Argus vs Excel which one is more common/better

i am a first year analyst in a brokerage firm. my current firm requires me to use Argus when i do the modelling but i found it is not as flexible as excel. and i cant learn much using Argus (don't understand the rationale behind it)
my previous job was in a buy side firm , everyone uses excel when do financial analysis. and i saw senior analysts build a model from scratch
what do you think? is excel better or Argus better? if i want to improve my modelling skill shall i use more excel?

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Comments (22)

Sep 20, 2017 - 9:40pm

It depends on the type of asset you're modeling and the complexity. It is often useful to use Argus to model out the cash flows for retail/office assets. These types of assets usually have uneven streams of cash flows due to different start dates/lease expiration dates. In addition, the complexity of the expense reimbursements can make it difficult to model out on Excel. For instance, if you have 30+ tenants in a building with different lease structures and different start/expiration dates. It would be very difficulty and tedious to model out.

Once you have figured out the cash flows from the asset. You can export it out to an Excel format (usually using your firm's template), and model out the rest and run different return analyses/promote analyses. But if you're working with multifamily or single-tenant assets, you might not need to use argus.

Hope that helps.

Sep 21, 2017 - 12:12am

Agreed with the above. I don't have an Argus license so doing my office acquisitions modeling is a real bear. I f*cking hate not having Argus for doing my office modeling. I don't see a need for self-storage, multifamily, or hotels, but definitely see it as a near necessity for retail and office analysis (at least for granular analysis).

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Oct 4, 2017 - 1:13am
therube:

Do you have to have an Argus license to use the program?

Basically. I think you can get some less expensive scholastic license, possibly. I think the neat thing about Argus is that everything is negotiable.

Array

Sep 21, 2017 - 9:07pm

Starting Argus overnight is probably a little too difficult. There is a lot of functionality to the program and it will help incrementally more once a) you know what you are doing, b) you know what you can do with it, and c) the asset (or the portfolio) is large enough to benefit from being modeled in Argus.

Yet again, I've understood that on the buy/ownership side, Argus outputs might get churned through another layer of modeling, for which Excel is used (complex financing, JV waterfalls, etc.).

Sep 22, 2017 - 2:58pm

Maybe Argus is an American thing but in London on the finance side nobody has even heard of that software. I do a lot of real estate modelling and it's always ever been in Excel.

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Sep 22, 2017 - 3:46pm
williamthesnake:

Maybe Argus is an American thing but in London on the finance side nobody has even heard of that software. I do a lot of real estate modelling and it's always ever been in Excel.

How in the world do you model office and retail properties with multiple tenants in Excel? I tried creating an Excel template for that and it's nightmarish.

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Sep 23, 2017 - 4:53am
Dances with Dachshunds:

williamthesnake:

Maybe Argus is an American thing but in London on the finance side nobody has even heard of that software. I do a lot of real estate modelling and it's always ever been in Excel.

How in the world do you model office and retail properties with multiple tenants in Excel? I tried creating an Excel template for that and it's nightmarish.

Not saying it would be easy but I don't see why it couldn't be done. If necessary some of the underlying granularity might be lost but financial models are made up numbers anyway....

Plus models often have to go to many different parties which means it's got to be in a format that everyone knows and understands i.e Excel.

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Oct 1, 2017 - 6:16pm

Doable with a detailed Inputs Summary tab at the beginning of the model.

It's doable, but more prone to error/omission with large retail/office assets than Argus.

I come from down in the valley, where mister when you're young, they bring you up to do like your daddy done

Sep 23, 2017 - 10:53pm

I always start with my own Excel template and tweak it a bit in the process depending on my assumptions and strategy. I do this since each property has a unique upside we can capitalize on.

Usually brokers/owners would send in an AE file with their OMs. I run and tweak what they have, editing the assumptions and what not, to fit my assumptions. If there is more modelling needed not possible on AE, I export and tweak them in Excel again (maybe 1/3 of the properties I analyze).

Most of the time I think an Excel model is enough but the VPs would still ask for an AE model as it has become a standard.

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