Why do people use Argus?

argus sucks

Argus is excellent at what it does. if you have a big office building with 20 tenants or a big mall, argus organizes the tenant, recoveries, and other things, so you can keep track of the asset as well as put a an accurate(ish) value on it.

ARGUS is a necessary evil. I'd much rather use excel but ARGUS is really good at organizing numbers

Try to model an acquisition with 40 leases, all with a hodgepodge of reimbursement structures and renewal assumptions and escalation rates and rent abatements, etc. in excel, then try to do it in Argus. One of them is much faster (hint: it's Argus)

Actually, it would be significantly easier to model those leases in Excel. (Source: I've modeled both domestic and international retail assets with hundreds of leases in both Argus and Excel.) As previously stated, Argus is not a good technological solution. If they developers at the Altus Group were more competent in real estate, they would be working at a real estate firm and not a sub-par software development firm that seeks to capitalize off of gaps in the market.

There are a few questions that need to be answered to fully answer your question. i) Why does Argus exist? ii) Why is Argus popular? iii) Why is Argus objectively a bad technological solution.

i) I assume we are all fairly familiar with why a technological solution exists. But why does Argus exist in its current state? Well, simply put, real estate is not exactly an industry that swiftly adopts emerging technology. In my experience, the more forward-thinking real estate firms are behind in technology maybe 5+ years, while some of the more traditional real estate firms may be behind in technology 10 - 15+ years. Argus exists to fill this gap.

ii) Argus was designed to be as profitable as possible, which is only logical. Therefore, its target audience is US/EU based investment firms doing business in said countries, which is probably 50%+ of the world's invest-able real estate. Also, given these markets are more mature, there are more known and generally accepted leases structures (Gross v. NNN), where as emerging markets can differ materially, even at the state / city level. Therefore, given most US based firms do business in the US, Argus meets the majority of their needs for simple modeling.

More importantly, Argus sets a "language" as it were. Modeling is just as much an art as it is a skill. Different end users can get to the same answer with different layouts / logic / etc. There is no "right" way. Thus, if you have 10 different models that work for a US office development, it is very hard to sit there and get to the "answer" as a MD. While Argus is arduous (and once again, not a good technological solution), the functionality you lose is offset by the commonality you gain from the models you review / adjust. This is the true value of Argus.

iii) Argus is a poor solution because it targets and ever decreasing audience. There has been significant grow in emerging markets and I fully expect Asia Pacific to be a more significant portion of overall transaction activity over the next decade+. Argus is not well designed to handle assets with complex lease structures, multiple currencies, complex debt structures or etc.

For international projects, Excel is still the norm because it gives an end user the flexibility to accurate model reality as opposed to trying to bastardize a product targeted towards a US/EU audience in order to meet a norm.

Conclusion: Argus sucks. But its an industry norm because it sets a baseline under which buyers, sellers, appraisers and so forth can compare models by simply kicking over an Argus file and loading it into the program. Whereas it is much more difficult / time consuming to try to understand how Joe-Schmo at Firm A built his Excel model once upon a time.

Argus is a joke, we had some brokers (One of the leading in the country) do land residual valuations for us and went out to meet them and ask them about their numbers and they hadn't a fucking clue where they were coming or what they were implying, just "Argus gave us this". Additionally it's so rigid that it makes it a bitch to adjust cashflows to outlier/unique situations.

If you are just trying to ball-park cash flows, you could do it all in excel. If you need to get extremely granular in your analysis and do a lot of different scenarios/sensitivities, while still maintaining accuracy, Argus is way easier. There are a lot of things that would take an extremely long time to model out in excel if you had to recreate some of the switches/toggles that Argus provides. Could you do it? Yes. Would it be practical/efficient if you have a high volume of deals you are trying to analyze? No.

I appreciate that we're such a bunch of nerds on this sub-forum that Argus is a topic we can all get riled up about time and again in repetitive threads. I'd start grousing about the forced AE switch, but it's past my coffee wake up hour on Monday morning...

carry on!

I've used both Excel pro formas from scratch and Argus, and I have to say, Argus is significantly easier to use once you spend the time to figure it out and learn the commands. Recovery structures and being able to automate market profiles for leases that come up after they expire is significantly easier to use on Argus than Excel. What do people not like about Argus? If you understand pro formas on a deep level, and you can EXPLAIN and understand what all the numbers mean behind the assumptions that you choose, then I think Argus is much quicker and efficient.

Perhaps theres excel spreadsheets already made that I don't know about that can be better than Argus? Enlighten me guys =D

Are these comments mostly for the DCF version or newer AE version?