Step by Step Guide: Release Version 14.0 - August 21, 2008

StepByStepGuide
Release Version 14.0 | August 21

st
, 2008
ARGUSValuationDCFV14.0 StepByStepGuide
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ARGUSSoftware:ARGUSValuationDCFStepByStepGuide
ThecontentsofthisdocumentareconsideredproprietarybyARGUSSoftware,theinformation
enclosedandanyportionthereofmaynotbeutilizedforanypurposeotherthanthe
considerationofARGUSSoftware.Informationinthisdocumentissubjecttochangewithout
noticeandrepresentsnocommitmentonthepartofARGUSSoftware.
Copyright2008ARGUSSoftware,Inc.Allrightsreserved.
Trademarks
ARGUSSoftwareisatrademarkofARGUSSoftware.Allothertrademarksandregistered
trademarksarepropertyoftheirrespectivecompaniesandshouldbetreatedassuch.
ARGUSValuationDCFwasformerlyknownasARGUS.
Disclaimer
ThismanualhasbeenpreparedforusebyARGUSSoftwarepersonnel,licenseesandcustomers.
ARGUSSoftwarereservestherighttomakechangeswithoutnoticeatanytimetothis
document,andshallnotbeheldlegallyresponsibleforanytypographical,arithmeticandlisting
errors.
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TableofContents

Chapter1
GettingStarted................................................................................................................................7
Objectives....................................................................................................................................7
GettingSupport...........................................................................................................................7
PropertyLibrary..........................................................................................................................8
ExecutiveDashboard................................................................................................................11
CommandButtons....................................................................................................................14
GlobalCategories......................................................................................................................15
InternationalCapabilities..........................................................................................................16
CreatingaNewFile...................................................................................................................17
TheARGUSWizard....................................................................................................................18
SettingupaTemplate...............................................................................................................18
ChapterSummary.....................................................................................................................19
Chapter2
PropertyDescription,Timing,andInflation.................................................................................20
Objectives..................................................................................................................................20
Office,RetailandIndustrial......................................................................................................20
PropertyDescription.................................................................................................................21
Timing........................................................................................................................................22
AreaMeasures..........................................................................................................................24
Constants..................................................................................................................................25
PropertyInflation......................................................................................................................27
AdditionalDataandComments................................................................................................28
InputandOutputPreferences..................................................................................................30
Chapter3
MiscellaneousRevenues,Expenses,andCapitalExpenditures...................................................32
Objectives..................................................................................................................................32
MiscellaneousRevenues...........................................................................................................32
ReimbursableExpenses............................................................................................................35
NonReimbursableExpenses....................................................................................................37
CapitalExpenditures.................................................................................................................39
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DevelopmentCosts...................................................................................................................40
Escrow.......................................................................................................................................41
BudgetingAccountCodes.........................................................................................................42
GeneralVacancy.......................................................................................................................43
CreditLoss.................................................................................................................................46
Chapter4
RentRoll........................................................................................................................................47
Objectives..................................................................................................................................47
RentRoll....................................................................................................................................47
TenantInformation...................................................................................................................49
BaseRent..................................................................................................................................50
RentChanges............................................................................................................................51
RetailSales................................................................................................................................54
Reimbursements.......................................................................................................................57
RentAbatements......................................................................................................................58
LeasingCosts.............................................................................................................................60
SecurityDeposits......................................................................................................................64
Chapter5
MarketLeasingAssumptions........................................................................................................66
Objectives..................................................................................................................................66
MarketLeasingAssumptions....................................................................................................66
RenewalProbabilitiesandWeightedItems..............................................................................68
ChangingBaseRents.................................................................................................................69
OtherNonWeightedItems......................................................................................................70
TermOverrides.........................................................................................................................72
Chapter6
RemainingfieldsintheTenantRentRoll......................................................................................73
Objectives..................................................................................................................................73
UponExpiration........................................................................................................................73
IntelligentRenewals..................................................................................................................74
RenewalProbabilityOverrides.................................................................................................74
TenantNotes.............................................................................................................................75
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Chapter7
SpaceAbsorption..........................................................................................................................77
Objectives..................................................................................................................................77
SpaceAbsorption......................................................................................................................77
SpaceInformation.....................................................................................................................80
AbsorptionParameters.............................................................................................................81
ProjectionLeaseTerms.............................................................................................................81
AdditionalInformation.............................................................................................................83
Chapter8
PropertyPurchaseandResale......................................................................................................84
Objectives..................................................................................................................................84
PropertyPurchase.....................................................................................................................84
PropertyResale.........................................................................................................................86
Chapter9
DirectCapitalizationandPresentValue.......................................................................................90
Objectives..................................................................................................................................90
DirectCapitalization..................................................................................................................90
PresentValueDiscounting........................................................................................................92
Chapter10
DebtFinancingandPartnerships..................................................................................................94
Objectives..................................................................................................................................94
DisplayingDebt.........................................................................................................................94
DebtNameandCurrency.........................................................................................................96
DebtNoteDates........................................................................................................................97
DebtNoteTermLength............................................................................................................98
DebtAmounts...........................................................................................................................98
InterestRates............................................................................................................................99
AdvancedDebtOptions..........................................................................................................100
PartnerEquityContributions..................................................................................................101
CashFlowDistributions..........................................................................................................102
ResaleDistributions................................................................................................................102
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Chapter11
DepreciationandTaxes...............................................................................................................103
Objectives................................................................................................................................103
DepreciationandTaxes...........................................................................................................103
Chapter12
Reports........................................................................................................................................106
Objectives................................................................................................................................106
PropertyLevelReports...........................................................................................................106
DepreciationandTaxesReports.............................................................................................110
PartnerDistributionReports...................................................................................................110
TrackingReports.....................................................................................................................111
PresentationRentRollReport................................................................................................112
IndividualTenantReports.......................................................................................................112
MarketLeasingReports..........................................................................................................113
SupportingSchedulesReports................................................................................................115
StackingPlan...........................................................................................................................115
ReportingTools.......................................................................................................................116
ReportWriter..........................................................................................................................118
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Chapter 1
Getting Started

Objectives
Thischapterwilldiscussthefollowingtopics:
SupportforARGUSValuationDCF
PropertyLibrary
ExecutiveDashboard
CommandButtons
GlobalCategories
InternationalCapabilities
CreatingaNewFiles

Getting Support
GettingsupportforARGUSValuationDCFiseasy.Supportagentsmaybecontactedvia
phoneoremail.Listedbelowarethecontactdetailsandhoursofoperation:
SupportContactInformation:
US/Canada:1888MyARGUS(6927487)
AsiaPacific/Singapore:+6564112288
Japan:00531650404
Australia:+61292621332
NorthChina:108006500477
SouthChina:108002652492
Europe:+44(0)2082388345
Allotherpleasecall:+17136214343
Email: support@argussoftware.com
HoursofOperation:
Americas:7:30amto6:30pmGMT6MondaytoFriday,excludingUSApublic
holidays
Europe:9:00amto5:30pmGMTMondaytoFriday,excludingUKpublicholidays
Asia/Pacific:7:00amto7:00pmGMT+8MondaytoFriday,excludingSingapore
publicholidays
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Property Library

Description:
NavigationbeginsfromtheARGUSValuationDCFmainscreen,calledtheProperty
Library.ThePropertyLibrarydisplaysfilescontainedintheDatasubdirectoryofARGUS
ValuationDCF,andprovidesanumberoffileoperationsanddisplayoptions.

1
4
3
2
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Menus
TheARGUSValuationDCFdropdownmenusprovideaccesstoeveryavailablewindow
intheprogram.Muchofthecommonlyusedoptionsinthedropdownmenusarealso
accessiblefromthetoolbaricons.
TaskPane
TheARGUSValuationDCFTaskPaneattheleftsideofthescreenprovidesanumberof
shortcutandconveniencefunctions,whichinclude:
Tab Description
GettingStarted
Thispanequicklycreatesnewfiles,opensrecentfiles,
connectstotheARGUSValuationDCFwebsite,andaccessesa
sharedworkspaceonline.
ARGUSAlerts
ThispaneallowsyoutologintotheARGUSValuationDCF
websitetoreceiveinstantalerts,news,andotherARGUS
ValuationDCFrelatedinformation.
ARGUSWizard
TheARGUSValuationDCFWizardassistsincreatingnewfiles
andprovidesauserfriendlyinterfaceforbasicdatainput.
SharedWorkspace
ForthosewhohavecreatedorjoinedaSharedWorkspaceon
ARGUSZone,thispaneallowseasyaccesstofilesandother
contentinsidetheworkspace.
BuiltusingpopularMicrosoftSharePointtechnology,ARGUS
Softwarehascreatedaninnovativenewtoolcalled,ARGUS
Zone.TheZoneisanextranetthatsimplifiestheprocessof
sharingdocumentsandinformationovertheInternet.Witha
singleclick,memberscreatesecure,privateworkspacesfor
selectcollaboratorstosharedocumentsandinformation
acrosstheroomoracrosstheglobe.
ARGUSZonehasallthefunctionalityofSharePointwitha
clear,realestatefriendlyinterface.Thebuiltindocument
libraryandotherutilitiesmakeARGUSZoneanefficient,
convenientandsecurewaytoorganizeinformation.Typically,
userssetupsitesaroundpropertiesforassetmanagement,
acquisitionsorfinancing.However,ARGUSZonesitescanalso
organizeinformationaroundappraisals,consultingprojects,
vendorsormeetings.
TofindoutmoreaboutARGUSZone,gotoarguszone.com.

1
2
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PropertyLibraryToolbar
ThePropertyLibraryToolbarisoneofthemostusefulwaystoaccessspecificwindows
intheprogram.PlacethemouseoveraToolbaricontoidentifythewindowtheicon
represents.
ThetoolbaronthePropertyLibrarywindowallowsyoutonavigatetodirectoriesand
performactionsononeormultipleARGUSValuationDCFfileswithoutopeningthefiles
themselves.Thetoolbarcanbeusedtochangedefaultdirectoriestodisplay,refresh
thePropertyLibrary,emailafiletosomeone,reportonabatchofARGUSValuationDCF
files,createaportfolio,comparetwoormoreARGUSValuationDCFfiles,oradd
selectedfilestotheTenantRegistry.
ManyoftheitemsonthePropertyLibrarytoolbarrequirethatthefile(s)toworkwithis
specified.Toselectindividualproperties,clickthecheckboxcorrespondingtothe
property.ToselectallthepropertiescurrentlydisplayedinthePropertyLibrary,click
thecheckboxatthetopofthelist.Thischeckboxcanalsobeusedtoclearallcurrently
selectedproperties.
PropertyLibrary
ThePropertyLibrarywindowdisplaysalistofpropertyfilesandsubdirectoriesinthe
activedirectory.ThefollowingactionsmaybeperformedfromthePropertyLibrary:
Viewfileinformation
Openafile
Createaportfolio
Compareselectedfiles
Publishfiles
Reportonbatchesoffiles

3
4
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Executive Dashboard

Description:
Onceafilehasbeencreatedoropened,theExecutiveDashboarddisplays.The
ExecutiveDashboardisabasicsummaryofalltheinformationputintoanARGUS
ValuationDCFfile.
Themenus,toolbaricons,anddashboardhyperlinksarelinkstoinputscreens.

ExportandPrintbuttonsonthebottomrightportionofthewindowwillexportorprint
theExecutiveDashboardscreen.
TheImportGraphiciconisusedtoimportanddisplayimagesontheExecutive
Dashboard.DefaultimagesareprovidedfornewARGUSValuationDCFfiles.
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TochangethecontentsandformatoftheExecutiveDashboard,clicktheDashboard
TemplatestoolbariconorselectapreformattedDashboardtemplatefromthedrop
downmenu.
Thefollowingwindowdisplays:
Wheneditingorcreatinganewtemplate,theExecutiveDashboardOptionswindow
displaystabswithcontentavailableforinclusionorexclusiontoadashboard.Usethe
IncludeandExcludebuttonstoaddorremoveitemsfromthedashboardview.
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ToreorderinformationdisplayedontheExecutiveDashboard,usethearrowbuttonsto
movetheincludeditemupordowninthelist.

DashboardtemplatesmaybesavedandusedinotherARGUSValuationDCFsystems.
DashboardtemplatescanalsobeexportedbyselectingtheExportOption.

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Command Buttons

Description:
Thetablebelowliststhetoolbarbuttonsthataredisplayedintherevenueandexpenses
windows:
Button Description
Insertanewrevenueorexpenseline.
Copytheactivelineandinsertitdirectlybelowtheoriginal.
Thisisusefulforenteringinformationforsimilaritems.The
fieldsinthecopiedlinemaybeeditedasneeded.
Deletetheselectedlines.Asaprecaution,ARGUSValuation
DCFrequirestheconfirmationoftheDeletecommand.
Rearrangelinesintothedesiredorder.Selecttherowto
move,clickMove,andthenclicktherowwhereitshouldbe
moved.
Copythecontentsoftheactivecell.*Note:Cellsmayonlybe
copiedandpastedwithinthesamecolumn.
Pastethecontentsofacopiedcellintoanewcell.Thisbutton
isonlyavailableifthecontentsofanothercellareselected.
Undouptothelasttenactionsperformedinthecurrent
screen.ARGUSValuationDCFwillundocategoryselection
changes,butmodificationstotheactualcategoriescannotbe
undone.
Redouptothelasttenundoneactions.
Displayacalculatortool.
Thisbuttonindicateswhichdirectionthecursorwillmove
whentheEnterkeyispressed.Clickthisbuttontochangethe
directionofthearrow.
Saveanychangesandexitthewindow.
Thisbuttonisavailablewhenaselectedfieldsupportsthe
entryofdetailinformation.
AccesstheARGUSValuationDCFHelpsystem.

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Global Categories

Description:
GlobalcategoriesarecategoriesthatcanbeusedinanyARGUSValuationDCFfile.
TheseglobalcategoriesprovideextracontrolandconsistencyformanyARGUS
ValuationDCFinputassumptionsandmarketrates.ByusingGlobalcategories,itis
possibletomodifyassumptionsacrossaportfolioforquickandeasysensitivityanalysis
orvaluationupdates.
GlobalCategoriesmayonlybecreatedoreditedwhennoARGUSValuationDCFfilesare
open.OnceaGlobalCategoryiscreated,thecategorymaybeappliedinanyproperty
file.

HowTo
CreateoreditaGlobalCategory:
1. CloseanyopenARGUSValuationDCFfiletoreturntothePropertyLibrary.
2. FromtheFilemenu,selectGlobalCategories.Asubmenudisplays.
3. FromtheGlobalCategoriessubmenu,selecttheappropriatecategory.The
categorywindowdisplays.
4. Tocreateacategory,clickNew.
5. Toeditanexistingcategory,clicktheappropriatecategoryandthenclickEdit.
6. Addoreditthedesiredentriesinthewindow.
7. ClickOKtosavetheGlobalCategory.
8. ClickClose.
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ApplyaGlobalCategoryinapropertyfile:
1. OpentheARGUSValuationDCFfileinwhichtheGlobalCategorywillbeapplied.
2. Accesstheappropriatecategorywindow.
3. ClickNew.Thecategorywindowdisplays.
4. ClicktheBasedOndropdownarrowandselecttheappropriateGlobalCategory.
5. ClickOKtosavethecategory.
6. ClickClose.

International Capabilities

Description:
SimilartoGlobalCategories,specificfeaturesmaybeappliedfordifferentregions.
ThesecapabilitiesareenteredinCountrySettings.OnceaCountrySettingscategoryis
created,thecategorymaybeappliedinapropertyfile.
HowTo
CreateoreditaCountrySettingscategory:
3. FromtheGlobalCategoriessubmenu,selectCountrySettings.Thecategory
windowdisplays.
4. TocreateanewCountrySettingscategory,clickNew.
5. ToeditanexistingCountrySettingscategory,clicktheappropriatecategoryand
thenclickEdit.
6. Addoreditthedesiredentries.
7. ClickOKtosavetheCountrySettingscategory.
8. ClickClose.
ApplyaCountrySettingscategoryasthedefaultsettingforanynewfiles:
3. FromtheGlobalCategoriessubmenu,selectCountrySettings.Thecategory
windowdisplays.
4. ClicktheappropriateCountrySettingscategoryandthenclickSetBase.
5. Toacceptthebasechange,clickOK.
6. ClickClose.
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CountrySettingscanbechangedforindividualpropertyfilestoaccountfordifferent
regionsettings.ToapplyaCountrySettingscategorytoanindividualpropertyfile:
1. OpentheARGUSValuationDCFfileinwhichtheCountrySettingscategorywill
beapplied.
2. FromthePropertymenu,selectDescription.ThePropertyDescriptionwindow
displays.
3. ClicktheInputPreferencestab.
4. ClicktheInputSettingsdropdownarrowandselecttheappropriateCountry
Settingscategory.Thesettingsinthiscategorywilldeterminehowthe
measurements,currencyanddateformatsareenteredforthepropertyfile.
5. ClicktheOutputPreferencestab.
6. ClicktheOutputSettingsdropdownarrowandselecttheappropriateCountry
Settingscategory.Thesettingsinthiscategorywilldeterminehowthe
measurements,currencyanddateformatswillbeshownonthereportsforthe
propertyfile.
7. ClickOKtosavethesettingfortheproperty.
Creating a New File

Description:
Filescanbecreatedbythefollowingthreemethods:
FromScratch(Whenafileiscreatedfromscratch,propertyspecificcategories
andinformationissetupforthefile.)
ARGUSValuationDCFWizard
FromTemplate
Practice:
1. FromtheFilemenu,selectNew.Asubmenudisplays.
2. FromtheNewsubmenu,selectFromScratch.
3. Anewfilewindowdisplays,enterthefollowinginformation:
Field Entry
FileName ARGUSTrainingFile
4. ClickSave.ThePropertyDescriptionwindowdisplays.Proceedtothenextchapter
toenterpropertydescriptionsforthefile.
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The ARGUS Wizard

Description:
TheARGUSValuationDCFWizardisastepbystepguidetoenteringthepropertydata
foranewpropertyfromscratch.Informationisaddedthroughaform.Onceallthe
neededinformationisaddedthroughtheform,allentereddataisaddedintoanewfile.

