Calculating Expense Gross-Ups
Someone gave me a case study that provided me with an investment scenario includes a ton of follow up questions that could be asked in an interview. I'm having trouble with a gross-up question, and unfortunately, I don't have an answer key.
I attached a spreadsheet with the prompt as well as my attempt at answering it but I think my answer is incorrect because Argus returns a different answer. Can someone take a look and see where my math is wrong? The blue-outlined box shows my attempt and a screenshot of the Argus CFs is below.
Thanks for any help!
| Attachment | Size |
|---|---|
| Excel - Gross-Up Calculation 62.2 KB | 62.2 KB |
There could be a number of reasons why: check your Modeling Policies to see how expenses/recoveries are being calculated, make sure your expenses in Argus have the correct fixed/variable percentage and the correct expense amounts entered post fixed/variable allocation.
Don't know the exact answer cuz I don't have access to the Argus file, but I'll give you a bit that helped me better understand the way does Argus gross ups.
I was familiar with gross ups we'd do at the end of the year during cam recs (we knew what our actual expenses were for the year at X% occupancy. Divide the actual expense incurred by the actual occupancy rate for the prior year. That gives you the expense grossed up 100%).
Argus is a little different because you're grossing up the projected expenses, rather than the actuals.
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