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REAL 3500 Argus
terms and problems
| Question | Answer |
|---|---|
| Property Description | Property Name and Address & Property Type (once selected, property type is permanent) |
| Timing | Period of time the subject property is projected to be held (typically 10 years, as the 10-year treasury is typically considered as a benchmark for alternative investment). |
| Property Size | Size of the property. Generally the area of the subject that is leased unless an un-owned portion of the property contributes to expense reimbursements. |
| Inflation Rates | The rate that income and expense items are anticipated to grow. (All categories default to general if left blank. |
| Reimbursement Method | Should be Fiscal using Fiscal inflation. |
| Miscellaneous Revenues | Revenues generated outside of base rent (e.g. storage, parking, concessions). |
| Reimbursable Expenses | Those property level expenses that are reimbursed by the tenant/s (e.g. Common Area Maintenance, Real Estate Taxes and Insurance). |
| Non-Reimbursable Expenses | Those property level expenses that are not reimbursed by the tenant/s (e.g. administrative). |
| Capital Expenditures | Expenses anticipated to be incurred by the property that are scheduled instead of recurring (e.g. roof, parking lot). Reserves for future capital expenditure are typically modeled here. |
| General Vacancy Loss | Current or average market vacancy over a current or historical period (e.g. 5 or 10 years) to be applied to the holding period. **Use percent of potential gross revenue which is applied to all sources of revenue** |
| Credit & Collection Loss | Average anticipated loss of rent payment typically based on credit risk of tenant base (e.g. McDonalds versus Mom & Pop Burgers). **Use percent of potential gross revenue which is applied all sources of revenue** |
| Rent Roll | Input location for tenants that occupy the subject property as of the start date of the holding period. |
| Tenant Name | Name of tenant that that occupies the subject property as of the start date of the holding period. |
| Suite | Suite Number or letter of tenant. |
| Lease Type | Type of space occupied by tenant (e.g. office, retail, industrial) |
| Size | Size of tenant in square feet. |
| Start Date | Date of lease commencement. Enter date in MM/YY, the number of months from the start date of the holding period, or leave blank to default to analysis start date. |
| Term Expire | Date of lease termination. Enter date in MM/YY or the number of years from the start date. |
| Base / Min Rent | Schedule of contract rent for tenant pursuant to tenant lease. Use detail button to enter multiple rent rates for different periods. |
| Unit of Measure | Rate of rent (e.g. per year, per month, per SF). Less than or equal to $500 will default to $ / SF. |
| Rent Changes | Change of rent beyond base rent for corresponding tenant (e.g. Step Rent, Porters Wage, Miscellaneous, Parking) |
| Reimbursements | Method by which corresponding tenant reimburses 'Reimbursable' property level expenses. |
| Types of Reimbursements | None, Net and Base Stop (defined in other cards) |
| None (reimburse) | Tenant has a "full service" gross lease and does not reimburse any property level expenses. |
| Net (reimburse) | Tenant has a net lease and reimburses reimbursable property level expenses on a "Pro-Rata" share basis. |
| Base Stop (reimburse) | Tenant has a "modified" gross lease and reimburses on a pro-rata share basis those reimbursable property level expenses that exceed in aggregate those established in the first year of tenant lease. |
| Rent Abatements | Free rent provided to tenant over a specified term for corresponding tenant. Typically used as a tenant incentive to execute a lease. |
| Leasing Costs | Costs incurred by owner to lease space for corresponding tenant (RR - Tenant Improvements & Leasing Commissions) |
| RR - Tenant Improvements | Cost incurred by owned to improve the tenant space prior to occupancy. |
| Leasing Commissions | Cost of commissions to paid to leasing brokers that participated in the negotiation of the lease. |
| Market Leasing | Leasing assumptions for the future leasing of space subsequent to tenant expiration. Market leasing also applied in "Space absorption". |
| Property Description | input basic property description information, such as timing, area measures, and inflation. *Select from Property Menu* -1- |
| Property Type | CANNOT be altered after hitting ‘OK’. When the property description screen is opened again, this field will be unavailable -1- |
| Property Timing | contains spaces to enter Analysis Start Date*, Reporting Start Date*, and # of Years to Report/End Date* -1- |
| Analysis Start Date | sets the date at which ARGUS calculations will occur, and all entries that begin with a “relative” start date will be relative to this date -1- |
| Reporting Start Date | sets the date at which reports will begin (Property Level Reports, Supporting Schedules, and other time-series reports) *Must fall ON OR AFTER the Analysis Start Date* -1- |
| Area Measures | where you enter the size of the property. At a minimum, enter a size in the Property Size field; create by clicking New enter a category name and size OK -1- |
| Abbreviations for Thousands, Millions, Billions | Thousand = K; Million = M; Billion = B -1- |
| Property Inflation | enter inflation rates for the property here; when a square is left empty, it inflates at general rate; *When entering a percentage that is less than 1%, you must use the decimal format ½% .005* -1- |
| Miscellaneous Revenues | property-level income items not paid by the tenants; include revenue sources such as vending machines, or the rental of roof antennas; operating revenue not paid by the tenants -2- |
| % of EGR | the number in the Amount column will be interpreted as a percentage of the Effective Gross Revenue (EGR or EGI) -2- |
| $ Amount | the number entered in the Amount column will be interpreted as a full payment amount -2- |
| $/Area | the number entered into the Amount column will be multiplied by the area measure selected in the Area column (follows) -2- |
