Argus & Expense Reimbursements

edited for clarity

I have a question related to Argus and how the program calculates expense reimbursements when using a "Base Year" recovery type. To my eye, it is clearly calculating them incorrectly.

First, here is a screenshot - https://imgurcom/a/FPCZT (I have removed the "." as I can't post otherwise)

So we have three FS (base year) 5,000 sf leases starting 1/1/18; 7/1/18; and 12/1/18. As I understand it, this means that each tenant should start paying their reimbursements on 1/1/19, 7/1/19, and 12/1/19 respectively. So for the calendar year 2019, this would mean that we should expect the tenants to have paid 12 months of reimbursements, 6 months of reimbursements, and 1 month of reimbursements respectively. However, as you can see Argus is calculating the same reimbursement amount for each tenant...

What am I missing?

Pre-edit:

Basically, the problem is that Argus seems to be calculating the same exact expense reimbursement figure regardless of when the lease started. So for instance, let's say I input one lease starting 1/1/18 (with Base Year recoveries) and a second lease starting 7/1/18 (base year recoveries). Now, as I understand it, this would mean that tenant 1 should start paying their pro-rata share of any increases on those base year expenses starting 1/1/19 and tenant should start paying their share starting 7/1/19. But when I look at the audit report, it shows both tenants paying the same amount (tenant 1's amount) in year 2. This seems obviously wrong to me. Am I missing something?

Thank you for any help/input.

example screenshot https://imgurcom/a/FPCZT (removed "." as I can't post otherwise)

 

Hmm, based on your comment, maybe I just misunderstand base year reimbursements. I was under the impression that when a tenant signs a full-service lease w/ a base year expense stop that they were not obligated to start paying reimbursements until the start of the second lease year (not whenever the start of the next calendar year is)? I take it this is wrong?

 

Argus will use the analyis year 1 as the base year for every tenant unless you input a base stop amount. You should do "base stop amount" and put in the actual stop amount for each tenant. should fix your issue.

 

If using enterprise, check the 'inflation' tab under 'Market'. You're probably using an incorrect one of calendar/calendar, calendar/fiscal, etc. This affects how the reimbursements are working. I.e., probably a calendar vs. fiscal year issue.

"Who am I? I'm the guy that does his job. You must be the other guy."
 

OK, just looked at the screenshot. The poster above is correct in that it will default to the beginning year for expenses. So, even if the tenants start at the end of the first year, that will be the baseline for the expenses going forward. This is why it's important to read leases, as some will imply different base years. If you have a tenant that reimburses over a FY basis that's different than your calendar year, for example, you have to adjust the base year amount manually.

"Who am I? I'm the guy that does his job. You must be the other guy."
 

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