PROPERTY MARKET

Property Market Section & Tabs

Keyboard shortcut: Ctrl + Alt + M

The Property Market section is used to create, define and edit (i) named item expedites for a single property; & (ii) vacancy and credit loss assumptions. This section is used for the input of all market assumptions related to the market as a whole (as opposed to market assumptions related to tenant leases, which are input in the Tenant Market section).

Article contents:

• Inflation
• Market Lease
  • Show/Hide Columns
  • Market Lease Columns
• Renewal Probability
• Downtime
• Vacancy/Credit Loss
• GVAC Calculations

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Inflation

Ctrl + Alt displays the numeric keyboard shortcut.

The Inflation tab is used to create named inflation rates that define how inputs grow over time within the analysis period.

Inflation named items are applicable in the following areas of the application:

• Other named items
• Line Items
• Rent Roll Misc Revenue and Sales
• Market Leases

There are seven (7) named inflations that are automatically included with each property file:

• *BldgCapital - Building Capital Inflation
• *Expense - Expense Inflation
• *MarketRent - Market Rent Inflation
• *MiscInc - Misc. Income Inflation
• *None - No Inflation
• *Sales - Sales Inflation
• *TenantCapital - Tenant Capital Inflation

These named inflations have (i) a darker gray background in the Code and Name fields, (ii) a Code that is preceded by an "*," and (iii) Codes and Names that are uneditable.

They also have a default Input Type of "Basic" and a default Amt (amount) of "0" which may be edited by the user (with the exception of "*None - No Inflation," which has an uneditable Input Type of "None"). However, upon the addition of a new property, a default inflation rate that is applicable to all six automatically included named inflations (*None is the exception) may be defined (any of the originally defined default inflation rates may be edited by the user).

Info: Read about #, Code and Name throughout the Application

Inflation Input Types

System Inflation

*None is the non-editable, system-defined named Inflation (i.e., no inflation). *None should be used when the market assumption or line item is assumed to remain flat throughout the analysis period.

Basic Inflation

Basic Inflation allows for single value that does not change over the analysis period.

Amt is the percentage value inflation rate that is interpreted by the assigned Compound Type. 3% should be entered as "3" rather than ".03".

Compound Type interprets how the value entered in the Amt field inflates the assumption or line item to which it is attached. Options include:

• Annual (default) inflates the assumption or line item to which it is attached on an annual basis.
• Monthly inflates the assumption or line item to which it is attached on a monthly basis by converting the annual Amt entered to a corresponding compounded monthly amount that "trues-up" to the annual inflation Amt on the Effective Month.

Effective Month determines the month upon which the annual inflation value entered will occur (for "Annual" Compound Type) or will "True-up" (for "Monthly" Compound Type). Options include:

• Market Effective Month - Inflation (or true-up) will occur on the month identified as the Market Effective Month in the Property section on the Property Settings tab.
• Recovery Effective Month - Inflation (or true-up) will occur on the month identified as the Recovery Effective Month in the Property section on the Property Settings tab.
• Any month - Inflation (or true-up) will occur on the month selected.

Example 1:

• Analysis Begin: 1/1/2024
• Market Effective Month: Analysis Begin
• Amt: 3
• Effective Month: Market Effective Month

	Inflation Factor
Date	Annual	Monthly
1/24	1.0000	1.0000
2/24	1.0000	1.0025
3/24	1.0000	1.0049
4/24	1.0000	1.0074
5/24	1.0000	1.0099
6/24	1.0000	1.0124
7/24	1.0000	1.0149
8/24	1.0000	1.0174
9/24	1.0000	1.0199
10/24	1.0000	1.0224
11/24	1.0000	1.0249
12/24	1.0000	1.0275
1/25	1.0300	1.0300
2/25	1.0300	1.0325
3/25	1.0300	1.0351
4/25	1.0300	1.0376
5/25	1.0300	1.0402
6/25	1.0300	1.0428
7/25	1.0300	1.0453
8/25	1.0300	1.0479
9/25	1.0300	1.0505
10/25	1.0300	1.0531
11/25	1.0300	1.0557
12/25	1.0300	1.0583
1/26	1.0609	1.0609

Example 2: 

• Analysis Begin: 1/1/2024
• Market Effective Month: Analysis Begin
• Amt: 3
• Effective Month: July

