Argus exam 1
What type of recovery method do retail tenants usually have? - Answer-Net; retail tenants primarily
reimburse net operating expenses.
What type of recovery method do office tenants usually have? - Answer-Can be either base stop or net
expenses depending on lease format and building location.
Assume a retail tenant has a net recovery method and pays $20 PSF in rent for the space they occupy
and they reimburse $7 to the landlord for net operating expenses. If an office tenant with base stop
recovery were to pay equivalent rent and recoveries what would be the total rent for year 1? - Answer-
$27 PSF; Office tenant's rent for year 1 includes both rent and recoveries. In year 2, the office tenant
would reimburse any increase in expenses over the $7 base stop included in their rent.
An office tenant has a $7 PSF expense stop. Current year operating expenses recoverable are $12 PSF.
What will be the $ PSF expense recovery the tenant is responsible to pay the landlord? - Answer-$5
If utilities operating expense is $100,000 annually and 50% fixed, what is the expense calculated as if the
building is 50% occupied during year 1? - Answer-Fixed: (% Fixed x OE) = (50% x 100,000)= $50,000
Variable: (% Var x %Occ x OE) = (50% x 50% x 100,000)= 25,000
ANS: $75,000
Which is an example of a common miscellaneous revenue for a commercial property? - Answer-
Antenna, Vending, Parking
, A retail tenant pays a 3% percentage rent based on a natural breakpoint. Their lease is for 1,000 SF at
$15 PSF. What is natural breakpoint? - Answer-Natural Breakpoint= (Total rent / % rent)
(1000*15)= $15,000 Ann Rent/3% =
ANS: $500,000
A retail tenant pays a 3% percentage rent based on a natural breakpoint. Their lease is for 1,000 SF at
$15 PSF. If the tenant's sales are $600,000, what will they have to pay to the landlord in percentage
rent? - Answer-(Sales-Breakpoint)*% Rent
600,000-500,000= 100,000*3%= $3,000 in percentage rent
Which of the following expenses is typically considered a capital expense? - Answer-Replacement
Reserves; usually expressed in $/PSF number that is money set aside for minor capital repairs that occur
during the course of ownership. This replacement reserve is also known as capital reserve, reserves,
reserve for replacement
A tenant's lease begins in March 2020 and they have leasing costs of $15 PSF for TI and 5% leasing
commissions. In what month and year does that capital expense appear in the cash flow by default? -
Answer-Tenant Improvements and Leasing commissions appear by default in the first month of the first
year of a tenant's lease term
ANS: March 2020
If a tenant is shown on the rent roll as CONTRACT, this would imply what? - Answer-Lease has been fully
executed (signed) by the tenant and the landlord.
If a tenant is shown on the rent roll as SPECULATIVE, this would imply what? - Answer-A lease that is still
being negotiated and not yet signed.
On the rent roll tab under the Upon Expiration drop-down menu, which of the following would you
select if you wanted Argus to apply the weighted average between the new and renewal information
input into the market leasing assumptions for new tenant? - Answer-Market
What type of recovery method do retail tenants usually have? - Answer-Net; retail tenants primarily
reimburse net operating expenses.
What type of recovery method do office tenants usually have? - Answer-Can be either base stop or net
expenses depending on lease format and building location.
Assume a retail tenant has a net recovery method and pays $20 PSF in rent for the space they occupy
and they reimburse $7 to the landlord for net operating expenses. If an office tenant with base stop
recovery were to pay equivalent rent and recoveries what would be the total rent for year 1? - Answer-
$27 PSF; Office tenant's rent for year 1 includes both rent and recoveries. In year 2, the office tenant
would reimburse any increase in expenses over the $7 base stop included in their rent.
An office tenant has a $7 PSF expense stop. Current year operating expenses recoverable are $12 PSF.
What will be the $ PSF expense recovery the tenant is responsible to pay the landlord? - Answer-$5
If utilities operating expense is $100,000 annually and 50% fixed, what is the expense calculated as if the
building is 50% occupied during year 1? - Answer-Fixed: (% Fixed x OE) = (50% x 100,000)= $50,000
Variable: (% Var x %Occ x OE) = (50% x 50% x 100,000)= 25,000
ANS: $75,000
Which is an example of a common miscellaneous revenue for a commercial property? - Answer-
Antenna, Vending, Parking
, A retail tenant pays a 3% percentage rent based on a natural breakpoint. Their lease is for 1,000 SF at
$15 PSF. What is natural breakpoint? - Answer-Natural Breakpoint= (Total rent / % rent)
(1000*15)= $15,000 Ann Rent/3% =
ANS: $500,000
A retail tenant pays a 3% percentage rent based on a natural breakpoint. Their lease is for 1,000 SF at
$15 PSF. If the tenant's sales are $600,000, what will they have to pay to the landlord in percentage
rent? - Answer-(Sales-Breakpoint)*% Rent
600,000-500,000= 100,000*3%= $3,000 in percentage rent
Which of the following expenses is typically considered a capital expense? - Answer-Replacement
Reserves; usually expressed in $/PSF number that is money set aside for minor capital repairs that occur
during the course of ownership. This replacement reserve is also known as capital reserve, reserves,
reserve for replacement
A tenant's lease begins in March 2020 and they have leasing costs of $15 PSF for TI and 5% leasing
commissions. In what month and year does that capital expense appear in the cash flow by default? -
Answer-Tenant Improvements and Leasing commissions appear by default in the first month of the first
year of a tenant's lease term
ANS: March 2020
If a tenant is shown on the rent roll as CONTRACT, this would imply what? - Answer-Lease has been fully
executed (signed) by the tenant and the landlord.
If a tenant is shown on the rent roll as SPECULATIVE, this would imply what? - Answer-A lease that is still
being negotiated and not yet signed.
On the rent roll tab under the Upon Expiration drop-down menu, which of the following would you
select if you wanted Argus to apply the weighted average between the new and renewal information
input into the market leasing assumptions for new tenant? - Answer-Market