HowTo
CreateafilefromtheARGUSValuationDCFWizard:
1. FromtheFilemenu,selectNew.Asubmenudisplays.
2. FromtheNewsubmenu,selectARGUSValuationDCFWizard.
3. IntheARGUSValuationDCFWizard,clickContinuetoaddapropertyfile.The
FileNameandPropertyTypewindowdisplays.
4. IntheFileNamefield,enterthenameforthefile.
5. ClickthePropertyTypedropdownarrowandselecttheappropriateproperty
type.*Note:Forthiscasestudy,selectOffice/RetailwhencreatingtheProperty
Type.TheselectedPropertyTypedetermineshowtherestofthefileisconstructed.
Therefore,oncethePropertyTypeischosen,itcannotbechanged.
6. ClickContinue.
Continuefollowingthestepstoenterpropertydescriptions,revenues,expenses,
tenantinformation,andyieldinformation.Whenallyournecessaryinformation
isadded,clickFinish.ThepropertyfileiscreatedandtheExecutiveDashboard
displays.
Setting up a Template

Description:
Atemplatefilemaybecreatedwithcategoriesandgeneralsettingstouseasabasisfor
newprojectsinARGUSValuationDCF.Usingatemplateavoidssomeoftherepetitive
dataentrytasksformultiplenewprojects.
Beforeusingatemplate,agenericfilemustbecreated.Withinthisgenericfile,addall
therepetitivedatatouseinallnewfiles.Oncethegenericfileiscompleted,itissaved
asatemplate.
Oncethetemplateiscreated,anynewfileaddedbythetemplatewillautomatically
includetherepetitivedatafromthetemplate.

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HowTo
Addatemplate:
1. Startanewfilefromscratch.SeetheCreatingaNewFilesectionfordetailed
instruction.
2. Addthenecessaryrepetitivedata.Thisdatacouldincludevariouscategories,
marketleasingassumptions,genericrevenuesandexpenseswithnomonetary
values,andyieldinformation.Thesetopicswillbediscussedindetailinthe
followingchapters.
3. FromtheFilemenu,selectCopy.Asubmenudisplays.
4. Fromthesubmenu,selectMakeaTemplate.
5. Aninformationwindowdisplays.ClickOK.
Createafileusingatemplate:
1. FromtheFilemenu,clickNew.Asubmenudisplays.
2. Fromthesubmenu,clickFromTemplate.TheNewwindowdisplays.
3. IntheFileNamefield,enterthenameofthenewfile,andthenclickSave.The
Templateswindowdisplays.
4. Selecttheappropriatetemplate,clickOK.Thenewfileiscreatedwiththepre
defineddatafromthetemplate.
Chapter Summary
ThischapterprovidedinsightandinformationregardinggettingstartedwithARGUSValuation
DCF.
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Chapter 2
Property Description, Timing, and Inflation

Objectives
ThefirststepinbuildinganARGUSValuationDCFfileistoenterbasicproperty
information.Thischapterwillcoverhowtoinputdescriptiveinformationaboutthe
propertysuchasname,address,propertytype,andsize.Aswellasinformation
regardingthetimingoftheanalysistobedoneandinflationrates.
PropertyDescription
Timing
AreaMeasures
Constants
PropertyInflation
AdditionalDataandComments
InputandOutputPreferences

Office, Retail and Industrial
Commercialproperties,suchasofficebuildings,retailcenters,andindustrialbuildingsare
modeledinARGUSValuationDCFusingthesamemethodology.Thisguidedescribesthe
processofmodelingthefollowingscenario:
Internationalinvestorsareconsideringthepurchaseofanew20storyoffice
buildinginNewYorkCity.A10yearDCFanalysiswillassistintheirdecision.
The487,720squarefootbuildingisapproximately50%occupiedwithasingle
anchortenant,butgiventhecurrentmarketconditions,thebuildingisanticipatedto
leaseuptostabilizedoccupancywithin12months.
Variousmiscellaneousrevenues,operatingexpensesandcapitalexpenditureswill
alsobeanalyzed.
A2%generalinflationratewillbeassumed.A2%generalvacancyanda0.5%credit
andcollectionlosswillbothbeappliedtothepotentialgrossrevenue.
Atarget10%InternalRateofReturnisdesiredfortheinvestment.Theresalewillbe
calculatedbyapplyinga6.25%capitalizationrateonthe11thyearNetOperating
Income,thenadjustedfora1.5%resalecommissions.

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Property Description

Description:
ThePropertyDescriptionwindowisthefirstwindowthatappearswhencreatinganew
file.ThiswindowcontainsbasicinformationaboutthepropertyincludingtheProperty
Name,Address,Country,andPropertyType.SeveralPropertyTypesareavailable
includingOffice/Industrial,Retail,Office&Retail,Apartment,Hotel/Motel,General,
Portfolio,UnitSales,andLoan.
Practice:
1. FromthePropertymenu,selectDescription.
2. ThePropertyDescriptionwindowdisplays.Notethatthereareothertabsatthe
topofthewindowforaccesstootherwindowssuchastiming,areameasuresand
inflation.
3. Enterthefollowinginformation:
Field Entry
PropertyName NewYorkTower
Address 1FirstStreet
City NewYork
State NY
Zip 10001
Country US
PropertyType Office&Retail
*Note:TheselectedPropertyTypedetermineshowthe
restofthefileisconstructed.Therefore,oncetheProperty
Typeischosen,itcannotbechanged.

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Timing

Description:
TheTimingtabcontainsspacetoenteranAnalysisStartDate,ReportingStartDate,and
NumberofYearstoReportorEndDate.
TheReportingStartDatemustfallonoraftertheAnalysisStartDate.BoththeAnalysis
andReportingStartDatesareenteredinaMonth/Yearformat,andARGUSValuation
DCFisassumingthefirstdayoftheenteredmonth.
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Additionalfielddescriptionsareasfollows:
Field Description
AnalysisStartDate TheAnalysisStartDatesetsthedateatwhichARGUS
ValuationDCFcalculationswilloccur,andallentriesthatbegin
witharelativestartdatewillberelativetothisdate.For
example,ifatenantsleasebeginsinMonth6,ARGUS
ValuationDCFwillinterpretthisasthe6
th
monthfromthe
AnalysisStart.
ReportingStartDate ReportingStartDatesetsthedateatwhichreportswillbegin.
ThisincludesPropertyLevelreports,SupportingSchedules,
andothertimeseriesreports.TheReportingStartDatedoes
notcontroloralterthetimingofbasecalculationsinthe
program.
YearsToReport
orEndDate
Theentryinthisfielddefinestheendoftheholdingperiod.
Acceptedentriesincludeafixedenddateorthewhole
numberofyearsfromthereportingstartdate.Theinterval
betweentheanalysisstartdateandtheendofthereporting
periodcannotexceed40years.

Practice:
1. InthePropertyDescriptionwindow,clicktheTimingtab.
2. Enterthefollowingtimingfortheproperty:
Field Entry
AnalysisStartDate July1,2008(EnterM/YYformat=7/08)
ReportingStartDate July1,2008(EnterM/YYformat=7/08)
YearsToReport
orEndDate
10years
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Area Measures

Description:
TheAreaMeasurestabiswherethepropertysizeisentered.Itisalsopossibletoenter
anAlternatePropertySizeif,forexample,thecalculationofexpenseswillbebasedona
sizethatisgreaterorsmallerthanthepropertysize.

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Practice:
1. InthePropertyDescriptionwindow,clicktheAreaMeasurestab.
2. NoticethatthePropertySizeisalreadyhighlighted.ClickEdittoadjusttheProperty
Sizecategory.
Field Entry
PropertySize 487,720
4. ClickOK.

Constants

Description:
TheConstantstaballowsthecreationanddefinitionofaConstantscategory.This
categorywillthenappearasa%ofConstantselectionintheUnitsfieldforeachofthe
revenueandexpensewindows.
AnexampleofaConstantisLandValue,whichcouldbeusedtolatertomodeltaxesor
feesassociatedwiththevalueoftheland.
Note:Thetopcategory,TotalPurchasePrice,willexistinallARGUSValuationDCF
modelsandcannotbedeletedormoved.Editingthiscategorywillopenthe
PropertyPurchasePricewindowtomodifythepurchasepriceinput.Seethe
PropertyPurchasesectionforadditionaldetailsregardingtheinputofpurchase
price.
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ClickDirectEntrytoenteranamountasasimpleinput.ClickDetailtoenterdetailed
information.

Field Description
Name Enteradescriptivenameforthisconstant.
DirectEntry Enterthevalueoftheconstantasastaticvalueorasan
amountthatchangesovertime.
PercentofLine Definethevalueofthisconstantasapercentageofother
results.
ConstantDirectEntry EntertheconstantvalueorclickDetailtoentervaluesthat
changeovertime.
Practice:
1. InthePropertyDescriptionwindow,clicktheConstantstab.
2. NoticethattheTotalPurchasePriceisalreadyhighlighted.ToadjusttheTotal
PurchasePricecategory,clickEdit.
3. Tocreateanewcategory,clickNewandenterdesireddata.

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Property Inflation

Description:
ThePropertyInflationtabiswherebothgeneralandspecificinflationratesareentered.
Theseratesapplytorevenuesandexpensesbydefaultthroughoutthefile.
Percentagesmaybeenteredaseitheradecimalorawholenumber.Whenenteringa
percentagelessthan1%(e.g.0.5%),useadecimalformat(e.g.0.005)andARGUS
ValuationDCFwillconverttheinputtoapercentageformatautomatically.
Ifaninflationfieldisleftnull,itwilldefaulttotheGeneralInflationrate.Year1inflation
isalwaysunavailableforinput,sinceinflationdoesnotoccuruntilthebeginningofthe
2
nd
year.
Inoffice,retail,andindustrialproperties,aReimbursementMethodisalsoselected.
ReimbursementMethodoptionsinclude:
Option Description
Fiscalreimbursementusing
fiscalinflation
Tenantsreimbursetheirexpensestothepropertyownerona
fiscalbasisandthereimbursableexpensesalsoinflatefiscally.
Calendarreimbursement
usingcalendarinflation
calendarbasisandthereimbursableexpensesalsoinflateona
calendarbasis.
Calendarreimbursement
usingfiscalinflation
calendarbasisbutthereimbursableexpensesinflatefiscally.

Forreimbursementmethodsthatincludefiscalinflation,aspecificinflationmonthmay
bechosen.TheInflationMonthfieldspecifieswheninflationistobeapplied.Choose
fromthefollowingoptions:
Option Description
AnalysisStart ARGUSValuationDCFwillapplyannualinflationinthesame
monthinwhichtheanalysisbegins.
SpecificMonth ARGUSValuationDCFwillapplyannualinflationinthe
selectedmonth.

Practice:
1. InthePropertyDescriptionwindow,clickthePropertyInflationtab.
Field Entry
General 2%,2or0.02(for2%annualinflation)
3. Becauseinflationisprojectedtobe2%eachyear,clickExtendtoapplytheentered
inflationthroughoutthefollowingyearsoftheanalysis.
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Additional Data and Comments

Description:
AdditionalDatasuchasthepropertyowner,lender,propertymanagerorassetmanager
canbeenteredintheAdditionalDatatab.Iftheadditionaldatadoesnotfallwithin
thesetitles,theclickontheCommentstabtoentermiscellaneouscomments.

HowTo
Addadditionaldata:
1. InthePropertyDescriptionwindow,clicktheAdditionalDatatab.
2. Enterthedesiredinformationintheappropriatefields.
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Addcomments:
1. InthePropertyDescriptionwindow,clicktheCommentstab.
2. Enterthedesiredinformationintheappropriatefields.

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Input and Output Preferences

Description:
TheInputPreferencestabiswhereARGUSValuationDCFdataentrypreferencesare
specified.TheOutputPreferencestabiswhereARGUSValuationDCFreporting
preferencesarespecified.OptionsthatcanbemodifiedincludeAreaMeasurement
Units,Currency,andDateFormat.
Thiscapabilityallowspropertytobemodeledusinglocalcurrencyandareameasures
andconvertedatapropertyorportfolioleveltoanothercurrencyorareameasure
conventionforinternationalinvestmentandreportingpurposes.

HowTo
Specifythedesiredinputpreferences:
1. InthePropertyDescriptionwindow,clicktheInputPreferencestab.
2. ClickDetailtomakeanychangestotheAreaMeasurementUnits,Currency,or
DateFormat.
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Specifythedesiredoutputpreferences:
1. InthePropertyDescriptionwindow,clicktheOutputPreferencestab.
2. ClickDetailtomakeanychangestotheAreaMeasurementUnits,Currency,or
DateFormat.

ChapterSummary:
ThisfirststepinbuildinganARGUSValuationDCFfileistoenterbasicproperty
information.Inthissection,thePropertyDescriptionwasintroduced.Thiswindow
includestheTiming,PropertySize,Constants,andPropertyInflationtabs.
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Chapter 3
Miscellaneous Revenues, Expenses, and
Capital Expenditures

Objectives
OncethePropertyDescriptionisentered,thenextstepincreatingafileistoenterthe
miscellaneousrevenuesandpropertyexpenses.Thischapterwillrevealhowtoinput
thefollowing:
MiscellaneousRevenues
OperatingExpenses
CapitalExpenditures
EscrowcontributionsandDistributions
GeneralVacancyandCreditLoss

Miscellaneous Revenues

Description:
MiscellaneousRevenuesarepropertylevelincomeitemsnotreceivedfromthetenants.
Theseitemscouldincludevendingmachinesorroofantennas.Anyoperatingrevenue
notpaidbythetenantscanbeenteredintothiswindow.

FieldsintheMiscellaneousRevenueswindowareasfollows:
Field Description
Name Enteranamefortherevenueitem.Thisinformationprintson
calculatedreportsexactlyasitisentered.
AcctCode Enteranaccountcodefortheitemasneeded.Thisfieldis
optional.
Amount Definetheamountofmiscellaneousrevenueasasimplevalue
(suchas$10,000)oruseaspecificdataentrymethod:
Detail:Specifytheexactmonthsandamountswhen
revenueisreceived.
Sublines:Specifytheindividualcomponentsthatmake
uparevenuelineitem.
Scurve:Spreadanypercentageofarevenueitemovera
seriesofmonths.
Page|33
Units DeterminehowtheentryintheAmountfieldiscalculatedby
selectingoneofthefollowingoptions:
$Amount:Theenterednumberiscalculatedasafull
paymentamount.
$/Area:Theenterednumberismultipliedbytheselected
areameasurementintheArea/Constantcolumn.
%ofEGR:Theenterednumberiscalculatedasa
percentageoftheEffectiveGrossRevenue.
%ofConstant:Theenterednumberiscalculatedasa
percentageoftheConstantcategoryselectedinthe
Area/Constantcolumn.
%ofLine:ThePercentofLinewindowallowstherevenue
tobebasedonapercentageofotheritemsinthe
property.
Area/Constant DeterminehowcertainentriesintheUnitsfieldiscalculated
byselectingoneofthefollowingoptions:
OneofmanyAreaMeasureselections
TotalPurchasePriceorotherConstantsselections
Frequency Determinehowoftentoapplythelineentrybyselectingone
ofthefollowingoptions.
/Year
/Month
/Quarter
%Fixed
The%Fixedfieldadjustsforvacancybydividinglineitemsinto
fixedandvariablecomponents.Ifanumberisenteredinthis
field,itwilloverridetheARGUSValuationDCFdefault,which
is100%fixed.ARGUSValuationDCFwilladjustthevariable
amountbytheaveragephysicaloccupancylevelforthatyear.
PercentFixed:Example
Belowarethreeexamplesofthesameexpenseatdifferent
buildingoccupancies.Assumecommonareamaintenanceis
$3.25/SqFtand65%fixed.Theexpenseitemwouldbe
calculatedasfollows:
Building0%Occupied
Fixed:3.25x.65=2.11
Variable:3.25x.35x0=0.00
TotalExpense:=2.11
Building75%Occupied
Fixed:3.25x.65=2.11
Variable:3.25x.35x.75=0.85
TotalExpense:=2.96
Building100%Occupied
Fixed:3.25x.65=2.11
Variable:3.25x.35x1.00=1.14
TotalExpense:=3.25
Page|34
Inflation Leavethisfieldblanktousethegeneralinflationfromthe
PropertyDescriptionwindow.Enteraspecificinflationrateto
overridethegeneralinflationforthislineitem.
RefAcct Thereferenceaccountfieldallowsthedataentryoftheline
itembutpreventstheitemfromappearingontheCashFlow
report.
SelectYesifthelineitemisenteredforinformational
purposeonly.TheitemwillbeexcludedfromtheCash
Flowreport.
LeavethefieldblankorchangetheselectiontoNoto
includethelineitemintheCashFlowreport.
Notes SelectYestoenternotesandcommentsaboutthelineitem.

Practice:
1. FromthePropertymenu,selectMiscellaneousRevenues.
2. ClickInserttoaddanewlineasneeded.
Line FieldEntries
TenantServices $0.50/SqFt./Monthat0%Fixed
AntennaeFees $50,000perMonthat100%Fixed
VendingMachines $20,000perMonthat0%Fixed
4. Whenalllinesareentered,clickClosetosavetheinformation.

