Trying to figure out if it’s worth spending $800+ and my time for an Argus course at a local university extension when I currently work as a Multifamily REPE Acquisitions Associate.
Obviously, I don’t use Argus for my current multifamily role, but I feel like it could be good to learn Argus and study how to underwrite retail for future multifamily acquisitions roles that involve a mixed-use retail component. Also just to learn the skills in case an opportunity came up at a future employer to help on other asset classes.
- Is this a waste of time?
- How prevalent are acquisitions teams that cover multiple asset classes (multifamily/industrial/retail/etc.)?
Argus is good for retail, industrial and office. Multifamily is ass for it because you don’t want to plug in every single unit
I've worked in opportunistic real estate pretty much my whole real estate career and have almost never used Argus. Argus is great at modeling out things like a large office acquisition with modified gross leases and expense pools that are fairly difficult and tedious to model in Excel. Other than that, I don't find Argus useful in any other way. I think the more you tend to focus on office and retail (malls, power centers, etc.; not just ground floor retail in a multifamily project) in a core/core-plus environment, the more important it is to use and know Argus. If you're primarily focused on opportunistic/value-add real estate, or in niche asset classes, you will probably never use Argus.
The idea that you won't use ARGUS for value-add/opportunistic retail/office/industrial deals is pure nonsense. Why would you need it for core retail but not value-add? That logic makes no sense.
Any type of commercial acquisition of an existing property with more than, let's say, 5 tenants, will benefit from having ARGUS. It's just far easier to properly model leasing assumptions and recoveries.
OP, it's not a waste of time or money to learn the one industry standard software. At under $1k its a drop in the bucket, worst case scenario you don't use it. But at least you have the skill.
Ok, well here's some more "nonsense" for you:
- Argus is not useful because of the number of tenants, it's useful because certain lease expense structures are difficult to model in Excel, like modified gross leases. There's no incremental challenge to modeling 20 NNN leases in Excel vs. 5 NNN leases; or if they are fully gross leases, the same applies. You go on to say that Argus is useful for certain expense recoveries, which is literally exactly what I said in my post is an exception for when Argus is useful. Maybe try reading more closely?
- You cannot do any serious modeling in Argus for more complicated capital structures, waterfalls, funding schedules, and the like. You are always going to need Excel for more complicated deals, which means that you'll have to use Argus static output reports that you drop into Excel. If you want to constantly update your Argus lease report and then drop it into Excel every time you need to flex assumptions, go ahead and do that.
- If you're using static Argus output in your Excel model, you're also incapable of running various sensitivity and alternate scenarios when some assumptions are in your Argus model, and others are in your Excel. And by using static output, you're also likelier to have to more actively manage version control issues.
The best thing about ARGUS by far is that everything is standardized and not some custom built excel model, which makes collaboration WAY easier when dealing with complex commercial rent rolls. You can have somebody build out the ARGUS model for a 50 tenant mall or office building and then if somebody else wants to quickly review or tweak the TI costs or market rents or renewal probabilities or sales/% rent of a specific tenant or group of tenants they know exactly where to locate and update the input and can do it with a few clicks. I can't imagine how overwhelming it would be if somebody sent me a 50+ tenant commercial model they custom built in excel and asked for a review or some tweaks, especially if the resulting cash flow looked off and I had a trace back the error source (is an input off or is a formula in the model off???). I would hate working somewhere that does large commercial deals and doesn't use ARGUS....
Also to OP, if $800 is not a big issue then I see no downside to learning it. It's unfortunate the classes are so expensive, but the good news is they are not very time consuming. I knocked out my ARGUS certification back in the day after about 1 week of spending a few hours a day prepping, I believe it was only like 20 hours overall of work. It's been a while tho and not sure if anything major has changed.
We look at all asset classes and are value-add/opportunistic and use Argus pretty much every day for office, retail and industrial acquisitions (as do every one of the brokers/sponsors selling them). We wouldn't hire someone that didn't have experience with it (at a bare minimum, a course like you're mentioning)
Thank you all for the feedback so far. I’m going to proceed with the course.
Which course? UCLA's?
Yes
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