Portfolio Analysis Flashcards

In ARGUS Enterprise, what is the purpose of the 'Portfolio Rebalancing' scenario feature?

Answer: Modeling the financial impact of buying and selling specific assets to optimize the portfolio's risk-return profile

Portfolio Rebalancing scenarios model the effect of acquisitions and dispositions to optimize the overall risk-return profile without requiring separate analysis files.

Which ARGUS Enterprise assumption most directly affects the terminal value of a portfolio asset at disposition?

Answer: Going-out (exit) cap rate applied to the final year's NOI

The exit cap rate applied to the terminal year's NOI determines the resale value, making it the single most influential assumption on disposition proceeds.

In a ARGUS Enterprise portfolio with both core and opportunistic assets, how should the analyst handle differing hold periods in a consolidated return analysis?

Answer: Model each asset with its own hold period and use portfolio-level IRR that accounts for staggered exit proceeds

ARGUS Enterprise accommodates varying hold periods per asset, and the portfolio-level IRR correctly incorporates staggered exit proceeds at each asset's actual disposition date.

What happens to the portfolio's levered IRR in ARGUS Enterprise if the blended loan interest rate increases by 100 basis points, all else equal?

Answer: Levered IRR decreases because higher debt costs reduce cash available to equity investors

Higher interest rates increase debt service costs, reducing equity cash flow and therefore the levered IRR.

In ARGUS Enterprise, the 'Gross Asset Value' (GAV) at the portfolio level is best defined as:

Answer: The sum of each asset's estimated market value based on its stabilized NOI and applicable cap rate

GAV is the aggregate estimated market value of all assets, typically derived by capitalizing each asset's stabilized NOI at its applicable market cap rate.

When assessing portfolio concentration risk in ARGUS Enterprise, which data view best highlights overexposure to a single tenant or market?

Answer: Rent Roll Heat Map or Tenant Concentration Report

A Rent Roll Heat Map or Tenant Concentration Report aggregates exposure by tenant or market across all assets, making concentration risk immediately visible.

In ARGUS Enterprise, if a portfolio analyst wants to evaluate the impact of a recession scenario, which combination of adjustments is most appropriate?

Answer: Increase exit cap rates, reduce rent growth, increase vacancy, and extend lease-up periods

A recession scenario should stress multiple interconnected assumptions: softer rents, higher vacancy, longer lease-up, and higher cap rates (lower valuations) simultaneously.