RENT ROLL SECTION - REIMBURSEMENT

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Transcript

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Welcome to this video. In this video, I am going to cover the reimbursement portion in the existing rent roll section in the ARGUS Excel Model.

Reimbursement Methods

There are three reimbursement methods built-in in this model: Triple Net, Fixed Amount and Base Year Stop. Triple net reimbursement means the tenant pays the expenses of the property. Fixed amount means that tenant pays a fixed amount for the expenses regardless of the total expenses incurred. For example, the tenant and landlord agree that an annual fixed amount reimbursement of 10,000 dollars. The first-year total expenses of the property are $12,000, then the tenant pays $10,000 and the landlord pays $2,000. The second-year total expenses of the property increase to $14,000, then the tenant still pays $10,000 and the landlord pays $4,000. The tenant pays the fixed amount of $10,000 throughout its lease term. Base Year Stop is another reimbursement method where the landlord pays all expenses of the property in the first year of the lease term. This amount is also called the expense stop. The tenant starts paying for the amount exceeding the expense stop in the second year. For example, the first-year expenses of the property are 8,000 dollars and the landlord pays all of them. The second-year expenses of property are 9,000 dollars then the landlord still pays 8,000 dollars while the tenant pays the remaining 1,000 dollars.

NNN Reimbursement

As the tripe net is the most commonly used reimbursement method these days, I will select zero in the reimbursement field for NBC Marketing Services. The zero stands for triple net. And copy it down for the rest of the tenants except the last one. I will use the fixed amount for the last tenant. I click the FIXED AMOUNT button. A message pops up. Saying Fixed Amount Reimbursement is Not Selected so I will go back to select the Fixed Amount as the reimbursement method. Click the FIXED AMOUNT button again. A window called Fixed Amount pops up. We are probably already familiar with this window as we went through its functions in the Existing Rent Roll section video. This window works the same way as the rent roll window. The number of white boxes also matches the length of the lease term. I am going to say the fixed amount is 10 dollars per square foot per annum. Copy down and across. Click Save.

As you can see, I do not need to input the reimbursement method for the 4 empty suites. Let’s go to the Annual Cash Flow Summary tab. I can see the revenue from the existing rent roll has shown up. I have finished the reimbursement portion of the existing rent roll.

Thanks for watching. I will see you in the next one.