Page|35
Reimbursable Expenses

Description:
Operatingexpensesthatthelandlordmayrecoverfromthetenantsareenteredinthe
ReimbursableExpenseswindow.Commonreimbursableexpensestypicallyinclude
Utilities,Taxes,Insurance,RepairsandMaintenance.
Allentriesinthiswindowwillbeavailableforreimbursementbythetenants.An
expensemaybeenteredasasimpleAmount,DetailedAmount,$perArea,%of
Constant,%ofEGR,%ofLine,Prop13%orasSublines.Forfielddescriptions,seethe
MiscellaneousRevenuessectionofthisdocument.
Expensesareoftenbasedonoccupancy.Whenthisisthecase,leasescanhaveaGross
Upclause,whichspecifiesthattenantsmustpayexpensesuptoadefinedoccupancy
level.GrossUpforReimbursementartificiallygrossesupexpensestotheoccupancy
percentagelevelenteredintheReimbursableExpenseswindow.TheGrossUpfeature
appliesonlytoexpensesthatarelessthan100%fixed.Itappliesonlytothevariable
portionoftheexpense,anddoesnotaffecttheactualexpensethatappearsontheCash
Flowreport.
Inthisexample,aJanitorialexpenseissetat0%Fixed.Thismeanstheentireexpenseis
calculatedbasedonoccupancy.Withoutthegrossupfeatureactivated,thetenants
wouldpaytheactualexpensethatcalculatesontheCashFlowreport.IftheGrossUp
forReimbursementboxischecked,and90%isentered,tenantswillalwaysreimburse
theJanitorialexpenseasifthebuildingwereataminimum90%occupancy.
NotGrossedUp:
Janitorialexpenseenteredas$50,000(0%Fixed)
Occupancy=50%
50,000x.50=$25,000
CalculatedJanitorialexpense=$25,000
Tenantsreimbursebasedona$25,000expense
UsingGrossUp:
Janitorialexpenseenteredas$50,000(0%Fixed)
Occupancy=50%
Grossuppercent=90%
50,000x.90=$45,000
CalculatedJanitorialexpensegrossedup=$45,000
Tenantsreimbursebasedona$45,000expense

Page|36
Practice:
1. FromthePropertymenu,selectReimbursableExpenses.
2. ClickInserttoaddanewline.
Line FieldEntries
Utilities Thecostforutilitieswillvaryeachmonth.ClicktheAmount
dropdownarrowandselectDetail.Enterthefollowing
amountsinthefirstcolumn:
July:0.75
August:0.75
September:0.65
October:0.65
November:0.70
December:0.70
January:0.75
February:0.75
March:0.70
April:0.65
May:0.65
June:0.70
1. ClickColumntocopytheenteredyeartoallfollowing
yearsintheanalysis.
2. ClickOKtosavethedetailedinformation.
3. ClicktheUnitsdropdownarrowandselect$/Area
4. ClicktheArea/Constantdropdownarrowandselect
PropertySize.
IntheFixedcolumn,enter30%.
Repairs&Maintenance $1,200,000peryearat75%fixed
Page|37
Janitorial $1.50perSqFt.basedonthePropertySizeeachyearat15%
fixed.
OtherExpenses $20,000permonthat100%fixed
4. Forthisexample,thepropertygrossesupexpensesto95%occupancy.Clickthe
GrossUpforReimbursementcheckboxandenter95inthe%occupancyfield.

5. ClickClosetosavethereimbursableexpensesinformation.

Non-Reimbursable Expenses

Description:
OperatingexpensesthatarenotreimbursedbythetenantsareenteredintheNon
ReimbursableExpenseswindow.Oneexampleofanonreimbursableexpensemaybea
managementfee.
NonreimbursableexpenseswillprintontheCashFlowreportintheOperatingExpense
section.TheseitemsprintdirectlybelowtheReimbursableExpensesitems.Forfield
descriptions,seetheMiscellaneousRevenuessectionofthisdocument.

Page|38
Practice:
1. FromthePropertymenu,selectNonReimbursableExpenses.
Line FieldEntries
Land&PropertyTaxes Taxestotaling$2.75MarepaidinJulyofeachyear.Clickthe
AmountdropdownarrowandselectDetail.Enter$2.75Min
theJulycellandclicktheColumnbutton.Taxesareexpected
toinflate0.50%peryear.IntheInflationcellfortheJun2010
column,enter0.005andclickExtend.
Insurance Insuranceis$350,000peryearat100%fixed.
ManagementFees ManagementFeesare3.5%oftheEffectiveGrossRevenues.
4. ClickClosetosavethenonreimbursableexpenseitems.
Page|39
Capital Expenditures

Description:
ExpensesthatdonotaffectthepropertysNetOperatingIncomeshouldbeenteredin
theCapitalExpenditureswindow.TheseitemsappearintheLeasingandCapitalCosts
sectionontheCashFlowreport.
CapitalExpensesaretypicallyreplacementreservesorcapitalimprovements.These
itemsareenteredthesamewayasintherevenueandexpenseswindows.Forfield
descriptions,seetheMiscellaneousRevenuessectionofthisdocument.

Practice:
1. FromthePropertymenu,selectCapitalExpenditures.
Line FieldEntries
CapitalImprovements Plannedcapitalimprovementsinclude$5,000,000inMarch2010.
Thisestimateisin2008dollarsandwillbeallowedtoinflate.
ReplacementReserves Reserveswillbe$1.50/SqFt./Year.
Page|40

4. ClickClosetosavetheexpenditures.
Development Costs

Description:
DevelopmentCostsarecoststhatareincurredduringtheconstructionphasefora
property.Developmentcostsinclude:

Window Description
Land/AcquisitionCosts Enterthecostsofthelandareaorpropertyacquisitionand
associatedacquisitioncosts.Theseitemsmayincludeland
costs,optionsmoniesandenvironmentalassessment.
Hard/ConstructionCosts Enterthehard/constructioncostsfortheproject.
Hard/constructioncostsincludethelaborandmaterials
neededtoconstructabuilding.Thesetypesofcostsmay
includeconstructionmaterials,waterlines,electricalsystems,
plumbing,elevators,androadbuilding.
Soft/DevelopmentCosts Enterthesoftdevelopmentcostsfortheproject.
Soft/developmentcostsarenotconsideredtobedirectly
relatedtophysicalconstruction.Examplesincludebuilding
permits,surveyfees,architecturalfees,engineeringfees,legal
feesandconstructionmanagementfees.

HowTo
Addcostsassociatedwithlandandacquisitions:
1. FromthePropertymenu,selectDevelopmentCosts.Asubmenudisplays.
2. Fromthesubmenu,selectLand/AcquisitionCosts.
3. Enterthedesiredlandandacquisitioncostsfortheproject.
4. Whenalllinesareentered,clickClose.

Page|41
Addcostsassociatedwithconstruction:
2. Fromthesubmenu,selectHard/ConstructionCosts.
3. Enterthedesiredhard/constructioncostsfortheproject.

Addcostsassociatedwiththedevelopmentfees:
2. Fromthesubmenu,selectSoft/DevelopmentCosts.
3. Enterthedesiredsoft/developmentcosts.
Escrow

Description:
Escrowwindowsallowtheentryofescrowcontributionsanddistributionswithinthe
analysis.Italsoallowstheholdoftheescrowbalanceasadditionalcollateralforaloan.
Window Description
EscrowContributions Entercontributionstotheescrowaccount.Itemsaddedinthe
EscrowContributionswindowwillalsobelistedontheEscrow
DistributionsandEscrowBalancewindows.
EscrowDistributions Thiswindowspecifieswhenthefundsintheescrowaccount
aretobedispersed.
EscrowBalance Thiswindowdeterminesthefollowinginformation:
Applyaninterestratetotheescrowbalance.
Indicatewhethertheescrowbalanceshouldbeaddedto
theresaleamount.
Determinefromwheretheescrowcontributionsare
taken.
Applyasourcetofundtheescrowcontributions(if
needed).

Page|42
ThefieldsintheEscrowContributionsandEscrowDistributionswindowsarethesame
astheRevenueandExpenseswindows.ThefieldsintheEscrowBalancewindowareas
follows:
Field Description
InterestRate Enteraninterestratetoapplytotheescrowaccountbalance.
Thisratewillbecompoundedmonthly.
AddtoResale Toaddtheescrowbalancetotheresaleproceeds,clickthe
dropdownarrowandselectYes.*Note:Thisoptionisnot
availableinUnitSalesandDevelopmentproperties.
Type ThisfieldspecifieswhetherARGUSValuationDCFwill
interpretescrowcontributionsascapitalornoncapitalitems.
Capital:Ifthisoptionisselected,ARGUSValuationDCF
willinterpretescrowcontributionsascapitalitems.
Equity:Ifthisoptionisselected,ARGUSValuationDCF
willinterpretescrowcontributionsnoncapitalitems.The
sourceoftheequitycontributionmustbeselectedinthe
nextfield.
FundingSource Thisfieldspecifiesthesourcefromwhichtheequity
contributionisbeingdrawn.Thesourcesmayincludedebt
financingnotesandpartnercontributions.
Budgeting Account Codes
Description:
AnalphanumericBudgetingAccountcodeofupto12charactersforeachlabelcanbe
assignedtocashflowlineitems.Additionally,theappearanceofthereportlabelsmay
bechanged.Thisdoesnotchangeanyreportcalculations,buttheuserdefinedlabel
willappearonreportsinplaceofthedefaultlabel.
Practice:
1. FromthePropertymenu,selectBudgetingAccountCodes.
2. IntheAccountCodefields,entertheaccountcodesforthedesiredcategories.
3. ARGUSValuationDCFincludesaDefaultLineLabelforeachcategory.Touse
differentlabels,enterthecategorynamesintheUserDefinedLineLabelfields.
Page|43
4. ClickClosetosavethecodes.

General Vacancy

Description:
GeneralVacancyisanoptionalmethodofapplyingadditionaleconomiclosstoa
property.Itisanannualcalculationthatcalculatesthelossusingtheendofyear
incomenumbers.Thiscalculationisespeciallyhelpfulforpropertieswithconsistent
changesinincome.
Page|44
GeneralVacancyamountswillbereflectedonthePropertyCashFlowreportbeforethe
EffectiveGrossRevenuetotal.SeveraloptionsareavailableforcalculatingGeneral
Vacancy:
Field Description
Method Determinehowtocalculatethegeneralvacancyforthe
valuation.Selectoneofthefollowingoptions:
PercentofPotentialGrossRevenue:allincomepaidby
thetenantsandallmiscellaneousrevenues.
PercentofScheduledBaseRevenue:baserentalincome
paidbythetenants;excludesadditionalrentchanges,
recoveriesandmiscellaneousrevenues.
PercentofAllRentalRevenue:allrentalincomeand
recoveriespaidbythetenants;excludesmiscellaneous
revenues.
DirectInputofAmounts:enterafixedamounttodeduct
fromthePotentialGrossRevenue.
PrimaryRate/Amount Applythepercentageoramounttouseforthegeneral
vacancy.Useafixedamountforeveryyearofthecalculation,
orclickDetailtoenterdifferentamountsineachyearforthe
calculation.
OverridesBasedOn Specifyhowoverridesaretobebasedonanyofthefollowing
groups:
TenantGroups(default)
IndustryGroups
UserDefinedGroups
OverridesAffectPrimary
RateAs
DeterminethewayARGUSValuationDCFinterpretsthe
overrideratesenteredforincludedgroups.Thefollowing
optionsareavailable:
PercentAdjust
BasisPointAddition
Replace(default)
AvailableGroups Thisfielddisplaystheavailabletenantgroupsthatmaybe
usedforoverrides.
Touseadifferentgeneralvacancyrateforatenantgroup,
highlightthegroupandclickInclude.IntheReplacement
Ratefield,enterthevacancyrateforthatspecificgroup.In
theExcludeuponRolloverfield,selectNotousetheoverride
rateforalltermsforthetenantsinthegroup.
Page|45
Options TheseoptionsmodifytheGeneralVacancyLosscalculationby
theimpactoftheprojectedphysicalvacancyoftheproperty,
knownasAbsorption&TurnoverVacancy.
PercentBasedonRevenueMinusAbsorption&
TurnoverVacancy:Thedefaultoptionwillcausethe
modeltocalculatetheGeneralVacancyLossbeforeany
deductionsforAbsorption&TurnoverVacancy.Inother
words,ifPotentialGrossRevenueorScheduledBase
RentalRevenueareselectedastheMethod,the
Absorption&TurnoverVacancywillbeaddedbacktothe
cashflowforthecalculationoftheGeneralVacancyLoss
Result.
ReduceGeneralVacancyResultbyAbsorption&
TurnoverVacancy:Thedefaultoptionwillreducethe
GeneralVacancyLossResultbytheAbsorption&
TurnoverVacancy.

Practice:
1. FromthePropertymenu,selectGeneralVacancyLoss.
2. Enterthefollowinginformation.
Field Entry
Method PercentofPotentialGrossRevenue
PrimaryRate 2(for2%generalvacancy)
3.ClickOK.
Page|46
Credit Loss

Description:
TheCredit&CollectionLosswindowappliesalossinthecashflowreportthatcanbe
attributedtobaddebt,delinquenciesandnonpaymentofrents.ARGUSValuationDCF
calculatescreditandcollectionlossesannually;therefore,lossamountsdonotchange
frommonthtomonth.Generalvacancylossesdonotaffectthecreditandcollection
losscalculations.
TheCreditandCollectionLosswindowissetupexactlyastheGeneralVacancyLoss
window.RefertotheGeneralVacancytopicforfielddescriptions.
Practice:
1. FromthePropertymenu,selectCreditCollection&Loss.
Field Entry
Method PercentofPotentialGrossRevenue
PrimaryRate 0.005(for0.5%creditloss)

3. ClickOK.
ChapterSummary:
Oncethebasicpropertyinformationisentered,thenextstepinbuildinganARGUS
ValuationDCFfileisinputtingtherevenuesandexpenses.Inthissection,Miscellaneous
Revenues,ReimbursableandNonReimbursableExpenses,andCapitalExpenditures
weresetup.Also,Escrow,GeneralVacancyandCreditLosstopicswerediscussed.
Page|47
Chapter 4
Rent Roll

Objectives
CurrenttenantinformationisenteredintheRentRollwindowinARGUSValuationDCF.
ThischapterwilldiscussthevariousitemsaddressedintheRentRollwindow,including:
RentRoll
TenantInformation
BaseRent
RentChanges
RetailSales
Reimbursements
RentAbatements
LeasingCosts
SecurityDeposits

Rent Roll

Description:
TheRentRollwindowiswhereinformationisenteredforthepropertyscurrentleases.
TheRentRollwindowincludesthefollowingfields.Thefieldswillbediscussedinthe
followingsections.
Field Description
TenantName/Description Enterthenameofthetenantorclickthedropdownarrow
tochooseatenantfromtheTenantRegistry.
Suite Enteranalphanumericentry.
LeaseType Selectanoptionfromthedropdownlist.
OfficeThespaceisleasedtoanofficetenant.
RetailThespaceisleasedtoaretailtenant.
Industrialthespaceisleasedtoanindustrial
tenant.
PadSite*Thespaceisnotincludedintheproperty
sizeandwillnotaffecttheoccupancyoftheproperty.
Storage*Thespacewillnotaffecttheoccupancyof
theproperty.
*Note:ThesearecustomleasetypescreatedviatheGlobal
Categoriesfeature.Otherleasetypesmaybecreatedas
needed.
Page|48
LeaseStatus Specifywhethertheleaseiscontractorspeculative.
ContractThetenanthasasignedcontract.Thisis
thedefaultentry.
SpeculativeThetenantisaspeculativetenant.
*Note:Thisfieldentryisdesignedforreportingpurposes
toshowconsolidatednumbersforeachtypeoflease.The
fieldentrydoesnotchangethecalculationsforthetenant.
Size Enterthesizeoftheleasefortheinitialleaseterm.
StartDate Enterthedatewhentheleasebegins.Thedatemaybe
enteredasoneofthefollowingformats:
M/YYEnterthemonthandyearofthefirstmonth
ofthelease.
MEnterthemonthnumberoftheanalysiswhen
theleasebegins.
Term/Expire Enterthedatewhentheleaseexpires,orenterthe
numberofyearsforthetermofthelease.Theentrymay
beenteredasoneofthefollowingways:
M/YYEnterthemonthandyearofthelastmonth
ofthelease.
YYenterthenumberofyearsfortheleaseterm.
Thisentrymustbeawholenumberofyears.
Base/MinRent Specifythebaserentamountforthetenant.
UnitofMeasure Selecttheoptionthatcorrespondswiththeentryin
Base/MinRent.Thechoicesincludethefollowing:
$/SqFt./Year
$/SqFt./Quarter
$/SqFt./Month
$Amount/Year
$Amount/Quarter
$Amount/Month
%Market
RentChanges Specifyanyadditionalrentstobepaidbythetenant.The
categoriesthatmaybeappliedinRentChangesincludes
thefollowing:
StepRent
PortersWages
MiscellaneousRent
CPIRent
Parking
RetailSales Specifyanypercentagerentstobepaidbytheretail
tenant,includingretailsalesvolumeandbreakpoint
information.
Reimbursements Specifythecalculationmethodstoapplytoindividual
tenantleasesandindividualexpensesorexpensegroups
thatarereimbursedbythosetenants.
UnitofMeasure Ifafixedrecoveryamountisentereddinthe
Reimbursementsfield,selectanoptionthatcorresponds
withtheentry.
RentAbatements Specifythemonthsoffreerenttoabateforthetenantas
needed.
Page|49
LeasingCosts Specifythetenantimprovementsandleasingcommissions
forthetenantsleaseasneeded.
SecurityDeposit Specifythesecuritydepositsasneeded.Entera
refundabledepositamountorcreateacategoryforthe
tenantsrefundableandnonrefundablesecuritydeposits.
MarkingLeasing Createandselectacategorytodeterminethefuture
marketconditionsforthespace.
UponExpiration Specifyhowtocalculatethefuturemarketconditionsfor
thespace.
RenewalProbability Whencalculatingthemarketratesforrolloverleasesfora
space,enterarenewalprobabilityasneeded.
More/Notes Enternoncalculatedinformationregardingthetenantor
specifyuniquerentcollectionschedulesforindividual
tenantleases.

Tenant Information

Description:
TheRentRollwindowallowstheentryoftenantspecificinformationfortheleasesina
property.Tobegintheprocessforaddingatenant,startwiththebasicinformationfor
atenant.

Practice:
1. FromtheTenantmenu,selectRentRoll.
2. IntheRentRollwindow,clickInsert.
Field Entry
TenantName Tenant1
Suite 10F20F
LeaseType Office
LeaseStatus Contract
Size 259,880SqFt.
StartDate 1/08
Term/Expire 7years
Page|50
4. ProceedtothenexttopictoaddmoretenantinformationintheRentRoll.

Base Rent

Description:
TheBase/MinRentfieldallowstheentryofthetenantsbaserentamount.TheUnitof
MeasurefielddetermineshowARGUSValuationDCFinterpretsthenumberinthe
Base/MinRentfield.
Therentmaybeenteredasasimpleordetailedrent.Asimplerentisdefinedasaflat,
nonescalatingrentduringthetenantslease.
Detailedrentisabaserentwithscheduledchangesduringthetenantslease.The
changesmaybeenteredasaonetimechange,recurringchangesorannualpercentage
increases.