| % of Constant | the number entered into the Amount column will be interpreted as a percentage. Select the appropriate Constant to use for the percentage -2- |
| % of Line | the Percent of Line window allows the revenue to be based on a percentage of other items in the property -2- |
| Reimbursable Expenses | property expenses the landlord will recover; Will be available for reimbursement by the tenants; common RE may include “CAM, Taxes, Insurance, Repairs and Maintenance…etc.” -2- |
| Gross Up For Reimbursement | of tenants available, they’ll pay for all expenses under the Reimbursable Expense window; makes for unhappy tenants -2- |
| Detail Screen | allows one to enter values that starts and stops at specific times, or changes during the analysis period -2- |
| Capital Expenditures | expense that are not considered part of a property’s Net Operating Income; *appear in the Leasing and Capital Costs section of the Cash Flow Report* -2- |
| Property Level Reports | accessed from the Reports Menu, provides ‘high level’ reporting; includes Cash Flows, Debt Information, Property Resale, and Discounted Cash Flows -2- |
| Rent Roll | tenant information input screen; includes registry of tenants -3- |
| Tenant Registry | by clicking the Registry button in Rent Roll, it inserts a tenant into an easily-accessible listing of the major tenants who lease space in the buildings and can be organized for reporting or consolidation purposes. -3- |
| Start Date (rent roll) | where one enters the lease start date as the actual date (mo/yr) or as a month number relative to the analysis start date. Mid-month lease* -3- |
| Mid-Month Lease | in the Options Menu Input “Allow Leases to Start and End on Specific Dates”, this allows dates in the rent roll to be entered in a MM/DD/YY format. -3- |
| Term/Expire (rent roll) | enter the expiration date (mo/yr), or the (whole) number of years in the lease term. There is no difference in calculation between the two methods -3- |
| Reimbursements (rent roll) | used to define how a tenant is to reimburse operating expenses; none, net or base stop -3- |
| Reimbursement “None” | used for full service leases; this selection indicates that the tenant will not pay any portion of Reimbursable Expenses -3- |
| Reimbursement “Net” | used for triple net leases; the selection indicates that the tenant will pay their natural prorate share of all Reimbursable Expenses -3- |
| Reimbursement “Base Stop”: | used for gross leases; this selection will calculate a base year stop for the tenant; is a pro-rata calculation on either a calendar or fiscal year (Prop Infl -> Reimb Method) based upon Reimbursable Expenses in the ear the lease commences. |
| Rent Abatement | the number of months of free rent for the current lease. The number entered is the number of consecutive months starting at the beginning of the lease term. -3- |
| Leasing Costs (Rent Roll) | consist of Tenant Improvements and Leasing Commissions *leasing commission or tenant improvement will never be calculated for any tenant that begins its lease before the Analysis Start Date* -3- |
| Market Leasing Assumptions | controls what happens to the contract lease after it expires and goes to market -3- |
| Market Rent | if the market rent changes during the analysis, or if it is to inflate at a different inflation rate than in the inflation rates screen, click “Detail” under Market Rent in the MLA -3- |
| Upon Expiration (MLA) | provides a number of assumption options that control how the program will blend the MLA numbers—Market*, Renew*, Vacate*, Option*, ReAbsorb*, and Non-Contiguous* -3- |
| Market (UponExp, MLA) | if the tenant’s Upon Expiration field is set to Market, the program will plend the New and Renewal Market Numbers using a Weighted Average, uses the following Formula |
| Renew (UponExp, MLA) | the program will assume 100% renewal. All information in the New Market column will be ignored during the first rollover -3- |
| Vacate (UponExp, MLA) | the program will assume a 100% probability that the tenant will vacate upon expiration. All information in the Renewal Market program will be ignored during the first rollover. -3- |
| Option (UponExp, MLA) | forces a 100% renewal. Select Option only if you know the specific rent and parameters of the optionterm. If Option is selected, it will entirely ignore the MLA, and will insert a new lease line into the Rent Roll -3- |
| ReAbsorb (UponExp, MLA) | all income for that space will disappear after the initial lease term exp. leaves the space avail for another tenant to absorb the space or allows the space to be “reabsorbed” so that the space can be leased out in smaller sections at diff times -3- |
| Non-Contiguous (UponExp, MLA) | this selection allows a single lease to be assigned two or more rental rates, reimbursements, etc. -3- |
| Property Purchase and IRR | after revenues, expenses, and costs for the property have been entered, a purchase price along with a resale calc need to be considered. *Direct Cap Value of Analysis Start is to calculate the P.Price based on the Capitalized Value of the property. -4- |
| Capitalization Period | a 12-month period of income into which t divide the cap rate; Year One,Year Starting in Month __, or First 12 Months -4- |
| Property Resale | where resale assumptions are made, and the program offers several ways to calculate the sale at the end of the analysis -4- |
| Capitalize Net Operating Income (Resale) | this method divides the NOI in the final analysis year by the cap rate; defaults using the NOI used for the resale calculation in the final analysis year; [NOI / Cap Rate = Gross Proceeds from Sale] |
| Apply Rate to Following Year Income (Resale) | use the NOI from the year following the end of the analysis to calculate the final year’s reseal proceeds -4- |
| Calculate Resale for All Year (Resale) | used for reporting purposes. When unchecked, ARGUS will calculate and display resale proceeds in the final year of the analysis only. When checked, ARGUS will calculate and display resale proceeds for each analysis year -4- |
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