	Inflation Factor
Date	Annual	Monthly
1/24	1.0000	1.0149
2/24	1.0000	1.0174
3/24	1.0000	1.0199
4/24	1.0000	1.0224
5/24	1.0000	1.0249
6/24	1.0000	1.0275
7/24	1.0300	1.0300
8/24	1.0300	1.0325
9/24	1.0300	1.0351
10/24	1.0300	1.0376
11/24	1.0300	1.0402
12/24	1.0300	1.0428
1/25	1.0300	1.0453
2/25	1.0300	1.0479
3/25	1.0300	1.0505
4/25	1.0300	1.0531
5/25	1.0300	1.0557
6/25	1.0300	1.0583
7/25	1.0609	1.0609
8/25	1.0609	1.0635
9/25	1.0609	1.0661
10/25	1.0609	1.0688
11/25	1.0609	1.0714
12/25	1.0609	1.0741
1/26	1.0609	1.0767

Basic Inflation

Detailed Inflation

Detailed Inflation allows for changing rates on an annual basis.

Compound Type interprets how the value entered in the Amt field inflates the assumption or line item to which it is attached. Options include:

• Annual (default) inflates the assumption or line item to which it is attached on an annual basis.
• Monthly inflates the assumption or line item to which it is attached on a monthly basis by converting the annual Amt entered to a corresponding compounded monthly amount that "trues-up" to the annual inflation Amt on the Effective Month.

Effective Month

• Market Effective Month - Inflation (or true-up) will occur on the month identified as the Market Effective Month in the Property section Property Settings tab.
• Recovery Effective Month - Inflation (or true-up) will occur on the month identified as the Recovery Effective Month in the Property section Property Settings tab.
• Any month - Inflation (or true-up) will occur on the month selected.

Year is the year of the analysis Term commencing on the Analysis Begin date. It is auto-incremented by 1 year as new rows are added and is read-only. The inflation value entered for the final year of input will continue for the remainder of the analysis.

Amt is the percentage value inflation rate interpreted by the assigned Compound Type. 3% should be entered as "3" rather than ".03".

 adds a row beneath the current row,  deletes the current row.

Detailed Inflation

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Market Lease

Ctrl + Alt displays the numeric keyboard shortcut.

Accessible from both the Rent Roll and Property Market sections, the Market Lease tab is used to manage named MLA records (i.e., Market Lease assumptions) for a property.

Market Leases consist of the components of a lease at market. They are used in the Rent Roll to determine the assumptions to be applied to a lease record subsequent to the lease End Date when the Renewal Type is set to Weighted, Renew or Vacate.

Show/Hide Columns

Located on the Market Lease Tab Tools Menu, Show/Hide Columns allows a user to select which columns on the Market Lease tab are visible or in-use. The primary usage is to make Market Lease screen navigation more efficient by hiding the columns that are not in use for a property.

1. On the Market Lease Tab Tools Menu, click ; the "Show/Hide Columns" window opens.
2. Select the columns that will be visible by clicking the check boxes.
3. Click the "X" in the upper right corner to apply the changes and exit the pop-up window.

Show/Hide Columns

Market Lease Columns

The Market Lease screen includes the following columns:

• Code
• Name
• Term (Mos)
• Downtime
• Renewal Probability
• Rent
• Free Rent
• Recovery
• Tenant Improvements
• Leasing Commissions
• Other Capital
• Sales
• Breakpoint
• Overage
• Subsequent Market

Code & Name

Info: Read about #, Code and Name throughout the Application

Term (Mos)

Term is the length of the Market Lease, in months. The default is 60 months unless another value is assigned in the Property section on the Defaults tab. A value of zero is not allowed.

Downtime

Downtime is the amount of time (in months) necessary to replace a lease upon expiration when the tenant vacates (i.e., the projected vacant time for any Market Lease).

Note: For Downtime and many of the Market Lease fields that follow, data may be entered either in (i) a Basic carousel state whereby market lease assumptions are entered directly; or (ii) a Named Item carousel state whereby assumptions are entered as named items in the Property Market or Tenant Market sections and then referenced herein.

Basic Downtime

Basic Downtime allows for the entry of a single value representing the number of months of downtime that does not change over the analysis period. The Basic state with 6 months of downtime is the default unless another value is assigned in the Property section on the Defaults tab.

Market Lease - Basic Downtime

Named Item Downtime

Named Item Downtime is a drop-down menu of named item expedites created and defined in the Property Market section on the Downtime tab. Named Item Downtime must be used when the number of months of downtime will change throughout the analysis term.