Practice:
EnterasimpleBaseRent:
Field Entry
Base/MinRent $10.00
UnitofMeasure $/SqFt./Month
Page|51

HowTo
EnteradetailedBaseRent:
1. ClicktheBase/MinRentdropdownarrow,andthenclickDetail.TheDetail
Base/MinRentwindowdisplays.
2. IntheDatefield,enterthedatewhentherenttakeseffect.Thedateformats
includethefollowing:
M/YYThemonthandyearwhentherentwilltakeeffect.
MThemonthnumberwithintheleasewhentherentwilltakeeffect.
3. IntheAmountfield,entertheamountofrent.
4. ClicktheUnitsdropdownarrow,andthenclicktheappropriateoption.This
selectioncorrespondswiththeenteredAmount.
5. Repeatsteps24toaddthenecessaryrentsforthetenant.
6. ClickOKtosavethebaserents.

Rent Changes

Description:
TheRentChangesfieldallowstheentryofadditionalrentsforatenantslease.The
changesenteredinthissectionwillbereportedontheirownlineonthetenantCash
Flowreports.
Page|52
RentChangesmaybecreatedforthefollowingcategories:
Field Description
StepRent MonetaryrentsinadditiontotheBase/MinRententered
forthetenant.
PortersWages Applyarentfortenantstopaythewagesforthebuildings
doormen.
*Note:Thisrentchangecategoryisusedprimarilyforthe
NewYorkCitymarket.
Miscellaneous Applyanadditionalrentbasedonapercentageofthe
tenantsrents.
CPIRent ApplyanincreaseintheConsumerPriceIndex(CPI)forthe
tenantslease.Theincreaseisbasedonthetenantsbase
rent,steprentandCPIrentthetenantpaidintheyear
precedingtheCPIincrease.
Parking Applytenantspecificparkingrentsinadditiontothe
Base/MinRententeredforthetenant.
TheseRentChangesareonlyappliedasneededforatenantlease.Whenthereareno
rentchanges,leavethisfieldblank.
HowTo
ApplyRentChanges:
1. ClicktheRentChangesdropdownarrow,andthenclickYes.
2. ClickthedropdownarrowfortheappropriateRentChangecategoryandclick
thedesiredcategory.
3. ClickOKtosavetheRentChangesforthetenant.

CreateaStepRentcategoryfromtheRentChangeswindow:
1. ClicktheStepRentfield.
2. ClickDetail.TheStepRentAdjustmentscategorywindowdisplays.
3. ClickNew.TheStepRentAdjustmentswindowdisplays.
4. IntheCategoryfield,enteranamefortheStepRent.
5. IntheDatefield,enterthedatewhentheadditionalrentwillbeapplied.The
dateformatsincludethefollowing:
M/YYthemonthandyearwhentheadditionalrentwillbeapplied.
Mthemonthnumberwithintheleasewhentheadditionalrentwillbe
applied.
6. IntheAmountfield,entertheamountofrenttoapplyinadditiontothebase
rent.Note:donotenterthefullamountofrent.
7. ClicktheUnitsdropdownarrow,andthenclicktheappropriateoption.This
selectioncorrespondswiththeenteredAmount.
8. Repeatsteps24toaddanyadditionalrentsforthetenantduringthelease.
9. ClickOKtosavethesteprents.TheStepRentAdjustmentscategorywindow
displays.
10. ClickClose.TheRentChangeswindowdisplays.
11. ClicktheStepRentdropdownarrow,andthenclickthedesiredStepRent
category.
12. ClickOKtosavetheStepRentforthetenant.
Page|53
CreateaCPIcategoryfromtheRentChangeswindow:
1. ClicktheCPIRentCategoryfield.
2. ClickDetail.TheCPIRentcategorywindowdisplays.
3. ClickNew.TheCPIRentwindowdisplays.
4. IntheCategoryfield,enteranamefortheCPIRent.
5. ClicktheCPIMethoddropdownarrow,andthenclicktheappropriateoptionfor
theCPIRent.ThisselectiontellsARGUSValuationDCFwhentoapplytheCPI
Renttothetenant.Thechoicesincludethefollowing:
LeaseYearapplytheCPIincreasesonceayear,ontheanniversarydate
ofthelease.
CalendarYearapplytheCPIincreasesinJanuaryofeveryyearofthe
lease
MidTermapplyaonetimeCPIincreaseatthemidpointofthelease,
basedonthetenantsbaserentandsteprentpaidinthefirsthalfofthe
lease.
TimeBasedapplyatimefactorwhentheCPIincreaseswillbeginand
betweenwheneachincreasewilltakeeffect.
IncreasedBasedapplyapercentageorindexpointincreasefactor
beforetheCPIRentiscalculated.
6. ClicktheInflationRate/Indexdropdownarrow,andthenclicktheappropriate
rate/indextousefortheCPIRentcalculation.ThedefaultintheCPIInflation,
referringbacktothecategorysetupintheInflationtableforthefile.
7. InthePercentPaidfield,enterthepercentageofCPIthatispayablebythe
tenant.Leavethisfieldblanktouse100%oftheCPIRent.
8. IntheMinimumIncreasefield,enterthestatedminimumincreasefortheCPI
rentandthenselectthefrequencyfortheincrease.
9. IntheMaximumIncreasefield,enterthestatedmaximumincreasefortheCPI
rentandthenselectthefrequencyfortheincrease.
10. ClickOK.TheCPIRentcategorywindowdisplays.
12. ClicktheCPIRentCategorydropdownarrow,andthenclickthedesiredCPI
Rentcategory.
13. ClickOKtosavetheCPIRentforthetenant.
ApplysimpleParkingrentsintheRentChangeswindow:
1. IntheSpacesfield,enterthenumberofspacesforthetenantslease.
2. IntheAmountfield,enterthemonthlyamountcollectedforeachspace.
3. ClickOKtosavetheParkingRentforthetenant.
Page|54
CreateaParkingcategoryfromtheRentChangeswindow:
1. ClicktheSpacesfield.
2. ClickDetail.TheTenantLevelParkingcategorywindowdisplays.
3. ClickNew.TheParkingSpaceswindowdisplays.
4. IntheCategoryfield,enteranamefortheParkingSpacesrent.
5. IntheTypefield,enteradescriptionforthetypeofspace.
6. IntheTotalSpacesfield,enterthenumberofspacestobecalculatedforrent.
7. Inthe$/Space/Monthfield,enterthemonthlyamountcollectedforeachspace.
8. Repeatsteps57foreachtypeofspacebeingrentedbythetenant.
9. ClickOK.TheTenantLevelParkingcategorywindowdisplays.
11. ClicktheSpacesdropdownarrow,andclicktheappropriateParkingRent
category.
12. ClickOKtosavetheParkingRentforthetenant.
CreateaRentChangescategoryoutsideoftheRentRollwindow:
1. FromtheCategoriesmenu,selecttheappropriatecategory:
StepRentAdjustments
CPIRents
MiscellaneousRents
ParkingSpaces
PortersWages
2. ClickNew.
3. Followtheinstructionsasdescribedabove.
4. Oncethecategoryhasbeensaved,itmaybeselectedfromtheappropriate
dropdownmenuintheRentChangeswindowwithintheRentRollwindow.

Retail Sales

Description:
TheRetailSalesfieldisusedforretailtenantswhereadditionalrentsarepaidbasedon
apercentageoftheirprojectedsales.
RetailSalesrent,orpercentageorturnoverrents,areonlyappliedasneededfora
tenantlease.Ifatenantisnotobligatedtopaypercentagerentsoryoudonotwishto
includepercentagerentsinyourvaluationorcashflowprojection,leavethisfieldblank.
Page|55
TherearethreeprimarycomponentstoRetailSales:
Field Description
SalesVolume Dollaramountthetenantprojectsforretailsaleseach
year.
Percentage Percentageofretailsalesabovethebreakpointwhichthe
tenantmustpaytothepropertyowner.
Breakpoint Amountofatenantsretailsalesvolumebelowwhicha
tenantdoesnotpayapercentage.Bydefault,anatural
breakpointiscalculatedbydividingtheannualbaserent
bytheretailsalespercentage.
Inadditiontothesethreecomponents,informationforsalesvolumes,breakpointsand
percentagesmaybeenteredingreaterdetail.Categoriesmaybecreatedtodefinethe
followingassumptions:
Accountforspecificsalesvolumeorsalesinflation.
Specifychangingbreakpointsandpercentages.
ExcludesteppedbaserentalrevenueorCPIrentinthecalculationofanatural
breakpoint.
HowTo
AddasimpleRetailSalescalculation:
1. ClicktheRetailSalesdropdownarrow,andthenclickYes.TheRetailSalesRent
Changeswindowdisplays.
2. IntheVolumefield,entertheprojectedannualsalesvolumeforthetenant.
3. Inthenextfield,clickthedropdownarrowandselecttheunitofmeasurefor
theenteredsalesvolume.
4. InthePercentfield,enterthepercentagetocalculatethepercentagerent.
5. IntheBreakpointfield,entera$/SqFtamountwhenthecalculationwillbeginor
leaveblanktocalculateanaturalbreakpoint.
6. ClickOK.
AddadetailedcategoryfortheSalesVolumeintheRetailSaleswindow:
1. ClicktheVolumefield,andthenclickDetail.TheRetailSalescategorywindow
displays.
2. ClickNew.
3. IntheCategoryfield,enterthenameforthecategory.
4. ClicktheVolumefield,andthenclickDetail.TheRetailSalesVolumecategory
windowdisplays.
5. ClickNew.
6. IntheCategoryfield,enteranameforthesalesvolumecategory.
7. IntheAnnualTotalfields,entertheamountofsalesvolumeprojectedforeach
year.
8. IntheInflationfield,enteraninflationtoapplyasneeded.
10. ClickClose.TheRetailSaleswindowdisplays.
11. ClicktheVolumedropdownarrow,andthenclicktheappropriatecategory.
12. Completetherequiredfields,andthenclickOK.
Page|56
Excludespecificrentsusedinthepercentagerentcalculation:
1. FollowthepreviousstepstocreateaSalesVolumecategory.
2. Toexcludesteprentfromthenaturalbreakpointcalculation,unchecktheStep
Rentcheckbox.
3. ToexcludeCPIrentfromthenaturalbreakpointcalculation,unchecktheCPI
Rentcheckbox.
4. Completetherequiredfields,andthenclickOK.
AddadetailedcategoryforthePercentorBreakpointintheRetailSalesVolume
category:
1. FollowthepreviousstepstocreateaSalesVolumecategory.
2. ClickthePercentfield,andthenclickDetail.TheRetailPercents/Breakpoints
3. ClickNew.TheRetailPercents/Breakpointswindowdisplays.
4. IntheCategoryfield,enteracategoryname.
5. ClickthePercentageRentCalculateddropdownarrow,andthenclickthe
appropriatecalculation.
Overanaturalbreakpointplusrentpercentagerentiscalculatedusinga
Naturalbreakpoint.
Overaspecifiedbreakpointlessrententeraspecificbreakpointforeach
tierofretailsalesforthepercentagerentcalculation.Note:Ifafieldinthe
Breakpointfieldisleftblank,thepercentagerentiscalculatedusingaNatural
breakpoint.
OverazerobreakpointlessrentPercentagerentiscalculatedforthe
wholeamountofthesalesvolume,andthenthebaserentissubtractedfrom
thetotal.Ifthecalculatedpercentagerentislessthanthebaserent,the
tenantwillonlypaythebaserent.
6. IntheDatefield,enterthedatewhenthespecificvolume,percentorbreakpoint
willbecalculated.
7. IntheVolumefield,enterthespecificsalesvolumeasneeded.
8. InthePercentfield,enterthenumbertobecalculatedforpercentagerent.
9. IntheBrkpntfield,enterthebreakpointasneeded.
10. Repeatsteps58foreachentryforthepercentagerentcalculations.
12. ClickClose.TheRetailSaleswindowdisplays.
13. ClickthePercentdropdownarrow,andthenclicktheappropriatecategory.
14. CompletetherequiredfieldsandthenclickOK.

Page|57
Reimbursements

Description:
TheReimbursementsfieldcalculateshowatenantwillpayfortheirportionofthe
reimbursableoperatingexpenses.
TheReimbursementfieldacceptsnumericentries,orsimplereimbursements.TheUnit
ofMeasurefieldwilldeterminehowthereimbursemententryiscalculated.
ThreepredefinedreimbursementmethodsareavailablefromtheReimbursements
dropdownarrow,seethefollowing:
Option Description
None Thetenantwillnotpayforoperatingexpensesduringthe
lease.
Net Thetenantwillpaytheproratashareofreimbursable
expensesbasedonthetenantsshareoftheproperty.For
example,ifthetenantoccupies4%ofthepropertysize,
thetenantwillpay4%ofthereimbursableexpenses.
BaseStop Thetenantwillpaytheproratashareofreimbursable
expensesoverabaseyearexpensestop.Thebaseyear
expensestopisthetotalexpensesinthefirstyearofthe
lease.Thetenantwillpaytheirshareofanyincreasesin
theexpensesafterthefirstyearofthelease.

Inadditiontotheseaboveoptions,DetailedReimbursementMethodsmaybecreated
todefinereimbursementsingreaterdetail.Thesecategoriesmaybecreatedforanyof
thefollowingsituations:
Specifydifferentreimbursementmethodsforindividualoperatingexpenses.
Specifydifferentbaseyearexpensestopsforindividualoperatingexpenses.
Groupindividualoperatingexpensestogetherforthereimbursement
calculation.
Excludeindividualoperatingexpensesfromthereimbursements.
Note:AllreimbursableoperatingexpensesshouldbecreatedintheReimbursable
ExpenseswindowpriortocreatingaDetailedReimbursementMethod.
Page|58
Practice:
Toaddasimplereimbursementcalculationforatenant:
Field Entry
Reimbursements $1.00
UnitofMeasure $/SqFt./Year

Alternatively,toaddapredefinedreimbursementmethodforatenant:
1. ClicktheReimbursementsdropdownarrow.
2. ClickthedesiredmethodortheDetailbuttontocreateamorecomplex
Reimbursementcategorywhichdefinestherecoverymethodsbyexpenseor
expensegroup.

Rent Abatements

Description:
TheRentAbatementfieldcalculatesanyconcessions,orfreerent,giventothetenant.
Simplerentabatementsareenteredasthenumberofmonthsthatthetenantwillnot
payrent.Severaldefaultsareappliedwhenthenumberofabatedmonthsfor
abatementisenteredforthetenant:
Entertherentabatementsinwholemonths.
Allmonthsfortherentabatementsareappliedatthestartdateforthetenants
lease.
TherentabatementisbasedonthebaserentandCPIrent.

Page|59
Categoriesmaybecreatedtoenterdetailedrentabatementinformation.These
categoriesmayaccountforanyofthefollowingsituations:
Rentabatementsarestaggeredthroughthelease.
Rentabatementsarebasedonaportionoftherent.
Rentabatementsaremodifiedtobebasedonspecifictypesofrentchargesor
reimbursements.

HowTo
Addasimplerentabatement:
1. ClicktheRentAbatementfield.
2. Enterthenumberofmonthstoabate.
CreateadetailedrentabatementfromtheRentRollwindow:
1. ClicktheRentAbatementfield,andthenclickDetail.TheRentAbatements
2. ClickNew.TheRentAbatementswindowdisplays.
3. IntheCategoryfield,enteranameforthecategory.
4. IntheDatefield,enterthemonthwithintheleasewhentherentabatementwill
beapplied.
5. InthePercentfield,enterthepercentageofrenttobeabated.
6. IntheMonthsfield,enterthenumberofmonthsforwhichtheabatementswill
beapplied.
8. ClickClose.TheRentRollwindowdisplays.
9. ClicktheRentAbatementsdropdownarrow,andthenclicktheappropriate
rentabatementcategory.
Page|60
Createamodifierforarentabatementcategory:
1. Followthestepsinthepreviousprocesstocreatearentabatementcategory.
2. ClicktheModifierfield,andthenclickDetail.TheRentAbatementModifier
3. ClickNew.TheRentAbatementModifierwindowdisplays.
5. Clickthecheckboxesfortherentstoincludeforabatements.
6. Foreachselectedrent,enterthepercentagetobeabated.Leavethemodifier
fieldblanktoassume100percentabatement.
8. ClickClose.TheRentAbatementcategorydisplays.
9. ClicktheModifierfield,andthenclicktheappropriatecategory.
10. ClickOKtosavetherentabatementcategory.

Leasing Costs

Description:
TheLeasingCostsfieldallowstheentryoftenantimprovementsandleasing
commissions.Simpleentriesfortenantimprovementsincludethefollowingfields:
Field Description
Amount ThenumbertobecalculatedforTenantImprovements
Units Thechoicesincludethefollowing:
$/SqFt.
$Amount
Simpleentriesforleasingcommissionsincludethefollowingfields:
Field/Option Description
Amount ThenumbertobecalculatedforLeasingCommissions
Units Thechoicesincludethefollowing:
PercentBasedonthetotalbaserent,steprent
andrentabatementsfortheterm
$/SqFt.
$Amount
#ofMonths
Page|61
Ifnecessary,categoriesmaybecreatedtoenterdetailedinformationforeitherleasing
cost.LeasingCommissionscategoriesallowtheentryofveryspecificmethodsfor
calculatingthecommission.TheLeasingCommissionwindowincludesthefollowing
fieldsandoptions:
Field Description
Category Enterthenameforthecategory.
BasedOn Selectanexistingcategoryonwhichtobasethecurrent
category.
PaymentMade Selecthowthecommissionswillbeappliedinthereports.
UnitofMeasure Selectthemethodhowthecommissionwillbecalculated.
Theoptionsinclude:
PercentBasedonthetotalbaserent,steprent
andrentabatementsfortheterm
$/SqFt.
LeaseYear%Calculatesspecificpercentagesof
therentsforspecificyearswithintheterm
1
st
Mo+%remainCalculatesaspecific
percentageofthefirstmonthsrents,plusaflat
percentageoftheremainingrentsfortheentire
term
1
st
Yr+%Mkt.ReviewCalculatesaspecific
percentageforthefirstyearsrents,plusa
percentageofrentincreasesfortheremaining
leaseyears
#ofMonths
$Amount
New Entertheappropriatenumberinthefirstcell.Leasing
commissionsfornewleaseswillbecalculatedwiththese
numbers.Repeatorextendtheentriesasneeded.
*Note:Thecolumnheadingsmaychangebasedonthe
selectedUnitofMeasure.
Renewal Entertheappropriatenumberinthefirstcell.Leasing
commissionsforrenewalleaseswillbecalculatedwith
thesenumbers.Repeatorextendtheentriesasneeded.
*Note:Leavetherenewalcellsblanktousethesame
numbersenteredontheNewrow.Ifleasingcommissions
willnotbecalculateduponrollover,enter0intheRenewal
cells.
Include Selecttherentcheckboxestobeincludedintheleasing
commissioncalculation.Unchecktherenttypestobe
excludedintheleasingcommissioncalculation.
*Note:TheIncludesectionmaynotbeavailablebased
ontheselectedUnitofMeasure.

