ARGUS REVIEW QUESTIONS PP2 WITH GUARANTEED ACCURATE ANSWERS |VERIFIED, Exams of Nursing

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ARGUS REVIEW QUESTIONS PP ARGUS REVIEW QUESTIONS PP2 WITH GUARANTEED ACCURATE ANSWERS |VERIFIED True or false: all reimbursable and non-reimbursable operating expenses are entered in the expense input screen - ACCURATE ANSWERS✔✔ true What are reimbursable expenses? - ACCURATE ANSWERS✔✔ expenses that the property owner will recover from the tenants -cam -taxes -insurance -repairs What is % of gross market income? - ACCURATE ANSWERS✔✔ for DCF users, this multiplies the entry in the amount1 field by the sum of total market rent and total other rental revenue

True or false: non-operating expenses will fall below the net operating income line on the cash flow. - ACCURATE ANSWERS✔✔ true True or false: non-operating expenses will not be counted towards the value of the property. - ACCURATE ANSWERS✔✔ true, however, you can turn this feature on/off in the report options while in the cash flow report What does prop 13B do? - ACCURATE ANSWERS✔✔ modify the capitalization process by adjusting the NOI to remove the tax expense, add the tax rate to the cap rate, and calculate resale of the property based on the incremental cap rate What does prop 13A do? - ACCURATE ANSWERS✔✔ calculate expenses as a percentage of the resale amount as well as any recovery of the adjusted expense What is the variable expense calculation? - ACCURATE ANSWERS✔✔ [(expense amount x % fixed) + (expense amount x % variable x % occupied)] = expense amount on cash flow What's entered into the varies window? - ACCURATE ANSWERS✔✔ revenues and/or expenses that start and stop at specific times, or change during the analysis period

What do limits do? - ACCURATE ANSWERS✔✔ provide the ability to set a lower or upper limit on the projected expense amount True or false: limits inflate by the default expense inflation rate - ACCURATE ANSWERS✔✔ true True or false: if the projected expense amount is less than the inflated lower limit or greater than the inflated upper limit, it will be overridden with the inflated limit amount in the cash flow projection - ACCURATE ANSWERS✔✔ true What are capital expenses? - ACCURATE ANSWERS✔✔ expenses that are not considered part of a property net operating income and appear below the income line on the cash flow ex: structural or capital reserves, building repairs, improvements these expenses will appear in the capital expenditures section of the cash flow report What is used to model existing lease contracts, including leased area, lease start and end dates, base rent, fixed steps, CPI increases, free rent periods, percentage rents, recoveries, leasing costs, and market renewal assumptions - ACCURATE ANSWERS✔✔ rent roll True or false: in the recoveries section of the modeling policies a user can specify / change the default recovery type - ACCURATE ANSWERS✔✔ true

True or false: a market leasing profile must be applied to each tenant - ACCURATE ANSWERS✔✔ true What does a market leasing profile do? - ACCURATE ANSWERS✔✔ allows the user to quickly put together market rates and other tenant assumptions to be applied to the rollover of tenant areas when the current leases reach their expiration What are the 2 purposes of market leasing profiles? - ACCURATE ANSWERS✔✔ 1. apply leasing assumptions to a tenant area when the current lease for that space expires

2. space absorption, or speculative leasing of vacant space True or false: a blank default market leasing profile is present in each new property model created, which is automatically applied to each tenant added to the file, unless another market leasing profile is selected

• ACCURATE ANSWERS✔✔ true upon expiration, market entails: - ACCURATE ANSWERS✔✔ renewals are processed based on the renewal probability in the market leasing profile (weighted average calculations of new and renewal rates for market rents, TI's, LC's, etc) reabsorb entails: - ACCURATE ANSWERS✔✔ all income for the space will cease when the initial lease term expires