Market Lease - Named Item Downtime

Renewal Probability

Renewal Probability reflects the probability percentage that a tenant renews upon expiration of the lease term.

When a Renewal Type of "Weighted" is selected on the Rent Roll, the Renewal Probability is used to calculate a weighted average value of new and renewal assumptions by multiplying the:

(i) New assumption by (1 - Renewal Probability);

(ii) Renewal assumption by the Renewal Probability;

and then adding (i) and (ii) together

For example, if the new tenant improvement assumption is $20.00/sf, the the renewal tenant improvement assumption is $5.00/sf, and the Renewal Probability is 75%, the weighted average tenant improvement assumption would be calculated as: ($20.00 x .25) + ($5.00 x .75) = $8.75/sf.

Basic Renewal Probability

Basic Renewal Probability allows for the entry of a single value between 0 and 100 representing the percentage probability that a tenant will renew upon expiration (75% is entered as "75," not ".75"). The Basic state with 75 percent renewal probability is the default unless another value is assigned in the Property section on the Defaults tab.

Market Lease - Basic Renewal Probability

Named Item Renewal Probability

Named Item Renewal Probability is a drop-down menu of named item expedites created and defined in the Property Market section on the Renewal Probability tab. Named Item Renewal Probability must be used when the renewal probability percentage will change throughout the analysis term.

Market Lease - Named Item Renewal Probability

Rent

Rent is used to define the base rent assumption for the Market Lease and may be entered in one of three carousel states: Basic, Named Item or Advanced.

Basic Rent

Basic Rent is the default and is used to enter a single amount of rent (new and renewal) with named Inflation and optional named Increases.

Press Enter to activate carousel.

New and Renewal are the market rent amount values as of the Analysis Begin date for new deals and renewal deals (weighted by the Renewal Probability percentage when the Renewal Type on the Rent Roll is set to "Weighted") that are interpreted by the assigned Amt Type.

Note: Entries are required in both the New and Renewal fields even if the amounts are the same. If no entry is made in the Renewal field, the amount will be interpreted as $0.

Amt Type interprets the New and Renewal values. Options include:

• /Mo is the monthly amount.
• /Yr is the annual amount.
• /Area/Mo is the monthly amount per Area.
• /Area/Yr is the annual amount per Area. /Area/Yr is the default unless another Amt Type is assigned in the Property section on the Defaults tab.

Hint: /Mo and /Yr will rarely, if ever, be used for Market Lease rent. The typical use case for these Amt Types would be for rent roll records related to signage income or telecom income.

Inflation is a drop-down menu of named items created and defined in the Property Market section on the Inflation tab. *MarketRent is the default unless another is assigned in the Property section on the Defaults tab. The assigned named Inflation determines how the New and Renewal rent amounts will grow during the analysis term in order to set the initial rent amount when a Market Lease commences.

Increase determines how the rent will increase within the lease term once a Market Lease commences.  Increase named items are created and defined in the Tenant Market section on the Increase tab. The default is null (no increase) unless another is assigned in the Property section on the Defaults tab.

Market Lease - Basic Rent

Named Item Rent

Named Item Rent allows for the use of Rent and Increase named item expedites.

Rent is a drop-down menu of named items created and defined in the Tenant Market section on the Rent tab.

Increase determines how the rent will increase within the lease term once a Market Lease commences.  Increase named items are created and defined in the Tenant Market section on the Increase tab. The default is "*None" (no increase) unless another is assigned in the Property section on the Defaults tab.

Market Lease - Named Item Rent

Advanced Rent (% of Last Rent)

Advanced Rent is similar to Basic Rent but will allow for renewal rent to be entered using the following additional methods (i) as a percentage of the final base rent paid during the previous lease term; or (ii) as a percentage of the new rent.

New Amt is the market rent amount value as of the Analysis Begin date for new deals that are interpreted by the assigned New Amt Type.

New Amt Type interprets the New Amt rent value. Options include:

• /Mo is the monthly amount.
• /Yr is the annual amount.
• /Area/Mo is the monthly amount per Area.
• /Area/Yr is the annual amount per Area. /Area/Yr is the default unless another Amt Type is assigned in the Property section on the Defaults tab.

Hint: /Mo and /Yr will rarely, if ever, be used for Market Lease rent.

Renewal Amt is the market rent amount value as of the Analysis Begin date for renewal deals that are interpreted by the assigned Renewal Amt Type.

