In Argus, is there a way to have different market rent assumptions for a renewal vs new lease for the same tenant space?
This is for an office building. I have a tenant occupying a large block of space in the building with a lease expiring soon, and I want to model the renewal rent to be slightly below market. They don't have an option, but the rationale is that there would be a discount due to the size of the space, and because the landlord wouldn't have to spend time and capital trying to re-lease the space (potentially having to break it up into smaller units). But for the scenario that they don't renew, I want it lease up at market rent (subject to this tenant's renewal probability). Is there a way to do this in argus?
Not sure what exactly you are asking. You can certainly create an MLA that is only used for that specific space. Each MLA has New and Renewal Assumptions that get blended based on the tenants renewal probability (assuming you mark it at "Market" upon Expiration). Essentially what makes the difference is what you mark them doing upon expiration. Market will blend them, renew will use the renewal MLA for the space, vacate will use the new MLA, and reabsorb will allow you to split the space up into multiple.
What I meant is that I want to use different rent projections for the same space depending on whether the tenant renews or not. But I actually think I figured it out - under market > market rent, you can enter in different numbers for "new market rent" and "renew market rent". So it's one MLA, just with different rents depending on whether the tenant renews or not. Thanks!
Yessir.
I'm running into a similar scenario and am looking at the Market Rent section, but when I alter the Renew Market Rent section from Same as New it doesn't seem to have any impact to the tenant's cashfow. Is there an area where I have to turn this "on", so to speak?
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