Welcome to this video. In this video, I will cover the Executive Summary tab in the ARGUS Excel Model. Let’s get into it.
The first section is the basic information. This section contains some basic facts about the property like total net rentable square feet, current vacant square feet and going-in cap rate. I can see that the heavy rollover will occur in the 2019 and 2021 in the lease expirations section. About 76% of the space will face a rollover in the next 7 years. This helps me understand the risk of the property. The Purchase Price Sensitivity section shows the different purchase prices and per square foot prices. The Disposition Sensitivity section shows the different exit cap rate and sale prices. I also can see the Uses and Sources section. I can see how many square feet had been leased out in the past few years in the Historical Leasing Velocity section. About 6,600 square feet were leased out each year on average. I can see some important variables in the Key Metrics section. The debt and refinance information are the same as I input in the Input tab. Moving down to the return analysis section. There are three return profiles: deal level, general partner, and limited partner. I can see the net operating income, cash flow, and cash on cash numbers on the deal level. Important return metrics are IRR, multiple and net profit. Usually, the GP’s IRR and multiple is greater than the deal level’s and the LP’s IRR and multiple is less than the deal level’s because of the Waterfall. I can also see the promote in each tier.
Everything looks good on the Executive Summary tab. Thanks for watching this video. I will see you in the next one.