Renewal Amt Type interprets the Renewal Amt rent value. Options are the same as the "New Amt Type" with the following additions:

• % of Last Rent sets the renewal rent to a percentage of final base rent paid during the previous lease term using (i) a percentage as entered in the Renewal Amt field (103% should be entered as "103" rather than "1.03") and (ii) the final rent amount per square foot for the previous lease term associated with the lease record.
• % of New Rent sets the renewal rent to a percentage of the New Amt rent using (i) a percentage as entered in the Renewal Amt field (90% should be entered as "90" rather than ".90") and (ii) the amount as entered in the New Amt field.

Inflation is a drop-down menu of named items created and defined in the Property Market section on the Inflation tab. *MarketRent is the default unless another is assigned in the Property section on the Defaults tab. The assigned named Inflation determines how the New and Renewal rent amounts will grow during the analysis term in order to set the initial rent amount when a Market Lease commences. However, if the Renewal Amt Type is set to "% of Last Rent", then Inflation does not apply as renewal market rent for market leases is based upon a percentage of the rent for the previous lease.

Increase determines how the rent will increase within the lease term once a Market Lease commences.  Increase named items are created and defined in the Tenant Market section on the Increase tab. The default is "*None" (no increase) unless another is assigned in the Property section on the Defaults tab.

Example ("% of Last Rent" Renewal Amt Type): For a market lease in a retail center, it is assumed that market rent for new leases is $50.00/sf as of the Analysis Begin Date with 3% inflation, and for renewal leases is 103% of the last rent paid. The market rent will have 3% annual increases. To accomplish this, perform the following steps:

1. In the Market Lease section, navigate to the "Advanced" state in the Rent field.
2. Enter "50" in the New Amt field and "/Area/Yr" in the New Amt Type field.
3. Enter "103" in the Renewal Amt field and "% of Last Rent" in the Renewal Amt Type field
4. Select "*MarketRent" from the drop-down in the Inflation field (assuming that this Inflation as been set to 3%/annum)
5. Select "3%LeaseYr" from the drop-down in the Increase field (assuming that this increase has already been set up in the Tenant Market section; if not, set-up the appropriate increase prior to performing this step).

Market Lease - Advanced Rent (% of Last Rent)

Example ("% of New Rent" Renewal Amt Type): For a market lease in an office building, it is assumed that market rent for new leases is $20.00/sf as of the Analysis Begin Date with 3% inflation, and for renewal leases is 95% of the new lease market rent. The market rent will have 3% annual increases. To accomplish this, perform the following steps:

1. In the Market Lease section, navigate to the "Advanced" state in the Rent field.
2. Enter "20" in the New Amt field and "/Area/Yr" in the New Amt Type field.
3. Enter "95" in the Renewal Amt field and "% of New Rent" in the Renewal Amt Type field
4. Select "*MarketRent" from the drop-down in the Inflation field (assuming that this Inflation as been set to 3%/annum)
5. Select "3%LeaseYr" from the drop-down in the Increase field (assuming that this increase has already been set up in the Tenant Market section; if not, set-up the appropriate increase prior to performing this step).

Market Lease - Advanced Rent (% of New Rent)

Free Rent

Free Rent is tenant revenue (i.e., base rent, recoveries and/or other) from the Market Lease that is forgiven for a period of time, and may be entered in one of two carousel states: Basic and Named Item.

Basic Free Rent

Basic Free Rent is the default (press Enter to activate carousel) and allows for abatement periods in terms of months (new and renewal) from the start of the lease (Mos) or from the start of each lease year (Mos/Yr).

New and Renewal are the number of months of free rent for new deals and renewal deals (weighted by the Renewal Probability percentage) that are interpreted by the assigned Amt Type. Fractional months are allowed.

Note: Entries are required in both the New and Renewal fields even if the number of months are the same. If no entry is made in the Renewal field, the number of months will be interpreted as 0.

Amount Type interprets the New and Renewal values. Options include:

• Mos is the number of months the abatement will take place, taken from the start date of the Market Lease. Mos is the default unless another is assigned in the Property section on the Defaults tab.
• Mos/Yr is the number of months the abatement will take place, taken from the start of each lease year commencing with the start date of the market lease. Mid-month starts or partial free months will calculate correctly.