the space goes "dark" and does not lease again. this allows the space to be "reabsorbed" or re-leased either in full or in smaller sections renew entails: - ACCURATE ANSWERS✔✔ assumes 100% renewal probability for the current renewal period. a new speculative lease is created based on the renewal market entries in the market leasing profile vacate entails: - ACCURATE ANSWERS✔✔ assumes 0% renewal probability for the current renewal period. a new speculative lease is created based on the new market entries in the market leasing profile in upon expiration, option entails: - ACCURATE ANSWERS✔✔ AE will entirely ignore the market leasing profile and will insert a new speculative lease line into the rent roll. select option only if the specific rent and parameters of the option term are known. the option lease will display "option" as the lease status, but the income will be considered speculative in upon expiration, contract renewal entails: - ACCURATE ANSWERS✔✔ AE will ignore the market leasing profile and will insert a new contract lease into the rent roll. select contract renewal if the specific rent and parameters of the renewal are known in upon expiration, month to month entails: - ACCURATE ANSWERS✔✔ AE will ignore the market leasing profile and will insert a new speculative lease line into the rent roll. this option can be used

after a lease expires and a tenant needs to occupy the space for only a few months before vacating in upon expiration, holdover entails: - ACCURATE ANSWERS✔✔ AE will ignore the market leasing profile and will insert a new speculative lease line into the rent roll. it is a renter who remains in a property after the expiration of the lease What is fixed step - % increase described as... - ACCURATE ANSWERS✔✔ increases in the initial rent over the term of a lease that can be described as either a currency amount, currency amount per square unit, or a percentage increase When do you apply a speculative lease? - ACCURATE ANSWERS✔✔ when a tenant is still negotiating their lease and have not signed a contract yet. since the tenant does not have a contract nor are they currently in the building you apply speculative lease status When using an available date that different than a tenant start date, will the actual vacancy show on the absorption & turnover line on the cash flow report, but not the individual tenant report? - ACCURATE ANSWERS✔✔ yes When using an available date that is different than the start date, will it change the amount of general vacancy calculated in the file, which may affect the effective gross revenue line item? - ACCURATE ANSWERS✔✔ yes

True or false: When using an available date that is before the start date, the space is losing potential rent (base rental revenue) - ACCURATE ANSWERS✔✔ true True or false: when using the same available and start date, AE will not report any absorption & turnover vacancy. The program assumes the space is not available, so no potential rent is shown. - ACCURATE ANSWERS✔✔ true What is percentage rent? - ACCURATE ANSWERS✔✔ percentage rent is a form of rent paid in addition to or in lieu of base rent - based upon a percentage of the tenants projected sales value with or without a breakpoint What is a breakpoint in percentage rent? - ACCURATE ANSWERS✔✔ the sales amount that must be achieved proper to the payment of any percentage rent What is a natural breakpoint? - ACCURATE ANSWERS✔✔ if a retail tenant has a natural breakpoint, percentage rent is calculated only after the natural breakpoint is reached What is the natural breakpoint formula? - ACCURATE ANSWERS✔✔ base rent / % applied to sales amount What is a zero breakpoint? - ACCURATE ANSWERS✔✔ percentage rent will be calculated on total sales

What is the formula for chargeable sales? - ACCURATE ANSWERS✔✔ sales amount - breakpoint What is the formula for percentage rent? - ACCURATE ANSWERS✔✔ chargeable sales x sales % What does the market leasing summary in property reports show? - ACCURATE ANSWERS✔✔ all the market leasing data for all the market leasing profiles that exist in a property model True or false: selecting option for upon expiration will automatically insert a new speculative lease into the tenants - rent roll - ACCURATE ANSWERS✔✔ true True or false: when applying reabsorb in the upon expiration field in the tenants - rent roll, no renewal occurs and the space remains vacant unless leased separately on the rent roll or space absorption window - ACCURATE ANSWERS✔✔ true True or false: when leases roll to the market leasing profile, by default the rents will not increase during the lease term unless fixed steps or CPI increases are applied - ACCURATE ANSWERS✔✔ true What is general vacancy used for? - ACCURATE ANSWERS✔✔ to enter the stabilized vacancy rate for the property

