For office properties, do you typically assume landlord costs to whitebox space in between tenants (separate from TI)?
Most Argus models I've seen only process TI allowances for new leases, but don't consider that there will be landlord costs to bring space to a whitebox condition in between leases. For example, an office unit might have an old buildout and would require some interior demolition and other work before it would even be market-ready if the existing tenant vacates. Is there a way of handling this in Argus, other than simply increasing TI costs?
You would either model it as increased TI or as a separate CapEx project under Expenses.
What I will tell you is that it isn't as often as you think that LLs will bring spaces back to shell. I've only really done it for full floors that really don't show well.
Hope this helps.
Depends on what the condition of the space will be and market. In certain markets, it is tenant responsibility to put it back as a shell. Usually, you just try to reuse it as second gen space unless you can’t.
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