Fixed expense categories, Grossed Up Expense shows -.

If Gross Up is not applied, the Gross Up Information section and Grossed Up Expense column are not displayed.

PDF Export

The Reconciliation PDF export does not show a separate Grossed Up Expense column.

Instead, the PDF shows Expense Amount as the amount used in the tenant calculation:

Use the on-screen preview to review Gross Up details before posting.

Posting Considerations

After charges are posted:

• SIRE uses the calculated values from the preview.

• Gross Up does not change the raw actual expense.

• Gross Up changes the expense amount used in the recovery calculation.

• Gross Up applies only to Variable expense categories.

• Fixed expense categories continue to use Actual Expense.

• Category Cap is applied after Gross Up.

• Previously billed amounts are subtracted after the recoverable amount is calculated.

Frequently Asked Questions

Where Do I Configure Gross Up?

Configure Gross Up in Leases > Recurring Charges > Recovery Settings or Setup > Templates > Recovery Templates.

What Enables Gross Up?

Target Occupancy Rate enables Gross Up. If Target Occupancy Rate is blank, Gross Up is not applied.

Which Expense Categories Are Grossed Up?

Only expense categories marked Variable are grossed up. Fixed expense categories are not grossed up.

What Happens If Actual Occupancy Is Higher Than Target Occupancy?

Gross Up is not applied when actual occupancy is equal to or higher than Target Occupancy Rate.

When Should I Use Actual Occupancy Rate Override?

Use Actual Occupancy Rate Override when the system-calculated occupancy rate should be replaced for the recovery period.

Why Is Grossed Up Expense Missing From The PDF?

The PDF does not show Grossed Up Expense as a separate column. It shows the amount used for the tenant calculation in the Expense Amount column.

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