represents the minimum vacancy loss for the property on a monthly or annual basis With general vacancy loss, how is annual amount calculated? - ACCURATE ANSWERS✔✔ inflation can be applied to this value by selecting the ellipsis and entering a custom inflation rate % of potential gross revenue - ACCURATE ANSWERS✔✔ total tenant revenue + total other income % of total rental revenue - ACCURATE ANSWERS✔✔ scheduled base rent + CPI increases % of total tenant revenue - ACCURATE ANSWERS✔✔ total rental revenue + total other tenant revenue In market - general vacancy what are the calculation options? - ACCURATE ANSWERS✔✔ -annual amount -% of potential gross revenue -% of total rental revenue -% of total tenant revenue What does gross up revenue by absorption and turnover allow? - ACCURATE ANSWERS✔✔ add back the absorption & turnover prior to calculating the general vacancy amoutn

What is absorption and turnover? - ACCURATE ANSWERS✔✔ projected loss in rental revenue associated with the speculative lease up of currently vacant space, as well as downtime between lease terms associated with tenants moving in and out of the building When you add back the absorption & turnover to the projected revenue before calculating the general vacancy loss, this option results in the general vacancy being calculated on the potential revenue as if the building is _______% occupied - ACCURATE ANSWERS✔✔ 100% True or false: If reduce general vacancy result by absorption and turnover from the vacancy allowance calculation is selected, the cash flow will show vacancy allowance as zero if absorption and turnover vacancy is greater than the vacancy allowance - ACCURATE ANSWERS✔✔ true True or false: General vacancy can be calculated on a monthly or annual basis - ACCURATE ANSWERS✔✔ true What does the lease audit report show? - ACCURATE ANSWERS✔✔ reviewing key cash flow totals (potential + scheduled base rent, recoveries and leasing costs, on a tenant by tenant basis) Net recovery: - ACCURATE ANSWERS✔✔ all recoverable expenses are paid by the tenant based on their proportionate share of the building area

Base year stop: - ACCURATE ANSWERS✔✔ all recoverable expenses are paid by the tenant based on their proportionate share of the building area over a stop amount, which is the amount of annual recoverable expenses in the base year, or first year of the lease True or false: if the tenants lease begins prior to the analysis start date and base year stop is selected, the tenants stop will be calculated using the reimbursable expenses in the first year of the analysis - ACCURATE ANSWERS✔✔ true base year stop -1: - ACCURATE ANSWERS✔✔ the tenant will pay expenses over their prior year base year stop base year stop +1: - ACCURATE ANSWERS✔✔ tenant will pay expenses over their base year stop for the year following the else start stop amount: - ACCURATE ANSWERS✔✔ tenant will reimburse all recoverable expenses over the building stop amount entered based on their proportionate share of the building area stop amount / area - ACCURATE ANSWERS✔✔ tenants will reimburse all recoverable expenses over the building stop amount / area entered based on their proportionate share of the building area

fixed amount - ACCURATE ANSWERS✔✔ the annual recovery amount that will be paid by the tenant each year (can be a single amount or it can vary over time) fixed amount/ area - ACCURATE ANSWERS✔✔ the annual amount/area recovery that will be paid by the tenant each year (can be single amount or vary over time) market recoveries: - ACCURATE ANSWERS✔✔ recoveries will be calculated for the tenant based on the recovery set for the marketing leasing profile What are expense groups? - ACCURATE ANSWERS✔✔ used to create groups or combinations of individual recoverable operating expenses (support modeling of complex recovery structures) Max per increase limit formula for recoveries: audit reports - recovery audit - specific tenant - ACCURATE ANSWERS✔✔ year 1 recoverable amount x allocation % x % cap True or false: the gross up percent will only impact expenses with a variable portion I.e. any expenses that are less than 100% fixed - ACCURATE ANSWERS✔✔ true True or false: if the "use monthly occupancy for gross up" isn't selected in modeling policies AE will take the total annual amount and divide it by 12 to get the monthly total - ACCURATE ANSWERS✔✔ true