Page|62

HowTo
Entersimpleleasingcosts:
1. ClicktheLeasingCostsdropdownarrow,andthenclickYes.
2. IntheTenantImprovements:Amountfield,enterthenumberforthetenant
improvements.
3. ClicktheTenantImprovements:Unitsdropdownarrow,andclickthe
appropriateunitfortheenterednumber.
4. IntheLeasingCommissions:Amountfield,enterthenumberforthe
commissioncalculation.
5. ClicktheLeasingCommissions:Unitsdropdownarrow,andclickthe
appropriateunitfortheenterednumber.
6. ClickOK.TheRentRollwindowdisplays.
CreateadetailedTenantImprovementcategoryfromtheLeasingCostwindow:
1. ClicktheTenantImprovements:Amountfield,andthenclickDetail.TheTenant
Improvementscategorywindowdisplays.
2. ClickNew.TheTenantImprovementswindowdisplays.
4. ClicktheUnitofMeasuredropdownarrow,andclicktheappropriateoption.
5. IntheNewrow,entertheamountoftenantimprovementsintheappropriate
years.Note:Ifanewleasebeginsinaparticularyear,theleasewillbe
calculatedwiththeenteredtenantimprovements.
6. IntheRenewrow,entertheamountoftenantimprovementsintheappropriate
years.Note:Ifarenewalleasebeginsinaparticularyear,theleasewillbe
calculatedwiththeenteredtenantimprovements.
7. IntheInflationrow,entertheamountofinflationtoapplytotheentered
amountsasnecessary.
9. ClicktheTenantImprovements:Amountdropdownarrow,andthenclickthe
appropriatecategory.
Page|63
Practice:
CreateadetailedTenantImprovementcategoryfromtheLeasingCostwindow:
1. ClicktheLeasingCostfield,selectYes.TheLeasingCostwindowdisplays.
2. ClicktheLeasingCommissions:Amountfield,andthenclickDetail.TheLeasing
Commissionscategorywindowdisplays.
3. ClickNew.TheLeasingCommissionswindowdisplays.
Field Entry
Category 100pctMo1+2pct
UnitofMeasure 1
st
Mo+%remain
New 1
st
Month=100,%Rest=2
Renewal 1
st
Mo=0,%Rest=0
Include UnchecktheFreeRentcheckbox.
UnchecktheStepRentcheckbox.
6. ClickClose.
7. ClicktheLeasingCommissions:Amountdropdownarrow,andthenselectthe
appropriatecategory.
8. ClickOK.TheRentRollwindowdisplays.
9. Oncealltheinformationhasbeenadded,clickClose.

Page|64
Security Deposits

Description:
SecurityDepositcategoriesareusedtospecifyrefundableandnonrefundabledeposits
forleases.Thesecategoriesmaybeappliedtoleasetermsonthetenantrentroll,space
absorptionandmarketleasingassumptionsscreens.

TheSecurityDepositcategorywindowincludesthefollowingfields:
Field Description
Category Enterthenameofthecategory
NonRefundableDeposit Entertheamountofdepositthatisnotrefundableupon
leaseexpiration.
UnitofMeasure Specifyhowthedepositamountwillbecalculated:
$Amount
$/SqFt
MonthsAnumberofmonthsmultipliedbythe
baserentforthefirstmonthofthelease
RefundableDepositAmount Entertheamountofdepositthatisrefundabletothe
tenantuponleaseexpiration.
UnitofMeasure Specifyhowthedepositamountwillbecalculated.Refer
tothenonrefundableunitsofmeasurefordescriptions.
InterestRate Enterarateatwhichinterestisearnedonthedeposit
balance.
PercenttoRefund Enterapercentageofthesecuritydepositamountto
refunduponleaseexpiration.Thedefaultentryis100%.

Page|65
HowTo
CreateaSecurityDepositcategoryfromtheRentRollwindow:
1. ClicktheSecurityDepositfield,andthenclickDetail.TheSecurityDeposits
2. ClickNew.TheSecurityDepositswindowdisplays.
4. AddtheNonRefundabledepositinformation.
5. AddtheRefundabledepositinformation.
7. ClickClosetoreturntotheRentRollwindow.
AddaSecurityDeposittoalease:
1. ClicktheSecurityDepositdropdownarrow.
2. Selecttheappropriatecategory.

ChapterSummary:
CurrenttenantinformationisenteredintheRentRollwindowinARGUSValuationDCF.
ThischapterdefinedanddemonstratedthevariousitemsaddressedintheRentRoll
window,includingaddingbasictenantinformation,simpleanddetailedbaserent,retail
sales,expensereimbursementoptions,rentabatements,leasingcosts,andsecurity
deposits.
Page|66
Chapter 5
Market Leasing Assumptions

Objectives
MarketLeasingAssumptionscontrolwhathappenstoaspaceafterthecurrentlease
termexpiresanditgoestomarket.Thischapterwilldiscussthevariousitems
addressedintheMarketLeasingAssumptions,including:
MarketLeasingAssumptions
RenewalProbabilitiesandWeightedItems
ChangingBaseRents
OtherNonWeightedItems
TermOverrides
*OpentheRentRollwindowpriortoreviewingthefollowingtopics.

Market Leasing Assumptions

Description:
MarketLeasingAssumptionscontrolwhathappenstoaleaseafteritexpiresandgoesto
market.AlltheparametersformarketconditionsareenteredinMarketLeasing
Assumptions.
AllleasesintheRentRollwindowmusthaveaMarketLeasingAssumptioncategory
assigned.Oncealeaseexpires,ARGUSValuationDCFcalculatesfuturelease
informationfromtheinputsintheMarketLeasingAssumptioncategory,notfromthe
RentRoll.
TheMarketLeasingAssumptioncategorywindowincludesthefollowingfields:
Field Description
Category Enterthenameofthecategory
LeaseStatus ThedefaultentryisSpeculative.
RenewalProbability Enteraprobabilitythatanexpiringtenantwillrenewthe
lease.Thisprobabilityfactorwillcalculatethemarket
averages.
MarketRent Enterthemarketrentsforanewleaseandarenewal
lease.
MonthsVacant Enterthenumberofmonthsprojectedforthedowntime
betweentheexpiringleaseandthenewlease.
TenantImprovements Selectacategoryorenterthenumbertobecalculatedfor
tenantimprovementsforanewleaseandarenewallease.
LeasingCommissions Selectacategoryorenterthenumbertobecalculatedfor
leasingcommissionsforanewleaseandarenewallease.
Page|67
RentAbatements Selectacategoryorenterthenumbertobecalculatedfor
rentabatementsforanewleaseandarenewallease.
SecurityDeposit Selectacategorytobecalculatedforsecuritydepositsfor
anewleaseandarenewalleaseorenterrefundable
depositsasanumberofrentsmonths.
RentChanges Specifyanyadditionalrentsfortherollovertenantslease.
Therentchangescategoriesincludethefollowing:
ChangingBaseRentApplypercentageincreases
tothebaserent.
StepRentApplymonetaryincreasestothebase
rent.
PortersWagesTypicallyonlyusedintheNew
YorkCitymarket.
MiscellaneousApplyadditionalrentsbasedon
percentagesofotherrents.
CPIIncreasesApplypercentageincreasestothe
baserent.
ParkingThedefaultentryisContinuePrior.
RetailSales Specifythepercentagerentstobecalculatedforthe
rolloverlease.
Reimbursements Specifyhowtherolloverleasewillpayfortheirshareof
thereimbursableoperatingexpenses.Selectamethodor
enteranumbertobecalculatedforreimbursements.
TermLengths Specifythelengthoftherolloverlease.Theentrymaybe
enteredasnumberofyearsornumberofmonths.

Page|68
Practice:
TocreateaMarketLeasingAssumptionfromtheRentRollwindow:
1. ClicktheMarketLeasingfield.
2. ClickDetail.TheMarketLeasingAssumptionscategorywindowdisplays.
3. ClickNew.TheMarketLeasingAssumptionswindowdisplays.
Field Entry
Category OfficeMarket
5. ToaddmoreinformationintheMarketLeasingAssumptioncategory,proceedto
thenexttopic.

Renewal Probabilities and Weighted Items

Description:
Whencreatingamarketleasingassumption,parametersareassignedforbothNew
MarketconditionsandRenewalMarketconditions.ARGUSValuationDCFwillcreatea
marketratefromtheNewMarketentriesandtheRenewalMarketentries.Thismarket
calculationisusedforeachoftheweighteditemsinthefirsthalfoftheMarketLeasing
Assumptionwindow.
Thecalculationforthemarketrate,alsocalledtheweightedaverage,isbasedonthe
entryintheRenewalProbabilityfield.Forexample,iftherenewalprobabilityis80%,
then80%oftheRenewalMarketnumbersareaddedto20%oftheNewMarket
numbers.

Note:AnyblankRenewalMarketfieldisautomaticallycalculatedwiththesame
numberenteredinthecorrespondingNewMarketfield.
Page|69

Practice:
ContinuingwiththeMarketLeasingAssumptioncategory,completethefollowingsteps:
Field Entry
RenewalProbability(Renewal
Mktcolumn)
80
MarketRent NewMarket=$10/SqFt./Month
RenewalMkt=ClicktheRenewalMktdropdown
arrow,andthenclickUseLastRent.
MonthsVacant NewMarket=5
TenantImprovements NewMarket=$25/SqFt.
RenewalMarket=$5/SqFt.
LeasingCommissions ClicktheNewMarketdropdownarrowandselect
100pctMo1+2pct.
RentAbatements NewMarket=2
RenewalMarket=0
thenexttopic.

Changing Base Rents

Description:
ThemarketrentinamarketleasingassumptionareinflatingbytheMarketRent
inflationratewhilethemarketleasingassumptionisnotinaffect.Oncetherollover
leasebegins,themarketrentsarelockedinatthecurrentmarketrate.
Ifpercentageinflationsaretooccurduringarolloverlease,aChangingBaseRent
categorymustbeappliedtotheMarketLeasingAssumption.Thiscategoryisfoundin
theRentChangesfield.
Achangingbaserentisnotaweighteditem.Thechangingbaserentisappliedtothe
rolloverleaseregardlessoftheNeworRenewalstatusofthetenant.
Page|70
HowTo
ChangeBaseRents:
1. IntheMarketLeasingAssumptionwindow,clicktheRentChangesfield,and
thenclickDetail.TheRentChangeswindowdisplays.
2. ClicktheChangingBaseRentfield,andthenclickDetail.TheChangingBase
Rentcategorywindowdisplays.
3. ClickNew.TheChangingBaseRentwindowdisplays.
5. IntheDatefield,enter1.
6. IntheAmountfield,enter100.
7. ClicktheUnitsdropdownarrow,andthenclick%Market.
8. InthenextDatefield,enterthemonthnumberoftheleasewhenthechange
willtakeeffect.
9. IntheAmountfield,entertheamountforthepercentageincrease.
10. ClicktheUnitsdropdownarrow,andthenselecttheappropriatepercentage
increase.
11. Repeatsteps810asneeded.
14. ClicktheChangingBaseRentdropdownarrow,andthenclicktheappropriate
category.
15. ClickOK.

Other Non-Weighted Items

Description:
ThebottomhalfoftheMarketLeasingAssumptionswindowincludesthenonweighted
items.Anyoftheseitemappliedtothemarketleasingassumptionwillcalculateinthe
rolloverleaseregardlessoftheNeworRenewalstatusofthetenant.
Similartothemaintenantinformation,categoriesfortheseitemsmaybecreatedby
clickingDetailfromthedesiredfield.

HowTo
AddRentChangestoaMarketLeasingAssumption:
1. ClicktheRentChangesfield,andthenclickDetail.TheRentChangeswindow
displays.
2. Clicktheappropriatecategorydropdownarrow,andclickthedesiredcategory
toapply.
3. ClickOK.TheMarketLeasingAssumptionwindowdisplays.
Page|71
AddRetailSalescategorytoaMarketLeasingAssumption:
1. ClicktheRetailSalesdropdownarrow.
2. Clickthedesiredcategorytoapply.
Practice:
SpecifyReimbursementstobecalculatedwithinaMarketLeasingAssumption:
1. ClicktheReimbursementsdropdownarrow,andthenclickthedesiredmethod
forreimbursementscalculation.
OR
IntheReimbursementsfield,enterthenumbertobecalculatedfor
reimbursements.
Field Entry
Reimbursements BaseStop
thenextsection.

Practice:
Specifythelengthoftherolloverlease:
1. FromtheMarketLeasingAssumptionswindow,locatetheTermLengthfield.
2. Enterthenumberofmonthsornumberofyearsfortherolloverlease.
Field Entry
TermLength 5Years
5. ClickClose.TheRentRollwindowdisplays.
6. ClicktheMarketLeasingdropdownarrowandselectOfficeMarket.
ProceedtothenextchaptertosetuptheremainingfieldsforthetenantsintheRent
Roll.

Page|72
Term Overrides

Description:
Bydefault,thedatainMarketLeasingAssumptionsisappliedtoallrollovertermsfora
lease.SpecificdatamaybecalculatedforaparticularrollovertermbyusingOverrides.
TheTermoverridecolumnallowstheentryforthevariousaspectsoftheMarket
Leasingassumption.Theseoverridesmaybeappliedtooneormanyrolloverterms.
Theenteredoverrideamountsarenotinflatedandarenotweightedbytherenewal
probability.AnyblankfieldsintheoverridecolumnswilldefaulttotheoriginalMarket
LeasingAssumptionvalues.

HowTo
Addtermoverrides:
1. IntheMarketLeasingAssumptionwindow,clickOverride.Thewindowexpands
todisplayTermoverridecolumns.
2. AddthedesiredoverrideamountsinthedesiredTermoverridecolumns.
3. ClickOKtosavetheinformation.

ChapterSummary:
MarketLeasingAssumptionscontrolwhathappenstoaleaseafteritexpiresandgoesto
market.ThischapterdefinedanddemonstratedvariousitemsintheMarketLeasing
Assumptions,includingRenewalProbabilitiesandWeightedItems,ChangingBaseRents,
OtherNonWeightedItems,andTermOverrides.
Page|73
Chapter 6
Remaining fields in the Tenant Rent Roll

Objectives
ThischapterwilldiscusstopicsfortheremainingfieldsintheRentRoll,including:
UponExpiration
IntelligentRenewals
RenewalProbabilityOverrides
TenantNotes
*OpentheRentRollwindowpriortoreviewingthefollowingtopics.

Upon Expiration

Description:
TheUponExpirationfielddetermineswhathappenstothespacewhenthecurrent
leaseexpires.TheselectionwilltellARGUSValuationDCFhowtocalculatethefuture
numbersfromtheassignedmarketleasingassumption.
TheUponExpirationfieldincludesthefollowingchoices:
Option Description
Market Thespacewillbeleasedaccordingtotheweighted
averageparametersintheassociatedmarketleasing
assumption.
Renew Thespacewillbeleasedaccordingtotherenewal
parametersintheassociatedmarketleasingassumption.
Vacate Thespacewillbeleasedaccordingtothenewparameters
intheassociatedmarketleasingassumption.
Option Thespacehasanoptionleaseavailable.Anoptionisthe
continuationoftheoriginallease.Themarketleasing
assumptionwillbeignoredforthefirstrolloverterm.
ReAbsorb Revenuefromthisspaceendswhentheleaseexpires.
NonContiguous LinkmultiplelinesontheRentRollintoonelease.Apply
themarketleasingassumptionfortheleaseinthelastline
ofthegroup.
Page|74
Practice:
1. ClicktheUponExpirationdropdownarrow,andclicktheappropriateoption.
Field Entry
UponExpiration Market

Intelligent Renewals

Description:
IntelligentRenewalscategoriesmaybecreatedtoprovideflexibilityindeterminingthe
projectedbaserentforspeculativeleaserenewals.Thesecategoriesallowtherenewal
renttobedeterminedbyacomparisonofcurrentorcontractrentstomarket.Italso
allowstheprojectedrenttobebasedonablendedratecomprisedofapercentageof
currentorcontractrentandmarket.

Renewal Probability Overrides

Description:
TheRenewalProbabilityfieldisusedtooverridetherenewalprobabilityentryinthe
associatedmarketleasingassumption.Thisentrydeterminesatwhatprobabilitythe
weightedaverageswillbecalculated.
Thisfieldprovidestenantbytenantcontroloftherollovermarketcalculationswithout
creatingalargenumberofmarketleasingassumptioncategories.

HowTo
OverrideRenewalProbabilities
1. VerifytheUponExpirationfieldissettoMarket.
2. IntheRenewalProbabilityfield,entertherenewalprobabilitytouseforthe
tenant.

