By Altus Group | December 3, 2020

ARGUS Training Manager – Americas, Jessica Leal, provides her expertise regarding revenues and leases in commercial real estate and how they differ from residential revenue, and then she will walk through how this is modeled in ARGUS Enterprise. Watch the video and read the entire transcript below.




“Revenue and Lease Analysis for Commercial Real Estate in ARGUS Enterprise,” Transcript

Hello, my name is Jessica Leal, and of the training manager for America’s region. And today we’re going to talk about revenue and lease data that we input into ARGUS Enterprise. Now, this video is serving as a bit of a follow up to the Revenue and Lease Analysis for Commercial Real Estate insights article. And the article is fantastic because it talks about the importance of revenue in commercial real estate and really how it differs from residential revenue, for instance, in commercial real estate.

A lot of the times the value of a property is, you know, in some ways determined not only from the resale of that property in the future, but how much revenue is it going to generate during the holding period, which is a bit different than, of course, residential real estate. And so today we’re going to take a look at where we model revenues in ARGUS Enterprise.

So, let’s go ahead and let’s get into the solution and take a look at that. So, I currently already have a property open within ARGUS Enterprise. And in this property, there’s really two places that you can model revenues. So, the bulk of your revenue is going to come from your rent roll and you’re going to model that the tenants parent-tab. But there may also be miscellaneous revenues associated with the property as well. Now, in that revenues parent-tab, we have miscellaneous revenue, parking revenue and storage revenue that you can model in these sub-tabs. So, the revenues parent-tab is actually for any revenue that’s not tied directly to a tenant. So, it is revenue that’s coming into the property, but it is not tied to one individual tenant. So, for instance, an outdoor sign is an example of miscellaneous revenues where multiple tenants could be paying for advertisement on this outdoor site. And so it’s not coming just from one tenant individually. And that’s one of the areas in ARGUS Enterprise that we can model revenues.

Now, the other area and the bulk of the revenue actually comes from the tenants parent-tab rent roll sub-tab. And this is where we can go in and enter in all of the different leases in this particular property. And so when you’re modeling the leases, you can model the area that a particular tenant takes up and then you can model their base rent and any rental increases associated with this tenant, as well as any recoveries or reimbursements that they’re paying. And that is going to give you the bulk of revenue for this particular property. So when we take a look at reports, if I go to my property reports, parent-tab, cash flow sub-tab, we can see the potential base rent coming in for a property, the total rental revenue, the total recoveries being reimbursed for this property. And then you could see any miscellaneous revenues as well. So that outdoor sign that we spoke about a little bit earlier, giving us the total potential gross revenue for this particular property.

So that is actually it for our video today. Remember, if you need any additional training or have any questions, please feel free to reach out to us.


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