True or false: system recovery structures are subject to the property-wide gross up % entered in the modeling policies - ACCURATE ANSWERS✔✔ true To indicate that an item should not be included in the cash flow projection or used in the calculation of NOI what do you select - ACCURATE ANSWERS✔✔ reference only What does the "in use by" feature allow you to do? - ACCURATE ANSWERS✔✔ gives you the ability to see where a profile or index is being used True or false: The free rent tab allows a user to specify which elements of tenant income will be abated during the free rent period - ACCURATE ANSWERS✔✔ true True or false: when a free rent category is created, a user will be able to reference it for individual tenants on the rent roll and for market profiles in the market leasing windows - ACCURATE ANSWERS✔✔ true With tenant improvements, what does the % of rent year (year 1) mean - ACCURATE ANSWERS✔✔ uses the year 1 projected over the full lease term as the basis of the calculation percentages in the new TI and renew TI fields will be multiplied by the first year's rent to equal the amounts paid for improvements

Leasing commissions, currency amount: - ACCURATE ANSWERS✔✔ entries in the new LC field and the renew LC field are interpreted as fixed commission amounts leasing commissions, currency / area: - ACCURATE ANSWERS✔✔ entries in the new LC field and renew LC field are interpreted as fixed commission rate per square units of measure leasing commissions, 1st month + %: - ACCURATE ANSWERS✔✔ percentages of the remaining months in the term (100% of month 1 rent, plus a separate % of the remaining months in the term) (eg. 100% of 1st month, 2% of remaining 59 months in a 5-year lease term) leasing commissions, fixed %: - ACCURATE ANSWERS✔✔ percentages of the entire lease value over the term (eg. 4% of the total rent, including steps, less free rent over the 5 year term) leasing commissions, % by lease year: - ACCURATE ANSWERS✔✔ specify a percentage rate for each year of the lease term (eg. 5% of year 1, 4% of year 2, 3% of year 3)

leasing commissions, # of months at initial base rent: - ACCURATE ANSWERS✔✔ specify the number of months for the lease amount based on the initial base rent (eg. initial base rent * number of months = commission) leasing commissions, % of economic rent: - ACCURATE ANSWERS✔✔ percentages of economic rent (rental value as of valuation date - free rent) True or false: any type of item can be added as miscellaneous rent if it is directly related to the tenant - ACCURATE ANSWERS✔✔ true What are the inputs for miscellaneous rent? - ACCURATE ANSWERS✔✔ -amount 1 -% of rent -$/tenant/area True or false: property purchase is optional information used to calculate certain cash-on-cash metrics and returns, such as IRR - ACCURATE ANSWERS✔✔ true True or false: debt financing is used to model an unlimited number of existing or prospective loans - ACCURATE ANSWERS✔✔ true

What is a take out loan in debt financing? - ACCURATE ANSWERS✔✔ a type of long-term financing usually on a piece of real property True or false: long term take-out loans replace interim financing, such as a short-term construction loan - ACCURATE ANSWERS✔✔ true True or false: long-term take out loans are usually mortgages with fixed payments that are amortizing - ACCURATE ANSWERS✔✔ true What does the assumptions tab do? - ACCURATE ANSWERS✔✔ allows users to manage intervals used in various valuation reports in a central location to facilitate changing settings so that reports will display useful valuation comparisons True or false: with acquisitions costs (DCF) a user can reduce DCF valuation results by acquisition (purchaser) costs based on a percentage of gross valuation, net valuation or currency amount - ACCURATE ANSWERS✔✔ true What does the direct capitalization tab do? - ACCURATE ANSWERS✔✔ allows a user to calculate a property value by capitalizing the first year of net operating income (NOI) What does the property resale tab do? - ACCURATE ANSWERS✔✔ provides the ability to calculate multiple resale values used as the exit or reversionary values in the present value analysis

