Argus Question - General Vacancy/Static Vacancy
Can anyone answer this?
If you’re underwriting a building and holding 7% of the space static throughout the hold period, but then applying a 10% general vacancy factor in Argus. How is the general vacancy calculated for each year? Right now it’s showing an average annual general vacancy of about 2.3% of PGR. I’m trying to back into this; does anyone know the actual formula/methodology Argus uses? Assuming it depends on rollover and downtime.
I understand the flip side. If I had 7% GVAC but 10% static throughout my hold period, there would never be a GVAC applied since it’s less then the static space.
Based on the most helpful WSO content, here's how general vacancy (GV) is typically calculated in Argus and how it interacts with static vacancy:
General Vacancy Factor in Argus:
How Argus Adjusts General Vacancy:
Why You See 2.3% of PGR:
Key Considerations:
To back into the calculation, you would need to: - Identify the potential gross revenue (PGR) for each year. - Subtract the static vacancy (7% of space) from the PGR. - Apply the general vacancy factor (10%) to the remaining revenue after accounting for static vacancy and any absorption/turnover vacancy.
If you're still unclear, reviewing the Argus manual or consulting with someone experienced in Argus modeling might help clarify the specific methodology used in your scenario.
Sources: General Vacancy Deductions
Believe you should be able to independently select the tenants you want to apply the GVAC and Credit Loss so you don't overestimate vacancy (excluding stat vac). Selecting this option should also account for spec leasing assuming you're turning tenants over during the hold.
If you have 10% gv and 6% static, it’s really 6% static and ~4% gv. The reason I use “~” is because static vacancy is being calculated based on physical occupancy/vacancy but gv is calculated based on economic occupancy/vacancy so the numbers won’t tie our exactly.
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Never even thought of this. Good looks.
If you go online to their website- they have a support section with articles and a chatbox with actual humans to answer questions
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