ASC Market Assumptions 2

Question 1

In ARGUS Enterprise, which market assumption drives the calculation of lease renewal probability for expiring tenants?

Accepted Answer

Renewal probability percentage

Answer

Renewal probability is the market assumption that determines the likelihood an expiring tenant will renew rather than vacate.

Question 2

When setting market leasing assumptions in ARGUS, what does 'months vacant' represent?

Accepted Answer

Time between lease expiration and new tenant occupancy

Answer

Months vacant (or downtime) is the assumed period a space sits empty between the departure of one tenant and occupancy by the next.

Question 3

A property analyst sets a market rent growth rate of 3% annually in ARGUS. How does this affect new leases signed in year three?

Accepted Answer

New lease rents are inflated by 3% compounded over three years from the base market rent

Answer

ARGUS applies the market rent growth rate cumulatively each year, so year-three new leases reflect market rent escalated by 3% compounded for three periods.

Question 4

Which input in ARGUS market leasing assumptions controls how quickly unleased space is expected to be absorbed by new tenants?

Accepted Answer

Months of absorption

Answer

Months of absorption specifies the time period over which vacant space is expected to be leased up at the market's assumed pace.

Question 5

In ARGUS, what is the typical effect of increasing the market rent growth rate assumption while holding all other inputs constant?

Accepted Answer

Property value increases due to higher projected NOI

Answer

Higher market rent growth produces higher projected rents on new and renewal leases, increasing NOI and therefore property value.

(ASC) Argus Software Certification Practice Test

(ASC) Argus Software Certification Practice Test

ASC Market Assumptions 2