Resale calculation formula: - ACCURATE ANSWERS✔✔ NOI ( months after sale) / cap rate = gross sale price gross sale price - adjustments = net sale price What does the present value tab do? - ACCURATE ANSWERS✔✔ allows for the calculation of a value for the property based upon a discount rate and discounting interval or method to the projected cash flows and the property resale value over the period defined by the present value / interim rate of return (PV/IRR) date and the property resale holding period When is the discounting rate (APR) used - ACCURATE ANSWERS✔✔ when calculating the discounted value of the operational cash flows and the reversion or property resale What does the secondary discount period do? - ACCURATE ANSWERS✔✔ lets users look at a snapshot of the analysis by entering in a different PV/IRR date What does the property resale audit report provide? - ACCURATE ANSWERS✔✔ provides details of how the resale value of the property is calculated What does the IRR matrix report present? - ACCURATE ANSWERS✔✔ leveraged and unleveraged IRRs for a property based on a range of exit cap rates and going in cap rates

Where does the central purchase price on the y-axis come from? - ACCURATE ANSWERS✔✔ total price field on the property purchase tab Where does the central exit cap rate in the x-axis come from? - ACCURATE ANSWERS✔✔ the entry in the cap rate or multiplier field on the property resale tab What does the resale matrix report provide? - ACCURATE ANSWERS✔✔ the required sale price given prospective purchase price and IRR target What is found under valuation & return summary reports? - ACCURATE ANSWERS✔✔ one-page summary of the property valuation, including valuation assumptions, the sales proceeds valuation, returns and distributions, levered and unleveraged cash flows, and cash- on-cash returns What does the unleveraged present value report present? - ACCURATE ANSWERS✔✔ a summary of what we would have to negotiate in today's dollars to receive certain iRR What does the leveraged present value report present? - ACCURATE ANSWERS✔✔ a summary of what we would have to negotiate in todays dollars to receive a certain IRR when considering debt financing

What does custom dashboard do? - ACCURATE ANSWERS✔✔ allows users to customize charts, values and even images for the property What does the property summary dashboard provide? - ACCURATE ANSWERS✔✔ instant feedback about a property including key cash flow and valuation results as well as other important statistics and metrics regarding the properties operating, financial and investment performance Property information: - ACCURATE ANSWERS✔✔ displays property information, building area, analysis dates, inflation rates, vacancy and credit loss rates, occupancy rates purchase & investment: - ACCURATE ANSWERS✔✔ displays purchase price, closing costs, debt and implied equity valuation & yield: - ACCURATE ANSWERS✔✔ displays unlevereaged presentt value, direct cap value, resale cap rate, resale value, IRR and cash-on-cash yields What is a report package? - ACCURATE ANSWERS✔✔ a macro that bundles reports together to print or save them with one click of a button (created in the backstage area of the program, but can be used at the property and/or portfolio level

What are the purposes of filters? - ACCURATE ANSWERS✔✔ create and manage property filters for more flexibility in creating scenarios and reporting The filters button in the ribbon allows a user to: - ACCURATE ANSWERS✔✔ -add property filters -edit property filters -manage property filters -add/manage tenant filters What is portfolio level reporting? - ACCURATE ANSWERS✔✔ solution for consolidating and reporting property, tenant, portfolio and scenario information contained within ARGUS data warehouse What are ARGUS enterprise reports published with? - ACCURATE ANSWERS✔✔ using Microsoft SQL server reporting services (SSRS) which allows you to control the format and data presented in each report What does the cash flow detail report display? - ACCURATE ANSWERS✔✔ forecasted financial statement for a period and interval defined by the user (displayed in standard discounted cash flow DCF format detailing tenant revenue, recoveries, operating expenses, capital expenditures, and debt) What does the leasing expiration report provide? - ACCURATE ANSWERS✔✔ data needed to perform an analysis of the lease

expiration activity across a group of properties over an extended time series What is the purpose of sensitivity analysis? - ACCURATE ANSWERS✔✔ create alternative portfolio scenarios of one or more property models in a collaborative and dynamic environment Sensitivity matrix: - ACCURATE ANSWERS✔✔ allows a user to apply potential trends against portfolios / classes of property rather than make smaller adjustments to individual properties Sensitivity assumptions: - ACCURATE ANSWERS✔✔ allows a user to create filters and adjust assumptions and save them as a set Batch update: - ACCURATE ANSWERS✔✔ allows a user to model several changes simultaneously instead of performing each adjustment Sensitivity analysis allows a user to: - ACCURATE ANSWERS✔✔ -test robutness -search for errors -adjust model inputs with no impact on output -remove redundant parts -clarify communications -calibrate model with many parameters -save time

