Gross-Up vs Lag Vacancy for Residual NOI
Regarding the gross up and lag vacancy functions in AE for your residual calcs, I was curious as to if anyone on the buy-side uses them. We don’t, and it seems like only appraisers really do.
Additionally, would anyone be able to tell me the difference between the 2? Would there be an instance where one would be preferred over the other?
Even if it stabilizes the NOI, any investor would just extend the hold period, add back free rent, etc… maybe I guess if there was a ton of roll every year??
Lemme know your thoughts
Wtf sort of residual calcs are you running within AE? And if you are doing this, stop immediately. Do it in excel like everybody else so you can twist numbers however may be appropriate on a deal by deal basis.
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