Page|75
Tenant Notes

Description:
TheMore/Notesfieldallowsadditionalnoncalculatedinformationtobeenteredfor
thetenant.TheNoteswindowallowstheentryforthefollowingitems:
Field Description
Floor Enterthefloornumberforthetenant.Thisfieldmaybe
usedfor:
Tenantselectioncriteriainportfolioproperties.
Sortcriteriainallproperties.
Stackingplanreports.
SICCode EntertheStandardIndustryCodeforthetenant.Thisfield
maybeusedfor:
Tenantselectioncriteriainportfolioproperties.
Sortcriteriainallproperties.
LeaseReference Enterauniquetenantreference.Thisfieldisusedby
ARGUSValuationDCFtomatchtenantrecordsto
importeddatafromRealmX,CONNECTorreXML.
RentCollection SelectStandardformonthlyrentpaymentsorcreatea
detailedcategorytodescribeaquarterly,semiannuallyor
otheruniquerentpaymentschedule.
TenantID Thisfielddisplaystheuniquetenantidentifierassociated
withthisleaseasenteredontheTenantRegistry.
IndustryGroup Ifindustrygroupsarecreated,thetenantmaybeassigned
toanindustrygroupbyselectingthegroupfromthedrop
downlist.
UserDefined1 Ifuserdefinedgroupsarecreated,thetenantmaybe
assignedtoagroupbyselectingthegroupfromthedrop
downlist.
UserDefined2 Ifuserdefinedgroupsarecreated,thetenantmaybe
assignedtoagroupbyselectingthegroupfromthedrop
downlist.
Notes Enternotesaboutthetenant.Thesenotesmaybeprinted
onreports.
HowTo
AddNotestotheRenewalProbabilities
1. ClicktheMore/Notesdropdownarrow,andclickDetail.TheNoteswindow
displays.
2. Enterthedesiredinformationforthetenant.
3. ClickOKtosavethenotes.
4. RepeatthestepsinthepreviouschapterstoaddadditionaltenantsintheRent
Rollwindow.
5. ClickClosetosavethetenantinformationandclosetheRentRollwindow.

Page|76

ChapterSummary:
OncetheMarketLeasingAssumptionsareinplace,specifywhatwilloccurwheneach
tenantleaseends.ThischapterexplainedthesefieldsintheRentRoll,including:Upon
ExpirationOptions,IntelligentRenewals,RenewalProbabilityOverrides,andAdditional
Notes.
Page|77
Chapter 7
Space Absorption

Objectives
TheSpaceAbsorptionwindowisusedtomodelleaseupprojectionsforvacantspace.
ThischapterwilldiscussthevariousitemsaddressedintheSpaceAbsorptionwindow,
including:
SpaceAbsorption
SpaceInformation
AbsorptionParameters
ProjectionLeaseTerms
AdditionalInformation

Space Absorption

Description:
WhiletheSpaceAbsorptionwindowissimilartotheTenantRentRoll,itdoesdifferina
fewkeyways.TheSpaceAbsorptionwindowallowsthecreationofmultipleleaseswith
staggeredleasestartdatesonasinglelineofinput.
TheSpaceAbsorptionwindowincludesthefollowingfields:
Field Description
SpaceDescription Enteradescriptionforthelineentry.
LeaseType Selectanoptionfromthedropdownlist.
OfficeThespaceisleasedtoanofficetenant.
RetailThespaceisleasedtoaretailtenant.
Industrialthespaceisleasedtoanindustrial
tenant.
PadSite*Thespaceisnotincludedintheproperty
sizeandwillnotaffecttheoccupancyoftheproperty.
Storage*Thespacewillnotaffecttheoccupancyof
theproperty.
*Note:Thesearecustomleasetypescreatedviathe
GlobalCategoriesfeature.
LeaseStatus Specifywhethertheleasesarecontractorspeculative.
ContractThetenanthasasignedcontract.
SpeculativeThetenantisaspeculativetenant.This
isthedefaultentry.
TotalArea Enterthetotalamountofspaceforthelineentry.
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DateAvailable Enterthedatewhenthetotalareaisfirstvacant.Thedate
maybeenteredasoneofthefollowingformats:
ofvacancy.
thespaceisfirstvacant.
BeginLeasing Enterthedatewhenthefirstleasewillbecreated.The
datemaybeenteredasoneofthefollowingformats:
ofthefirstlease.
thefirstleasebegins.
#/SizeLeases Enterthesizeforeachlease.Thesizemaybeenteredas
oneofthefollowingformats:
#Enterthenumberofleasestobecreatedfromthe
totalarea;eachleasewillbeanequalsize.
SizeEntertheareasizeforeachlease;leaseswillbe
createdwiththissize,andanyremainingsizewillbe
includedinasmallerlease.
CreateLeases Determinehowoftentheleaseswillbecreated,starting
fromtheBeginLeasingdate.
MonthlyCreateoneleaseeverymonth.
QuarterlyCreateoneleaseeverythreemonths.
SemiAnnuallycreateoneleaseeverysixmonths.
AnnuallyCreateoneleaseevery12months.
Term/Expire Enterthedatewhentheleaseexpires,orenterthe
numberofyearsforthetermofthelease.Theentrymay
beenteredasoneofthefollowingways:
M/YYEnterthemonthandyearofthelastmonth
ofthelease.Allleasescreatedfromthislineentry
wouldendatthisdate.
YYEnterthenumberofyearsfortheleaseterm.
Thisentrymustbeawholenumberofyears.Each
leasewillbeequalinlength,regardlessofwhenthe
leasesstart.
Base/MinRent Specifythebaserentamountforthetenant.
UnitofMeasure Selecttheoptionthatcorrespondswiththeentryin
Base/MinRent.Thechoicesincludethefollowing:
$/SqFt./Year
$/SqFt./Quarter
$/SqFt./Month
$Amount/Year
$Amount/Quarter
$Amount/Month
%Market
Page|79
RentChanges Specifyanyadditionalrentstobepaidbythetenant.The
categoriesthatmaybeappliedinRentChangesincludes
thefollowing:
StepRent
PortersWages
MiscellaneousRent
CPIRent
Parking
RetailSales Specifyanypercentagerentstobepaidbytheretail
tenant.
Reimbursements Specifythecalculationtousewhenreportingthetenants
shareoftheoperatingexpensesforreimbursement.
UnitofMeasure IfanamountisenteredintheReimbursementsfield,
selectanoptionthatcorrespondswiththeentry.
RentAbatements Specifythemonthsoffreerenttoabateforthetenantas
needed.
LeasingCosts Specifythetenantimprovementsandleasingcommissions
forthetenantsleaseasneeded.
SecurityDeposit Specifythesecuritydepositsasneeded.Entera
refundabledepositamountorcreateacategoryforthe
tenantsrefundableandnonrefundablesecuritydeposits.
MarkingLeasing Createandselectacategorytodeterminethefuture
marketconditionsforthespace.
UponExpiration Specifyhowtocalculatethefuturemarketconditionsfor
thespace.
RenewalProbability Whencalculatingthemarketratesforrolloverleasesfora
space,enterarenewalprobabilityasneeded.
More/Notes Enternoncalculatedinformationregardingthetenant.

Foradditionalfielddescriptions,seetheRentRollchapter.

HowTo
DisplaytheSpaceAbsorptionwindow
1. FromtheTenantmenu,selectSpaceAbsorption.
2. TheSpaceAbsorptionwindowdisplays.

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Space Information

Description:
TheprocessforaddingbasicinformationforspaceabsorptionisverysimilartotheRent
Roll.However,additionalinformationisneededforspaceabsorption,includingthe
totalareaanddatesforleasing.

Practice:
1. IntheSpaceAbsorptionwindow,clickInsert.
2. IntheSpaceDescriptionfield,enteradescriptionforthelineentry.
3. ClicktheLeaseTypedropdownarrow,andthenclicktheappropriatetype.
4. ClicktheLeaseStatusdropdownarrow,andthenclicktheappropriatestatus.The
defaultentryforthefieldisSpeculative.
5. IntheTotalAreafield,enterthetotalmeasurementforthelineentry.Thisentry
willbedividedintosmallerleases,asneeded.
6. IntheDateAvailablefield,enterthedatewhenthetotalareaisfirstvacant.
7. IntheBeginLeasingfield,entertheprojecteddatewhenthefirstleasewouldbegin.
Field Entry
SpaceDescription VacantSpace
LeaseType Office
LeaseStatus Speculative
TotalArea 227,840SqFt.
DateAvailable 7/08
BeginLeasing 8/08

Page|81
Absorption Parameters

Description:
Withspaceabsorption,severalparametersareneededtodeterminehowmanyleases
tocreateandhowoftentocreatetheleases.

Practice:
1. Inthe#/SizeLeasesfield,specifyhowthetotalareawillbedivided.Enteranumber
ofleasestocreate,orenterafixedmeasurementforeachlease.
2. ClicktheCreateLeasesdropdownarrow,andthenclicktheappropriateoptionto
staggertheleasestartdates.Thestaggerfrequencywilloccurfromthedateinthe
BeginLeasingfield.
3. IntheTerm/Expirefield,specifythelengthfortheleases.
Field Entry
#/SizeLeases 12leases
CreateLeases Monthly
Term/Expire 5

Projection Lease Terms

Description:
TherentforeachleaseisdeterminedintheBase/MinRentfield.Ifprospectivetenants
arenotknownatthetimeofprojection,rentsshouldbecalculatedfromthemarket
ratesforthelineentry.ThemarketratesarecalculatedfromtheMarketLeasing
Assumptionassociatedwiththelineentry.Otherleaseterms,suchasreimbursements,
rentabatementsandleasingcostsarespecifiedusingmethodssimilartoinputs
previouslydescribedontheRentRollandMarketLeasingAssumptions.

Page|82
Practice:
1. IntheBase/MinRentfield,enteranumberfortherentalrateorapercentageofthe
marketrenttobecalculated.Note:Ifthisfieldisleftblank,thesystemwillcalculate
100%ofthemarketrateasthebaserent.
2. ClicktheUnitofMeasuredropdownarrow,andthenclicktheappropriateunitof
measurefortheBase/Minrententered.
3. ClicktheReimbursementsdropdownarrow,andchoosetheappropriatecategory,
enterareimbursementAmountorStop,orclickDetailtocreateaDetailed
ReimbursementMethod.
4. IntheRentAbatementsfield,enterthenumberofmonthsfreerentorclickthe
Detailbuttontocreateafreerentcategory.
5. IntheLeasingCostsfield,clickthedropdownarrowandselectYestoenterTenant
ImprovementsandLeasingCommissions.
6. IntheMarketLeasingassumptionsfield,clickthedropdownarrowandchoosethe
appropriateMarketLeasingAssumptionscategory,orclickDetailtocreateanew
one.
7. IntheUponExpirationfield,clickthedropdownarrowandchoosetheappropriate
renewalassumptionorclickDetailtocreateanIntelligentRenewalcategory.
Field Entry
Base/MinRent 100%
UnitofMeasure %Market
Reimbursements BaseStop
RentAbatements 2Months
TenantImprovements $25.00/SqFt.
LeasingCommissions 100pctMo1+2pct
MarketLeasing Market
8. ClickClose.

Page|83
Additional Information

Description:
TheremainingfieldsaremirroredfromtheRentRollwindow.Entriesinthesefieldswill
beappliedtoallleasescreatedfromthelineentry.
AsdescribedintheRentRollchapter,categoriesmaybecreatedforthesefields.

HowTo
EnteradditionalSpaceAbsorptioninformation:
1. Entertheneededinformationtocompletethelineentry.
2. Repeatallstepstoaddadditionallineentriesasneeded.
3. ClickClosetosavetheinformationandclosetheSpaceAbsorptionwindow.

ChapterSummary:
ThischapterexplainedhowtoleasevacantspaceintheSpaceAbsorptionwindow
includingspecifyingtheavailableareaanddates,determiningthenumberofleases,
creatingstaggeredstartdates,andspecifyingbaserentforprojections.
Page|84
Chapter 8
Property Purchase and Resale

Objectives
OncetheRentRollandSpaceAbsorptionhavebeenpopulated,apropertyresale
methodshouldbeselectedtocompletethecashflowprojectionfortheholdingperiod.
ApropertypurchasepricemaybeenteredtocalculateIRRandcashoncashreturnsfor
theinvestment.Thissectionaddresseshowthepropertypurchaseandresaledataare
entered.
MaterialcoveredinthischapterincludesdescriptiveinformationabouttheProperty
Purchaseoptions,includingInitialAmount,CurrentValueandModifiedInternalRateof
Return.Aswellasinformationregardingresalemethods,includingcalculationoptions,
terminalcapitalizationrateandcapitalizationratematrix.
PropertyPurchase
PropertyResale
Property Purchase

Description:
ThePropertyPurchasewindowiscomprisedoftwosections:PropertyPurchasePrice
andCurrentValueforinternalrateofreturn(IRR)calculations.
ThePropertyPurchasePricesectionallowstheentryofasimplepurchasepriceora
detailedpurchaseprice.Thecalculateddirectcapitalizedvaluemayalsobeusedasthe
purchaseprice.
TwofieldsareavailableinthePropertyPurchasePricesection:
Field Description
InitialAmount Enteraspecificpurchasepricefortheproperty.Theentry
shouldrepresenttheamountinvestedattheanalysisstart
dateorthroughouttheanalysis.ClickDetailtoaddmultiple
itemsthatcontributetowardthepurchaseprice.
*Note:Ifthisfieldisleftblank,ARGUSValuationDCFcannot
determinetheinternalrateofreturn.
DirectCapValueasof
AnalysisStart
SelectthisoptiontousetheDirectCapitalizedValueasthe
initialpurchaseprice.Whenthisoptionisselected,ARGUS
ValuationDCFusesthecalculatedpropertyvalueasthe
purchasepricefortheproperty.

Page|85
TheCurrentValueforIRRCalculationssectionislocatedbelowthePropertyPurchase
Pricesection.IntheCurrentValuesection,entertheinformationbywhichtheinternal
rateofreturniscalculated.
FourmethodsareavailableintheCurrentValueforIRRCalculationssection,seethe
following:
Field Description
InflatePurchasePriceat Selectthisoptiontodeterminethecurrentvalueofthis
propertybyinflatingtheinitialpurchasepriceselectthis
option.
Entertheinflationrateinthefield.
Leavethefieldblanktousethegeneralinflationrate.
CurrentAmount Selectthisoptiontodirectlyenterthecurrentvalueofthis
property.Enterthecurrentvalueoftheinitialequityasofthe
reportingstartdate.Inflationwillnotbeappliedtothis
amount.
CumulativeCosts Tospecifycertaintypesofcapitalitemstobeaccumulatedas
thecurrentvalue,selectthisoption,andthenchoosetheIRR
buttontoselectthetypesofcapitaltobeused.Thesetypesof
capitalincludedevelopmentcosts,capitalcosts,tenant
improvements,leasingcommissionsanddebtinterest.
DirectCapitalizationValue Selectthisoptiontousethecalculateddirectcapitalizedvalue
astheinitialequityintheIRR.

Themodifiedinternalrateofreturn(MIRR)isanalternativemethodofcalculationthat
insomecircumstancesmayprovideamoreaccuratereflectionthantheinternalrateof
return.Toenterthemodifiedinternalrateofreturn,usetheMIRRbuttononthe
PropertyPurchasePriceandCurrentValuewindow.Thecalculationofthisraterequires
theentryofareinvestmentrateandasaferate.Thisratewillbereportedbeneaththe
internalrateofreturn,forunleveragedandleveragedcashflows.

HowTo
EnteraPropertyPurchasePrice&CurrentValue:
1. FromtheYieldmenu,selectPropertyPurchase.
2. ThePropertyPurchasePrice&CurrentValuewindowwillappear.
3. ClicktheInitialAmountfield,andenter$500,000,000.
Page|86
3. ClickOKtosavethePropertyPurchasePriceinformation.

Property Resale

Description:
Tocalculatetheresalevalueofapropertyattheendofthereportingperiod,aresale
calculationmustbesetup.WithinthePropertyResalewindow,severalcalculation
methodsareavailable:
Field Description
NoResaleCalculation Selectthisoptioniftheresaleamountshouldnotbe
calculated.
DirectlyInputFinalYear
ResaleAmount
Thismethodallowsaspecificresalevaluetobeenteredinthe
DirectResaleAmountfield.Enterthetotalcurrencyamount
forwhichthispropertywillbesoldattheendoftheanalysis.
Theamountenteredisnotsubjecttoinflation.Theresale
valuewillbereportedonlyinthefinalyearoftheanalysis.
Internalrateofreturnwillnotbecalculatedforotheryears.
AppreciateInitialPurchase
Price
Thismethodincreasestheinitialpurchasepricebyagrowth
rateeveryyearoftheanalysis.Theinitialpurchaseprice,
growthrate,andtheyearofresaledeterminethevalueofthe
property.Partialyearswillinflatebythefullgrowthrate.
CapitalizeNetOperating
Income
Thismethoddeterminestheresalevaluebydividingthenet
operatingincomebythespecifiedcapitalizationrate.
CapitalizationCashFlow
afterTenantImprovements
andLeasingCommissions
Thismethoddeterminestheresalevaluebydividingthecash
flowbeforedebtbythespecifiedcapitalizationrate.Thecash
flowbeforedebtisthenetoperatingincomelesstenant
improvements,leasingcommissions,capitalexpenditures,and
developmentcosts.
Page|87
CapitalizationCFAdjusted
forAverageTenant
ImprovementsandLeasing
Commissions
Thismethoddeterminestheresalevaluebydividingthenet
operatingincome,lessaveragetotalleasingcostsand
developmentcosts,bythecapitalizationrate.
CapitalizeNetOperating
IncomeUsingRateAdjusted
forAge
Thisoptionrequiresanentrydescribingtheconditionofthe
building.Withthisentry,ARGUSValuationDCFwillmodify
thecapitalizationratetoreflecttheconditionofthebuilding
uponresale.
GrossedUptoStabilized
MarketVacancy
Thisoption,whichgrossesupexpenses,issimilartothe
CapitalizationNetOperatingIncomeusingRateAdjustedfor
Ageoption.Enterthestabilizedmarketvacancyrateand
capitalizationratefortheresalecalculation.
CapitalizationMethod Thisoptionperformsthepropertyvaluationusingthemarket
rentcapitalizationmethod.
ClickAdjustandspecifyoneofthefollowing:
Grossmethod:marketrentincludesadditional
revenues.
Netmethod:marketrentdoesnotincludeadditional
revenues.
TheAdjustmenttoValuefieldisusedtoenterthefirst
adjustmentintheAdjustmentsandAllowancessectiononthe
Resalereport.
TheSellingCosts(aspercentofprice)isusedtoenterthe
sellingcostsasapercentageoftheresaleprice.
TermandReversion ThisoptionperformspropertyvaluationsusingTermand
Reversionresultsforeveryyearoftheanalysis.Theseresults
areusedasthebasisforpropertyresalevalue.

