Is there a way in Argus to set the inflation/rent growth start date to prior to the analysis start date?
I need to model the cash flow for a proposed building upon completion, so the analysis start date will be a few years into the future. However, I want to input market rent and exense assumptions as of a current date and have them grown out at the market inflation rate so that by the building completion date (the analysis start), they will have already been grown out.
For example, if my market rent assumption is $10.00/SF, and the completion date is 1 year into the future, I want to input $10.00/SF as the market leasing assumption and have this automatically trended to $10.30 (based on 3% annual rent growth) by the analysis start date.
I tried going to timing>override scenario settings>use inflation begin date, and seleting a date prior to the analysis start, but this seems to only have an effect if I set this to AFTER the analysis begin date, but not before.
Is there any way to do this? Thanks for any help
What it sounds like you need is a cash flow excel toggle based on date. Something simple like an if statement that brings operating income into the cash flow statement, so long as XYZ parameters are met. The parameters will be your start date, and you can model the cash flow monthly, or annually, and each one of those identifiers are a period. Once you surpass your starting period of the analysis, then the operating income will pull to the cash flow, rather than being 0
It’s worth noting that even if you’re only calculating for a building being complete in a few years, you still want to model the periods of 0cash flow. This sounds similar to a development proforma, and you’ll want to calculate your IRR, or analysis start date, as of the present date.
You're right, but in this case this is for an appraisal and the client wants us to show the value upon completion, so in other words only the cash flows from the completion date forward... if that makes sense.
I’m pretty sure it does this automatically. Just don’t start collecting rents/revenues until desired. But market and expense inflation should calculate from analysis begin
To clarify, what I'm saying is that I am using the completion date as the analysis begin date, which is in the future. So it doesn't know to start trending the market rent as of today
Just start the analysis today. It’ll then trend properly. And set your leasing and capital spend accordingly. Than use excel for IRR calculation for appropriate dates.
I'm facing something similar, and what I did was set the analysis start date to the period I want to input my market rent assumptions (i.e. at the date market rent is = $10.00) and then set the reporting date to the beginning of when I want to start showing the cash flow (i.e. 1 year after analysis start date). It seems to have worked in my situation, but I wanted to see if there's anything that I may not be considering.
Just start analysis today and run report for future time period
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