What is the sensitivity ribbon? - ACCURATE ANSWERS✔✔ found at bottom of the screen to easily browse a main set of commands What is increment % inflation? - ACCURATE ANSWERS✔✔ increases the selected inflation category percentage by the individual value What is replace % inflation? - ACCURATE ANSWERS✔✔ replaces the selected inflation category percentage by the indicated value What does the market tab include? - ACCURATE ANSWERS✔✔ assumptions that are entered in the market leasing property (determines the lease up assumptions used when a contract lease expires and rolls to market) True or false: an assumption set can be run against any scenario (if you have access permissions). - ACCURATE ANSWERS✔✔ true Sensitivity assumption sets contain: - ACCURATE ANSWERS✔✔ filters adjustments to assumptions What does the sensitivity matrix do? - ACCURATE ANSWERS✔✔ allows you to apply potential trends against portfolios / classes of properties rather than making smaller adjustments to individual properties

Sensitivity matrix allows you to: - ACCURATE ANSWERS✔✔ -pick which variables will vary -create new scenario from an existing scenario -show variances incrementing up/down -select the size of the step of the variance -show impacts of changing the scenario What does display options do in matrix? - ACCURATE ANSWERS✔✔ allow a user to select up to two KPIs to display in the matrix What does the charts of accounts structure include? - ACCURATE ANSWERS✔✔ three levels of detail (parent/header, cash flow/GL account, and job costs) and the ability to show detail or aggregate accounts for reporting at the portfolio level True or false: in charts of accounts a portfolio may only have one chart assigned at a time - ACCURATE ANSWERS✔✔ true What does COA provide? - ACCURATE ANSWERS✔✔ a budget-level entry of detail while keeping the high level chart simple for valuation team What are key benefits of utilizing COA? - ACCURATE ANSWERS✔✔ -easier to track revenues and expenses -standardizes naming usage for expenses and revenues

-helps with 3rd party accounting system integration What does the budget module do? - ACCURATE ANSWERS✔✔ eliminates spreadsheet errors and significantly reduces the budget cycle requirement, AE budget allows you to focus on the budget itself endnote the headaches of the budgeting process True or false: AE budget is fully integrated with all other modules within AE which eliminates the need for duplicate data entry and allows unlimited forecasts and re-forecasts of budget scenarios - ACCURATE ANSWERS✔✔ true True or false: AE budget provides consistency throughout the budgeting cycle - ACCURATE ANSWERS✔✔ true What are key features for the property budget module? - ACCURATE ANSWERS✔✔ -work with 3rd party property management systems to import historical financial data -allows use of COA with COA management and mapping -view historical, budget and projected results with variances and budget notes all on one screen True or false: with inserting other loans that are amortizing, they go by months - ACCURATE ANSWERS✔✔ true

Turnover rent is... - ACCURATE ANSWERS✔✔ rent we're losing during down time True or false: your tenant can only belong to one detail recovery structure at a time - ACCURATE ANSWERS✔✔ true ARUGS enterprise reports are published using _______. - ACCURATE ANSWERS✔✔ microsoft SSRS True or false: the analysis tab allows users to create and view analytical charts and graphs using any combination of properties from the portfolio

• ACCURATE ANSWERS✔✔ true True or false: you can import a chart of accounts (COA) - ACCURATE ANSWERS✔✔ true It is possible to sort the tenant rent roll by? - ACCURATE ANSWERS✔✔ -tenant name/description -suite -start date True or false: by default, reference accounts are always reimbursed by the tenant - ACCURATE ANSWERS✔✔ false True or false: operating expenses are included in the calculation of NOI - ACCURATE ANSWERS✔✔ true