Page|88
OncetheResaleCalculationMethodisselected,informationforthecalculationwill
needtobeentered.
Field Description
CapitalizationRate Entertheterminalcapitalizationrate.
TheCapitalizationRatefieldisrequiredforthefollowing
methods:
CapitalizeNetOperatingIncome
CapitalizationCashFlowAfterTenantImprovements
andLeasingCommissions
CapitalizationCFAdjustedforAverageTenant
ImprovementsandLeasingCommissions
GrosseduptoStabilizedMarketVacancy
Byaddingacapitalizationrate,thelineitemofincomewillbe
capitalized.Thiswilldeterminetheresaleamount.
ResaleAdjustmentasa
PercentofPrice
Resaleadjustmentsaredeductedfromthegrossproceeds
fromsale.Resaleadjustmentsmayincludeclosingcosts,
brokerfeesandotherfeesassociatedwiththesaleofa
property.EnterafixedrateorclickDetailtoenterlineitems
fortheadjustment.
ApplyRatetofollowingyear
income
Thischeckboxdeterminestheyearofincomefromwhich
resaleiscalculated.Whenchecked,theincomeoftheyear
followingtheresaleyearwillbecapitalized.Theentryis
checkedbydefault.
CalculateResaleforAllYears Whenselected,ARGUSValuationDCFprojectstheresalevalue
ofthepropertyforeachyearintheanalysis.Theinternalrate
ofreturnwillalsobeshownforeachyearoftheanalysis,
basedontherespectiveresalevalue.
Matrix ClickMatrixtoenteraresalecapitalizationratematrixrange.
Enteralowrate,ahighrateandtheincrementatwhichto
calculatethecapitalizationrates.Bysettingupthiswindow,a
reportwilldisplaystheresalevalueandpresentvalueforall
capitalizationratesinthematrix.
TheMatrixoptionisavailablewiththefollowingResale
Calculationmethods:
DirectlyInputFinalYearResale
AppreciationPurchasePrice
CapitalizeCashFlowafterTenantImprovements&
LeasingCommissions
CapitalizeCashFlowforavg.TenantImprovements&
LeasingCommissions
CapitalizeNetOperatingusingRateadjustedforage
GrosseduptoStabilizedMarketVacancy
CapitalizationMethod

Page|89
Practice:
1. FromtheYieldmenu,selectPropertyResale.
2. ThePropertyResalewindowwillappear.
Field Entry
OptionforResale
Calculation
CapitalizationRate 6.25%
ResaleAdjustmentasa
PercentofPrice
1.5%
ApplyRatetofollowingyear
income
Checked
CalculateResaleforAllYears Checked
4. ClickOK.

ChapterSummary:
ThePropertyPurchasePriceandthePropertyResalewindowsproducesignificant
reportsfortheproperty.Withinthesewindows,enterapurchaseprice,resale
calculationmethod,andcapitalizationrate.Thecalculationresultsprovideinternal
ratesofreturnandresalevalues.
Page|90
Chapter 9
Direct Capitalization and Present Value

Objectives
Present Value Discounting and the Direct Capitalization assist ARGUS Valuation-
DCF in calculating a present value. This section will cover the following:
DirectCapitalization
PresentValueDiscounting

Direct Capitalization

Description:
DirectCapitalizationdeterminesthevalueofapropertybydirectlycapitalizingthefirst
yearofthereportingperiod.
TheDirectCapitalizationwindowincludesthefollowingfields:
Field Description
CapitalizationPeriod Selecttheperiodtobecapitalized.Thefollowingoptionsare
available:
YearOne:Capitalizethefirstyearofthereporting
period.Theresultsofthiscapitalizationwilldiffer
fromtheFirst12Monthsoptiononlyiftheproperty
hasstubtiming.
YearStartingMonth:Capitalize12monthsofthe
reportingperiodstartingataspecifiedmonth.Enter
themonthnumberoftheanalysisinwhich
capitalizationshouldbegin.
First12Months:Selectthisoptiontocapitalizethe
first12monthsofthereportingperiod.
CashFlowtoCapitalize Selectthecashflowitemthatshouldbecapitalized.The
followingoptionsareavailable:
NoCapitalizationCalculation
NetOperatingIncome
NetOperatingIncomelessCapitalCosts(subtracts
theleasingandcapitalcostsfromthenetoperating
income)
NetOperatingIncomeatStabilizedMarketVacancy
(appliesastabilizedmarketvacancyforthe
calculation)
Page|91
StabilizedMarketVacancy Enterthevacancyrateforthecalculation.Thisfieldisonly
availablewhentheNetOperatingIncomeatStabilizedMarket
Vacancymethodisselected.
CapitalizationRate Enterthecapitalizationrateforthecalculation.
CommissionasaPercentof
Value
Enterthepercentagetouseforthecommissioncalculation.
Theentrymaybeasimplepercentage,orclickDetailtoenter
multiplepercentages.

Practice:
1. FromtheYieldmenu,selectDirectCapitalization.
2. Enteringthefollowinginformation:
Field Entry
CapitalizationPeriod YearOne
CashFlowtoCapitalize NetOperatingIncome
CapitalizationRate 6%
CommissionasaPercentof
Value
0%
3. ClickOK.

Page|92
Present Value Discounting

Description:
Ifaparticularinternalrateofreturn(IRR)isdesired,enterthistargetrateasthe
discountrateinthePresentValueDiscountingwindow.
Withthiscalculation,allyearsofthecashflowsarediscountedbytheenteredrate.
Theseresultsareaddedtogethertofindtheabsolutepropertyvalueatthetimeof
purchase.ThePresentValuemaybeusedtodeterminethemaximumpurchasepricein
ordertoachievethedesiredIRR.
InthePresentValueDiscountingwindow,entertheprimarydiscountrate,rangeof
ratesanddiscountmethodforthecalculation.
Field Description
PrimaryDiscountRate EnterthetargetIRRfortheprojectresale.
DiscountRateRange Twofieldsareavailableinthissection:
NumberofRates:EnterthetotalnumberofIRRrates
tobecalculated.ThetargetIRRwillbeshownasthe
middlerate.
IncrementBetweenRates:Entertheincrementthat
determinesthedifferencebetweeneachdiscountrate
beingcalculated.
DiscountMethod Selecthowthecalculationswillbedone:
Annually(EndPointonCashFlowandResale):This
defaultmethoddiscountsallcashflowsfromendof
eachyeartothereportingstartdate.Theresale
proceedsarediscountedbacktothereportingstart
datefromtheendoftheholdingperiod.
Annually(MidPointonCashFlowandResale):This
methoddiscountsallcashflowsfromthemiddleof
eachyeartothereportingstartdate.Thecashflow
forYear1willbediscountedsixmonthsifthefirst
yearisafull12months.Theresaleproceedsare
discountedbacktothereportingstartdatefromthe
middleoftheresaleyear.
Annually(MidPointonCF/EndpointonResale):This
methodusesmidpointdiscountingforthecashflowas
describedabove.However,theresaleproceedsare
endoftheresaleyear.
Quarterly:Thismethoddiscountsallcashflowsfrom
theendofeachquartertothereportingstartdate.
Theresaleproceedsarediscountedbacktothe
reportingstartdatefromtheendoftheresale
quarter.
Page|93
Monthly:Thismethoddiscountsallcashflowsfrom
theendofeachmonthtothereportingstartdate.
Theresaleproceedsarediscountedbacktothe
reportingstartdatefromtheendoftheresalemonth.
MonthlyinAdvance(ResaleinArrears):Thismethod
discountscashflowsasiftheywerereceivedatthe
beginningofthemonth.Theresaleproceedsare
endoftheresalemonth.

Practice:
1. FromtheYieldmenu,selectPresentValueDiscounting.
Field Entry
PrimaryDiscountRate 10%
DiscountRateRange NumberofRates:5
IncrementBetweenRates:0.5
DiscountMethod Annually(EndpointonCashFlowandResale)
3. ClickOKtoclosewindow.

ChapterSummary:
ThissectioncoveredthePresentValueDiscountingandDirectCapitalizationportionsof
theYieldmenu.
Page|94
Chapter 10
Debt Financing and Partnerships

Objectives
ARGUSValuationDCFallowstheentryofdebtandequitysourcesforaproperty.This
chapterwilldiscussthevariousitemsaddressedintheDebtFinancingandPartnership
windows,including:
DisplayingDebt
DebtNameandCurrency
DebtNoteDates
DebtNoteTermLength
DebtAmounts
InterestRates
AdvancedDebtOptions
PartnerEquityContributions
CashFlowDistributions
ResaleDistributions

Displaying Debt

Description:
TheDebtFinancingwindowsdefinethedebtstructurefortheproperty.Thefollowing
fieldsareavailablewhencreatingabasicdebtnote:
Field Description
NoteName Enteranameforthedebtnote.
InputCurrency Selectthecurrencyinwhichthenoteisobtained.
StartDate Enterthedatewhenthenotewasassumed.
CheckboxforAmortizeStart ChecktheAmortizecheckboxtocalculateprincipal
paymentsforthedebtnote.UnchecktheAmortize
checkboxtocalculateaninterestonlydebtnote.
AmortizeStart Enteradatetostartthecalculationfortheprincipal
payments.Leavethisfieldblanktoassumethesamedate
intheStartDatefield.
Page|95
NoteLength(thisfieldisnot
labeled)
Choosethelengthofthedebtnote.Theoptionsforthis
fieldincludethefollowing:
TermLengthEnterthenumberofyearsforthe
debtnote.
MaturityDateEntertheenddateofthedebt
note.
PaymentEntertheamountofthenote
payment;thepaymentamountisappliedeach
month.
LoanConstantEnterthepercentageofthe
originalprincipalbalancetopaythelendereach
year.
PrincipalPaymentEntertheprincipalpayment
foreachperiodofthedebtnote.
NoteType(thisfieldisnot
labeled)
Choosethetypeofdebtnotetocalculate.Theoptionsfor
thisfieldincludethefollowing:
AmountEnterthemonetaryamountofthedebt
note.
CoverageRatioCalculatetheamountofthe
debtnotebasedontheavailablecashflow.
LoantoValueRatioCalculatetheamountofthe
debtnotebasedoncurrentvalueoftheproperty.
%ofPriceorPV(PresentValue)Calculatethe
amountofthedebtnotebasedonapercentageof
thecurrentvalueoftheproperty.
PriorBalloonThisdebtnotefundstheamount
ofanotherballooningdebtnote.
%ofLineCalculatetheprincipalbalanceofthe
debtnotebasedonanotherlineintheanalysis.
RateCharged Entertheinterestrateforthedebtnote.
EarlyFunding Onlyavailablewhenfundingpriorballoonnotes.
CalculatethisNote ChecktheCalculatecheckboxtocalculatethedebtnote
whenrunningreportsfortheanalysis.Uncheckthe
Calculatecheckboxtoignorethedebtnotewhenrunning
reportsfortheanalysis.

Page|96

HowTo
DisplaytheDebtFinancingCategorywindow:
1. FromtheYieldmenu,selectDebtFinancing.
2. TheDebtFinancingcategorywindowdisplays.

3. Proceedtothenexttopictoaddadebtnote.

Debt Name and Currency

Description:
Usespecificnamesforeachdebtnoteforeasydistinction.Specifythecurrencyin
whichthedebtfinancingisobtained.

Practice:
1. IntheDebtFinancingcategorywindow,clickNew.TheDebtFinancingwindow
displays.
Field Entry
NoteName PurchaseMortgage
InputCurrency Input
Page|97

Debt Note Dates

Description:
TheStartDatefielddetermineswhenfinancingisavailablefortheanalysis.The
AmortizeStartfielddetermineswhenprincipalpaymentsbegin.
HowTo
EntertheStartDateinformation:
1. IntheStartDatefield,enterthestartdateforfinancing.Leavethisfieldblankto
assumetheanalysisstartdateforthefinancingstartdate.
2. IntheAmortizeStartfield,enterthebeginningdateforprincipalpayments.
Leavethisfieldblanktoassumethesamedateasthenotestartdate.
3. Proceedtothenexttopictoaddmoreinformationforthedebtnote.

Page|98
Debt Note Term Length

Description:
ThelengthofthedebtnoteisdeterminedbytheselectionfromtheNoteLengthdrop
downfield.Thisfieldisnotlabeled.

Practice:
Field Entry
TermLength 20

Debt Amounts

Description:
ThedebtnotetypeisdeterminedbytheselectionfromtheNoteTypedropdownfield.
Thisfieldisnotlabeled.

Page|99
Practice:
Field Entry
%ofPriceorPV(selectfromthe
Amountdropdownmenu)
70

Interest Rates

Description:
ThedebtfinancinginterestrateisenteredintheRateChargedfield.Theentrymaybea
fixedrateoradetailedrate.DetailedratescanalsobelinkedtoGlobalInterestRate
categories(e.g.LIBOR).

Practice:
Toenterafixedinterestrate:
Field Entry
RateCharged 6%
Page|100


HowTo
Enterachanginginterestrate:
1. ClicktheRateChargeddropdownarrow,andthenclickDetail.TheDetailed
RateChargedwindowdisplays.
2. IntheDatefield,enterthedatewhentheinterestrateiscalculated.Thedate
maybeenteredasayear/monthdateoramonthnumberwithinthedebt
financingschedule.
3. IntheRatefield,entertheinterestrateamounttobecalculated.
4. Repeatsteps23toaccountfordifferentinterestratesbeingcharged.
5. ClickOKtosavethedetailedrates.

Advanced Debt Options

Description:
Additionaldatamaybeenteredforcalculatingthedebtnote,including:
Thenumberofpaymentsforthedebtnotethatarescheduledeveryyear.
Whentheinterestiscalculatedforthedebtnote.
Additionalpaymentsforthedebtnote.
Manualballoondateforthedebtnote.
Prepaymentpenaltiesifthenoteisrepaidpriortotheenterednotelength.
Pointsorfeestothedebtnote.

Page|101
HowTo
Enteradditionaldataforthedebtnote:
1. IntheDebtFinancingwindow,clickAdvanced.TheAdvancedDebtwindow
displays.
2. ClickOKorCanceltoexittheAdvancedDebtwindow.
3. ClickOKtosavetheDebtNote.TheDebtFinancingcategorywindowdisplays.
4. ClickClosetoreturntotheExecutiveDashboard.

Partner Equity Contributions

Description:
Partnersmayexistforaproject.Anycontributionsmadebypartnersmaybeaccounted
forinthePartnerEquityContributionwindow.Contributionsmayincludecash,non
cash(suchaslandcontribution)oracontributionforescrow.Whenpartnersareadded
inthecontributionwindow,distributionsfromthecashflowandsaleoftheproperty
maybeadded.

HowTo
AddPartnerEquityContributions:
1. FromtheYieldmenu,selectPartnerEquityContributions.ThePartnerEquity
Contributionswindowdisplays.
2. ClickInsertforeachpartnertoadd.
3. Entertheappropriateinformation.Thisprocessissimilartotherevenuesand
expensesprocess.
4. ClicktheTypedropdownarrowandclicktheappropriatecontributiontype.
5. ClickClosetosavethepartners.
Page|102
Cash Flow Distributions

Description:
TheCashFlowDistributionwindowdetermineshowcashisdistributedtopartnersasa
propertygeneratesenoughcashflowforsuchadistribution.Thesedistributionsmay
onlybesetuponcethepartnershipshavebeencreated.

HowTo
EnterCashFlowDistributions:
1. FromtheYieldmenu,selectCashFlowDistributions.TheCashFlow
Distributionswindowdisplays.
2. ClickInsertforeachlevelofdistribution.
3. Specifythetermsforthedistribution.
4. ClickClosetosavethedistributionsfromthecashflow.

Resale Distributions

Description:
TheResaleDistributionwindowdetermineshowcashisdistributedtopartnersupon
thesaleofthepropertyattheendoftheanalysis.Thesedistributionsmayonlybeset
uponcethepartnershipshavebeencreated.

HowTo
EnterResaleDistributions:
1. FromtheYieldmenu,selectResaleDistributions.TheResaleDistributions
windowdisplays.
2. ClickInsertforeachlevelofdistribution.
3. Specifythetermsforthedistribution.
4. ClickClosetosavethedistributionsfromthesaleoftheproject.

