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Hey ThatHokie, I think you deserve a response...heck, everyone does. We're listening, sorry about the delay ...my best guess at places on WSO that could help:
No promises, but maybe one of our professional members will share their wisdom: PHLrealestate Kyle-Hayes JCboy
Fingers crossed that one of those helps you.
Hey man, any luck on this yet...?
Commenting because I know how to do this but I don't have access to the program at the moment to give specific details, I will get back to this hopefully by tonight.
Alright, so to build an annual cap isn't as straightforward as it would seem. In order to do so you need to create an expense group (Expense Groups Sub-tab) under the Expenses tab. You can add whatever expenses you would like here but the available options are only available from the other places where you've entered expenses.
Once you have created the expense group, you need to go to the Recoveries sub-tab under Tenants and create a new recovery structure (e.g. Net w/ 5% Cap). When you create a new record, there will be a window in the bottom third where you can add expenses. In Expense or Group you want to use the drop down to select your recently created Expense Group. Once you do so, slide over until you see Max. Increase (Cap) Units (NOT THE MAX. CEILING AMOUNT!), drop down to % and then type in 4% in the next "cell".
Let me know if you have any questions.
That seems to make sense for net recoveries but I don’t think Argus calculates the YoY caps correctly with base year stops. For example, the case study I’m working on a tenant is 3.98% of the rentable area with a base stop of $76,309 / month. 2018 operating expenses are $82,263 / month resulting in a net recoverable amount of $5,954 / month. 2019 operating expenses are $85,168 / month resulting in a net recoverable amount of $8,859 / month. Based on the pro rata share the tenant pays $237 / month in recoveries in 2018. Argus then applies the max increase (CAP) to the $237 resulting in a max recoverable amount in 2019 of $249 / month. In actuality the total expense pool only increased 3.5% but the problem is that Argus is applying the cap to just the prior recovered amount instead of the total expense pool… Is there a different way to model a YoY expense cap with base year tenants…?
Tangentially, if you're modeling in a hard cap (not % increase cap) remember that it must be the actual tenant pro-rata cap, not the sum of the expense pool. ARGUS only does so much work for you I guess.
This is what I figured too. Very counter-intuitive and ANNOYING since who would put TT's pro-rata cap in a lease?
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