Recommendation: ARGUS Skills to Develop
Hi all,
I enrolled in the ARGUS training course as I'd like to have some ARGUS experience for future job opportunities. I finished the course and feel like I'm decent with the fundamentals (i.e. creating property/portfolio cashflows, and exporting it to excel). However, the course was very expensive, and I want to get my money's worth...
What are some of the more moderately advanced (i.e. analyst/associate level) features that I should be exploring in the two months I have remaining on my license? I know it's a very broad question so let me try asking it another way; outside of the bare essentials, what are some of the features that you most commonly use, or think other should use more often/learn more about?
I know different career paths use it different ways, but I'm curious to hear from the perspective of acquisitions and investment sales underwriting.
Based on the most helpful WSO content, here are some recommendations for developing your ARGUS skills further, especially from the perspective of acquisitions and investment sales underwriting:
Key Features to Explore:
Advanced Assumptions and Sensitivity Analysis:
Supporting Schedules:
Debt Assumptions:
Lease Analysis:
Cash Flow Runs:
Practical Tips:
Hands-On Practice:
Combining ARGUS with Excel:
Career Path Insights:
Investment Sales:
Acquisitions:
By focusing on these advanced features and practical tips, you can maximize the value of your ARGUS training and be better prepared for future job opportunities in acquisitions and investment sales underwriting.
Sources: Life in Acquisitions (Analyst/Associate), Life in Acquisitions (Analyst/Associate), ARGUS certification difficulty/time to complete, New Analyst Struggling with Argus, Q&A: 3rd year ER analyst
Recoveries. I cannot stress this enough. Learn how Argus calculates recoveries and base year stops. Learn how expenses are passed and if you are successful you might be able to call bullshit on the significant amount of brokers that will try to fool you on that part.
Arguably the most important part of any analysis. When I first started I was like a deer in headlights when it came to NNN, mod gross and especially office BYS
Along these lines, learn how to use expense groups and reference-only expenses - these make life a lot easier for modeling recoveries.
Can you explain why reference only accounts are used? What do they do? I've heard people refer to that before and idk what it is.
As the other poster said, recoveries. Everything else in Argus is simple, but recoveries are tough to get the hand of (once it clicks it's a breeze though).
Otherwise I would just look at modeling more complex market leasing assumptions i.e. tenant vacates, backfill on a short term deal, then rolls to market or a larger unit vacates, it gets reabsorbed and redemised into multiple new units.
I had the most trouble modeling expense pool for large power centers/open air malls. If you could find a case study or an IS analyst with experience in retail expense pools - I think this would be very helpful moving forward as office recoveries are generally easier. Also, look into modeling yoy caps on expenses in those recovery structures (for ex admin fees). The argus enterprise call in number is helpful for modeling questions also.
Agree - contrary to popular belief because enclosed malls are operationally more complex, large scale open air centres are way more complex to model in Argus because you end up with different expense pools, caps on controllables/non-controllables, exclusions based on different definitions of "shopping centre", tax parcel allocations, etc etc.
Couldn't agree more with everything said above. Argus isn't rocket science however modeling recovery structures for a large retail shopping center with national anchors and multiple CAM pools, outparcels, etc. can be tedious and difficult. But once you grasp it, it'll give you the upper hand when looking at deals.
Agree with the above, recoveries and rollover are essentially why people use ARGUS so understand the details there. I would also say it's important to be able to explain the different vacancy types , especially as it relates to tenant rollover.
recoveries, recoveries, recoveries.... complexity is as follows; open air shopping centers (think grocery anchored properties), then you have office assets with base year stops, and then industrial. Industrial is easy, almost always absolute NNN where 100% of the expenses are simply passed through to each tenant on a pro-rata share basis.
Also -- understand the difference between vacating a tenant at their lease expiration, vs rolling them to market, and understand how TI's and LC's differ for those two scenarios.
Lastly, get used to the different reports in the report section. In my opinion the "audit report" tab is your best friend. You can verify recoveries there.
Audit Report is by far the best way to check your work in Argus and is often overlooked by analysts.
Thanks for this
Piggy backing off this and a shameless request to offload some of my work but say you have just received an Argus from a broker for an open air retail center with varying recovery types and no lease abstracts so all you have to go off is the Argus. What would you look for specifically in relation to recoveries to snuff out any BS? Thanks in advance.
1. One or Two generic CAM pools for all of the tenants. This would be a red flag. Check for controllable and uncontrollable expense pools.
2. Check the audit report - Expense Recovery - at the bottom it will list out each expense and the percentage recovered. If it is over 100% + any admin fee amounts something may be off. And check the last 3-5 years of your hold period.
Will add another I haven't seen - being able to model historical capital amortization income and add that as part of the recoveries and admin fee structure.
Less often, you can model future capex as well as recovery from tenants, but it is rare for that aspect.
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