ChapterSummary:
ARGUSValuationDCFallowstheentryofdebtandequitysourcesforaproperty.This
chapterdiscussedthevariousitemsaddressedintheDebtFinancingandPartnership
windows,includingdisplayingthedebtwindows,nameandcurrencyfordebtnotes,
interestratesfordebtnotes,advanceddebtoptions,partnerequitycontributions,and
cashflowandresaledistributionsforPartners.
Page|103
Chapter 11
Depreciation and Taxes

Objectives
TheDepreciationandTaxeswindowcontrolsthedepreciationofvariousitemsand
determinethetaxrateforaproperty.Thischapterwillcoverhowtoinputdescriptive
informationregardingtheinputofsimpleordetaileddepreciationmethodsandthe
depreciationmethodsavailable.Inaddition,thiswillcoverhowtoinputtaxratesfor
OrdinaryIncome,DepreciationRecapture,andCapitalGains.
DepreciationandTaxes

Depreciation and Taxes

Description:
TheDepreciationandTaxeswindowcontrolsdepreciationofvariousitemsand
determinethetaxrateforaproperty.ThedepreciationandtaxdataaffectsARGUS
ValuationDCFreports,includingtheDepreciationScheduleandIncomeStatement.
OptionsintheDepreciationandTaxeswindowareasfollows:
Field Description
Name TheNamecolumnliststheitemsthatcanbedepreciated.The
followingitemsmaybedepreciated:
Property:Depreciatethepurchasepriceoverthelife
oftheanalysisfromthePropertyPurchasePrice
window.Ifapurchasepriceisnotentered,ARGUS
ValuationDCFusesthemostconservativepresent
valueamountforthiscalculation.
CapitalExpenditures:Depreciatethelineitemsinthe
CapitalExpenditurespropertylevelwindow.
LandCosts,HardCosts,SoftCosts:Depreciatethe
developmentcostsfortheproject.Thesecostsare
primarilyforconstructionofanewpropertyorthe
expansionofanexistingproperty.
*Note:Landpurchasesaregenerallynot
depreciated.TheLandCostlineitemismainlyfor
depreciatingsiteimprovements.
DebtInterest:Thislineamortizestheinterestonany
debtsavailable.
LeasingCommissions,TenantImprovements:These
linesusetheleasingcostsfromtheRentRoll,Space
AbsorptionorMarketLeasingAssumptionwindows.
Theleasingcostsareaddedtogetherandthetotal
amountisdepreciated.
Page|104
Simple/Detail TheselectionintheSimple/Detailcolumndeterminesthe
itemsthatwillbeusedforthedepreciation.
ClickDetailtoselectdifferentdepreciationtreatments
foreachcomponentofadetailedpurchaseprice.
ClickDetailtoenterdepreciationandtaxesforitems
withmultiplelinesofentry.
*Note:DetailscannotbeenteredforLeasingCommissions
andTenantImprovements.
Method Thisfieldcontainsalistofavailabledepreciationmethods.
Thefollowingoptionsareavailable:
None:Depreciationisnotappliedtotheitem.
Expense:Theoptiondoesnotdepreciatetheamount,
butshowstheflowintheIncomeStatement
generatedfromtheDepreciationandTaxesreport
window.
StraightLine:Thisoptiondividesthecostofatangible
assetbytheassetsusefullife.
Amortization:Thisoptiondividesthecostofanon
tangibleassetbytheassetsusefullife.Nontangible
assetsincludecapitalinvestmentssuchasarchitects
fees.
DoubleDeclining:Thisoptiondoublestheresultsof
theStraightLinemethod.
Capitalize:ARGUSValuationDCFaddstheamountof
thelineitemtothePropertylineitemanddepreciates
itatthatrate.Ifdetaileddepreciationisenteredfor
thePropertylineitem,thecapitalizeditemusesthe
firstdepreciationmethodfoundforthePurchasePrice
lineitems.
ClickDetailtoenteradetaileddepreciationschedule.
UsefulLife Enterthenumberofyearstodepreciatetheasset.This
numberwillvarywithdifferenttypesofpropertiesor
expenses.
AmountBasis Selectoneofthefollowingoptionsonwhichtobasethe
depreciationandtaxcalculation:
UseInput:UsetheentryintheNamefieldasthebasis
forthedepreciationcalculation.
Simple:Enterasimplecurrencyamountasthebasis
fordepreciation.
Detail:Thisselectiondisplaysawindowwherea
monthbymonthbasisforthedepreciationmaybe
entered.
OrdinaryIncomeTaxRate Entertheordinaryincometaxratetogeneratetheincome
aftertaxesanddepreciation.
CapitalGainsTaxRate Enterthecapitalgainstaxratefortheanalysistodetermine
thecapitalgainstaxestobepaiduponresale.
DepreciationRecaptureTax
Rate
Enterthedepreciationrecapturetaxratefortheanalysisto
calculatecapitalgainsrecapturescenarios.

Page|105

HowTo
EnterDepreciationandTaxinformation:
1. FromtheYieldmenu,selectDepreciationandTaxes.
2. EnterthedesiredDepreciationandTaxesinformation.
3. ClickOKtosavetheinformation.Resultsfromthiswindowmaybeviewedin
theDepreciation&Taxesreport.

ChapterSummary:
TheDepreciationandTaxeswindowdesignatesselectsitemstobedepreciated.Thetax
rateforthepropertyisalsodeterminedinthiswindow.
Page|106
Chapter 12
Reports

Objectives
ThischapterwilldescribethevariousreportsandreportingtoolsavailableinARGUS
ValuationDCF,including:
PropertyLevelReports
DepreciationandTaxesReports
PartnerDistributionReports
TrackingReports
PresentationRentRollReport
IndividualTenantReports
MarketLeasingReports
SupportingSchedulesReports
StackingPlan
ReportingTools
ReportWriter
*AllreportsareavailablefromtheReportsmenu.

Property Level Reports

Description:
ThePropertyLevelReportsshowsvariousreportsbasedontheentereddata.The
reportsareonlyavailablewheninformationhasbeenentered.ThePropertyLevel
Reportsincludethefollowing:
Report Description
ScheduleofCashFlowfrom
Operations
Thisreportdisplaystheoperationsforthedurationofthe
analysisbeginningwiththeReportingStartDate.
Individuallineitemsforrevenuesandexpensesare
groupedtogetherbycategory.
ScheduleofExpense
ReimbursementRevenue
Thisreportcalculatesallfiscalyearreimbursableoperating
expenses.Thenumbersarereportedbyexpenses,by
reimbursementsfromthetenants,andbythepercentage
ofoperatingexpensesbeingcollected.
IndividualLoan&DebtService
Summary
Thisreportcontainsallofthedebtnoteinformationand
variousratios.Separatereportswillbecalculatedforeach
debtnote.
Sources&UsesofCapitalCash
Returns
Thisreportdescribestheinflowandoutflowoffundsto
theproperty.
Page|107
ProspectiveResale&IRR
Summary
Whenaresalemethodisentered,thisreportshowsthe
resultsoftheresalecalculation.TheInternalRateof
ReturnSummaryresultswilldisplayonlywhenproperty
purchaseinformationisentered.
DirectCapitalizationValue
Summary
Thisreportcalculatesthevalueofapropertybydirectly
capitalizingaspecifiedyearfortheproperty.
ProspectivePresentValue
Summary
Thisreportcalculatesthecurrentvalueofapropertywhen
targetingaspecificInternalRateofReturn(IRR)toachieve
atresale.
PropertySummaryReport Blocksofpropertydataisreported,basedonthedata
entryincluding:
TimingandInflation
PropertySizeandOccupancy
GeneralVacancy
CreditandCollectionLoss
DebtFinancing
PropertyPurchaseandResale
PresentValueDiscounting

HowTo
AccessthePropertyLevelReportswindow:
1. FromtheReportsmenu,selectPropertyLevel.ThePropertyLevelReports
windowdisplays.
2. Selecttheappropriatereportcheckboxes.
3. ClickView.TheViewReportswindowdisplays.
Page|108
ScheduleofProspectiveCashFlowReport
Page|109
ProspectivePresentValueSummary
4. Eachselectedreportdisplaysinthewindow.Clickthereporttabsacrossthe
bottomofthescreentoviewthedifferentreports.
5. ClickClose.

Page|110
Depreciation and Taxes Reports

Description:
Thesereportsprovidespecificinformationondepreciationandtaxes.Tworeportsare
availableinthiswindow:
Report Description
IncomeStatement ThisreportissimilartotheCashFlowreport.However,
thisreportincludesdepreciatedamountsforseveralitems
insteadofthetotalexpenseoftheitem.Thisreportalso
showstaxableincomeandincomeaftertaxes.
DepreciationSchedule ThisreportliststhelineitemsfromtheDepreciationand
Taxeswindow.

HowTo
AccesstheDepreciation&TaxesReportswindow:
1. FromtheReportsmenu,selectDepreciation&Taxes.TheDepreciation&Taxes
windowdisplays.
4. Eachselectedreportdisplaysinthewindow.Clickthereporttabstoviewthe
differentreports.
5. ClickClosewhendonewiththereports.

Partner Distribution Reports

Description:
ThePartnerDistributionreportsprovidespecificinformationforindividualpartnersfor
theproject.ThreereportsareavailableinPartnerDistribution:
Report Description
CashFlow&Summary Thisreportdisplaysseveralitemsthatarerelatedto
trackingthecashflowcontributionsanddisbursements
frompartners.
PartnerReturns Thisreportshowsthecashthatwasreturnedtopartners
andthetimeatwhichitwasreturned.
PresentValue ThisreportissimilartothePresentValuereport.This
reportrelatesthefollowingitemstopartnercashflowand
distribution:
AnnualCashFlow
PresentValueofCashFlow@PercentageRate
TotalCashFlow
TotalPropertyPresentValue
PerMeasurement
Page|111
HowTo
AccessthePartnerDistributionsReportswindow:
1. FromtheReportsmenu,selectPartnerDistributions.ThePartnerReports
windowdisplays.
2. Selecttheappropriatepartners.
3. Selecttheappropriatereport.
5. Eachselectedpartnerreportdisplaysinthewindow.Clickthereporttabsto
viewthedifferentreports.
6. ClickClosewhendonewiththereport.

Tracking Reports

Description:
TheTrackingreportsshowinformationtoassistwithauditing.Severalreportsare
available,including:
Report Description
EscrowTracking Thisreportshowsthemonthlyorannualtotalsfor
previousbalance,contributions,distributions,interestand
escrowbalance.
LossTracking ThisreportshowsthebreakdownofwhenGeneral
VacancyorCollectionLossiscalculated.
IRRTracking Thisreporttracksthecomponentsusedtocalculate
leveragedandunleveragedInternalRateofReturn.
DevelopmentCost Thisreporttracksdevelopmentcostsincurredduringa
specifiedtimeaswellascumulativetotalsofthecosts.
ParkingTracking Thisreportshowstheparkingrevenueforindividual
tenantsandtenantgroups.
SecurityDepositTracking Thisreportshowstheinvestmentrevenueearnedfrom
securitydeposits.
ExpenseGroupTracking Thisreportisabreakdownoftheexpensesincludedinan
expensegroup.Itshowsthetotalsforeachexpenseinthe
groupandacumulativetotalforthegroup.
Reimbursement Thisreportisabreakdownofhowtheproratasharesof
reimbursableexpensesarecalculatedforthetenant.It
alsoshowsthecalculatedreimbursementsforthetenant.

HowTo
AccesstheTrackingReportswindow:
1. FromtheReportsmenu,selectTracking.Asubmenudisplays.
2. Selecttheappropriatereportfromthesubmenu.
3. Selecttheappropriatereportoptions.
Page|112
Presentation Rent Roll Report

Description:
ThePresentationRentRollreportsummarizesassumptionsforallleasesasenteredon
theRentRollandSpaceAbsorptionwindows.Thisreportissuitablefordirectinclusion
inpropertypackages,appraisalreportsorpropertyplans.

HowTo
AccesstheRentRollReportswindow:
1. FromtheReportsmenu,selectRentRolls.Asubmenudisplays.
2. ClickPresentationRentRoll.ThePresentationRentRollwindowdisplays.
3. Selecttheappropriatereportoptions.

Individual Tenant Reports

Description:
TheIndividualTenantreportsprovidespecificinformationfortenants,tenantgroupsor
leasestatusfortheproject.Thesereportsincludethefollowing:

Report Description
CashFlow&Summary Thisreportdisplaystheoperationsforthedurationofthe
analysisbeginningwiththeReportingStartDate.
ReimbursementDetail Thisreportliststheamountsthatthetenantis
reimbursingforallreimbursableoperatingexpenses.
ReimbursementDetailby
Expense
Thisreportshowshowanindividualreimbursementitem
isbeingreimbursedbythetenants.
ReimbursementTracking Thisreportisabreakdownofhowtheproratasharesof
reimbursableexpensesarecalculatedforthetenant.It
alsoshowsthecalculatedreimbursementsforthetenant.
LeaseValueSummary Thisreportdiscountsthecashflowforatenantand
subtractstheleasingcoststoarriveatacontributionafter
leasingcosts.Thetenantsexpenseswillthenbe
subtractedtoarriveatanetcontributionafterexpenses.
TenantRoster TheTenantRostershowsdatafortenantswithaspecified
leasestatus.

Page|113
HowTo
AccesstheIndividualTenantReportswindow:
1. FromtheReportsmenu,selectIndividualTenant.TheIndividualTenantReports
windowdisplays.
2. IntheReportssection,clickthedesiredreport.
3. IntheTenantsection,clicktheappropriatetenants.
5. Eachselectedtenantreportdisplaysinthewindow.Clickthereporttabstoview
thedifferentreports.

Market Leasing Reports

Description:
TheMarketLeasingreportscalculatethemarketratesovertheanalysisperiodfora
selectedmarketleasingassumption.Thesummaryreportcomparesallmarketleasing
assumptionsforaspecifiedyearintheanalysis.

HowTo
AccesstheMarketLeasingAssumptionsReportswindow:
1. FromtheReportsmenu,selectMarketLeasing.TheReportMarketLeasing
Assumptionswindowdisplays.
2. Selecttheappropriatemarketleasingassumptions.
Page|114
4. Eachselectedmarketleasingassumptionsdisplaysinthewindow.Clickthe
reporttabstoviewthedifferentreports.
ReportasummaryfortheMarketLeasingAssumptions:
1. FromtheReportsmenu,selectMarketLeasing.TheReportMarketLeasing
Assumptionswindowdisplays.
2. ClickSummaryReport.

Page|115
Supporting Schedules Reports

Description:
TheSupportingSchedulesreportsprovidespecificinformationforitemsintheproperty.
SupportingSchedulesreportsassistinauditingtheproperty.
SupportingSchedulesmaybeviewedthreeways:
Report Description
Standard Thisreportwillgenerateresultsinwholemonetary
amounts.
PerTenantArea Thisreportwillgenerateresultsincurrencyper
measurementamounts.
UserDefined Thisreportresultsaredependentuponthecriteria
enteredbytheuser.

HowTo
AccesstheSupportingSchedulesReportswindow:
1. FromtheReportsmenu,selectSupportingSchedules.Asubmenudisplays.
2. Clicktheappropriateoption.
3. Selecttheappropriatereports.
5. Eachselectedreportdisplaysinthewindow.Clickthereporttabstoviewthe
differentreports.
Stacking Plan

Description:
TheStackingPlanreportallowsthecreationofavisualsnapshotofthetenantactivity
fromwithintheARGUSValuationDCFinterface.Multiplestackingplanreportsmaybe
createdandsavedforfutureuseintheproject.
Inorderforthisreporttogeneratetheproperresults,afloornumbermustbeentered
foreachtenantintheRentRollwindow.

Page|116
HowTo
CreateaStackingPlanreport:
1. FromtheReportsmenu,selectStackingPlan.TheStackingPlancategory
windowdisplays.
2. ClickNew.TheStackingPlanOptionswindowdisplays.
3. IntheStackingPlanfield,enteranameforthereport.
4. ClickthePlanDatedropdownarrow,andthenclicktheappropriatedate.
5. Ineachtab,enterthedesiredinformation.
RunaStackingPlanreport:
1. FromtheReportsmenu,selectStackingPlan.TheStackingPlancategory
windowdisplays.
2. Clickthedesiredreport.
3. ClickView.TheStackingPlanreportwindowdisplays.

Reporting Tools

Description:
Thereportsmayincludeseveraltoolstohelpviewthereportedinformation.These
choicesinclude:
Report Description
Graph Selectthenumberstoincludeinagraph,andthenclick
Graph.
Excel ClickExcelorExporttocopyallreportsinthewindowto
MicrosoftExcel
ClipBrd SelectthedesiredinformationandthenclickClipBrd.The
selectedinformationmaybepastedintoothercomputer
programs.
Preview ClickPreviewtoviewhowthereportswillprint.
Print ClickPrinttoprintthereports.

HowTo
ExporttheExecutiveDashboardtoExcel:
1. FromtheExecutiveDashboard,clicktheExportbuttonatthebottomofthe
window.
2. TheExecutiveDashboardwillbeexportedtoExcelautomatically.

Page|117

3. ReturntoARGUSValuationDCF,andselectPropertyLevelReportsfromthe
Reportsmenu.
6. ClicktheExcelbuttonatthebottomofthewindow.
7. TheselectedreportswillbeautomaticallyexportedtoExcel.Eachreportwillbe
includedonaseparateworksheetintheworkbook.
Page|118

Report Writer

Description:
TheReportWriterallowsthecreationofcustomreports.Thesecustomreportsare
createdthroughMicrosoftExcelusinganARGUSaddin.
ProjectinformationmaybeaddedtothecustomreportfromanyreportinARGUS
ValuationDCF.Additionalinformation,suchasformulas,mayalsobeaddedtothe
customreport.

HowTo
Runacustomreport:
1. FromtheReportsmenu,selectReportWriter.TheARGUSReportWriter
windowdisplays.
2. SelectasavedreportandthenclickReport.ThereportopensinMicrosoftExcel.
3. ToreturntotheARGUSValuationDCFfile,closethecustomreport.

Page|119
Createacustomreport:
1. FromtheReportsmenu,selectReportWriter.TheARGUSReportWriter
windowdisplays.
2. ClickNew.MicrosoftExcelopenswiththeARGUSReportWriteraddin.
3. FromtheARGUSReportWritermenu,selectARGUSData.TheARGUSData
windowdisplays.
4. IntheTypefield,selecthowthissetofdataisreported.
5. IntheReportfield,selectthereportfromwhichthissetofdataispulled.
6. IntheSectionfield,selectthepartofthereportfromwhichthissetofdatais
pulled.Toreportallinformationfromthereport,selectEntireReport.
7. IntheItemfield,selectthelineitemwithinthesectionfromwhichthissetof
dataispulled.Thisfieldisavailablewhenasectionfromthereportisselected.
8. ClickInsert.ThedataisreportedfromtheARGUSValuationDCFfile.
9. Repeatsteps48toreportadditionalinformationforthecustomreport.
10. FromtheFilemenu,selectSave.NoticethefilelocationdefaultstotheARGUS
filelocation.EnteranameforthecustomreportandclickSave.
11. CloseMicrosoftExceltoreturntotheARGUSValuationDCFfile.

ChapterSummary:
Reportsarehelpfultoolswhenreviewingprojectinformation,auditinginformation,and
preparinginformationforpresentations.Customreportsmayalsobecreatedwiththe
ReportWriter.

Step by Step Guide: Release Version 14.0 - August 21, 2008

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StepByStepGuide

Release Version 14.0 | August 21

Creating a New File

The ARGUS Wizard

Input and Output Preferences

Budgeting Account Codes

Present Value Discounting

Debt Note Term Length

Cash Flow Distributions

Depreciation and Taxes Reports

Presentation Rent Roll Report

Supporting Schedules Reports

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