ASC Expense Modeling

Question 1

In ARGUS Enterprise, which lease structure requires the tenant to pay all three major operating expense categories — property taxes, insurance, and maintenance — directly?

Accepted Answer

Triple net (NNN) lease

Answer

A triple net (NNN) lease passes all three major expense categories — taxes, insurance, and CAM/maintenance — through to the tenant rather than the landlord.

Question 2

Where in ARGUS Enterprise are recurring operating expenses such as insurance, utilities, and management fees typically entered?

Accepted Answer

The Operating Expenses input screen under the Property module

Answer

Recurring operating expenses are entered in the Operating Expenses input screen within the Property module, where each expense line can be assigned a growth rate and base amount.

Question 3

What is an expense stop in a commercial lease, as modeled in ARGUS Enterprise?

Accepted Answer

The dollar amount of expenses per square foot above which the tenant begins reimbursing the landlord

Answer

An expense stop is the per-square-foot threshold below which the landlord absorbs expenses; costs exceeding that threshold are reimbursed by the tenant.

Question 4

In ARGUS Enterprise, how is a management fee most commonly calculated for a commercial property?

Accepted Answer

As a percentage of effective gross income (EGI)

Answer

Management fees are typically modeled as a percentage of effective gross income (EGI), reflecting the fee a property manager charges for overseeing daily operations.

Question 5

What is the key distinction between operating expenses (OpEx) and capital expenditures (CapEx) when modeling in ARGUS Enterprise?

Accepted Answer

OpEx recur annually in the operating statement; CapEx are one-time or periodic improvements that are not expensed in the current period

Answer

OpEx flow through the annual operating statement reducing NOI, while CapEx represents periodic capital outlays (e.g., roof replacement, TI allowances) that sit below the NOI line in cash flow.

(ASC) Argus Software Certification Practice Test

(ASC) Argus Software Certification Practice Test

ASC Expense Modeling