Revenue reflects the component(s) of revenue for the market lease that will be abated. Choices are:

• Rent -  Base Rent only. Rent is the default unless another is assigned in the Property section on the Defaults tab.
• Rent + Recovery - Base Rent and Expense Recoveries
• All Revenues - Base Rent, Expense Recoveries and Percentage Rent
• Recovery - Recoveries only

Market Lease - Basic Free Rent

Named Item Free Rent

Named Item Free Rent is a drop-down menu of named item expedites created and defined in the Tenant Market section on the Free Rent tab. Named Item Free Rent must be used when the number of months of free rent will change throughout the analysis term.

Market Lease - Named Item Free Rent

Recovery

Recoveries are the methodology by which the Market Lease shares the property’s operating expenses with the landlord.

Note: Users may enter as many recovery records as required by the Market Lease (the number of recovery records entered for a Market Lease record is displayed when the recovery field is not active as the "Recovery Count"). Additionally, if common recovery mechanics exist that are shared by many contractual and/or Market Leases, both Named Recoveries and Recovery Groups may be used to expedite data input.

Tip: Understanding how often certain recoveries are used prior to commencement of recovery modeling is beneficial to expedite the recovery modeling process. To read more about recoveries, see the Recoveries section and/or the How to Set Up Retail Recoveries with Major Contributions article.

To add the first recovery record to a Market Lease, press the "Enter" key to activate the recovery carousel and then navigate to the appropriate tab based upon the recovery type being entered; there is a separate tab for each of the six available recovery types as described below:

• Named Recoveries allows for the selection of one or more previously created named recovery expedites. Named Recoveries are typically used when multiple rent roll or market lease records share the same recovery structure. Selections are either system defined (*Base Year or *NNN) or manually created and defined on the Named Recoveries tab, accessible from either the Rent Roll or Recoveries sections.
• Recovery Groups allow for the selection of one or more previously created Recovery Groups representing multiple Named Recoveries. Selections are manually created and defined on the Recovery Groups tab, accessible from either the Rent Roll or Recoveries sections.
  • Note: Named Recovery and Recovery Group types are property based and may be re-used. The remaining four types presented below are Market Lease based and are only applicable to the Market Lease record for which they were created.
• Pro Rata is used when the tenant pays a pro-rata share of specified operating expenses on either a net basis or over a defined stop.
• Amt is used when the tenant pays a fixed amount that is either flat for the entire lease term or subject to annual, consistent (% or amount/area) increases.
• Detailed Amt allows for exact dates and a hard-coded amounts.
• Tenant Mgmt Fee is used when the tenant pays a % of their Rent, Rent + Recoveries or All Revenues as a replacement of pro rata share of property level management fee (typically seen in industrial buildings).

The number of records for each of the six available recovery types will display in parenthesis to the right of the recovery type name.

Named Recoveries

Named Recoveries allow for the selection of one or more previously created named recovery expedites. Selections are either system defined (*Base Year or *NNN) or manually created and defined on the Named Recoveries tab, accessible from either the Rent Roll or Recoveries sections.

• Check the boxes to include the Named Recoveries applicable to the tenant record.
• Uncheck the boxes to exclude specific Named Recoveries. 
• Select all Named Recoveries by checking the box to the left of the Search field.
• Deselect all Named Recoveries by unchecking the box to the left of the Search field.
• To view all Named Recoveries available for selection, uncheck the "Show Selected" box.
• To view only selected Named Recoveries, check the "Show Selected" box.
• To sort the list alphabetically in ascending order, click the double arrows (the double arrow icon will change to a single arrow pointing downward); to re-sort the list alphabetically in descending order, click the single arrow pointing downward (the single arrow pointing downward icon will change to a single arrow pointing upward).

Market Lease - Named Recoveries

Recovery Groups

Recovery Groups allow for the selection of one or more previously created Recovery Groups representing multiple Named Recoveries. Selections are manually created and defined on the Recovery Groups tab, accessible from either the Rent Roll or Recoveries sections.

• Check the boxes to include the Recovery Groups applicable to the tenant record.
• Uncheck the boxes to exclude specific Recovery Groups. 
• Select all Recovery Groups by checking the box to the left of the Search field.
• Deselect all Recovery Groups by unchecking the box to the left of the Search field.
• To view all Recovery Groups available for selection, uncheck the "Show Selected" box.
• To view only selected Recovery Groups, check the "Show Selected" box.
• To sort the list alphabetically in ascending order, click the double arrows (the double arrow icon will change to a single arrow pointing downward); to re-sort the list alphabetically in descending order, click the single arrow pointing downward (the single arrow pointing downward icon will change to a single arrow pointing upward).

Market Lease - Recovery Groups

Pro Rata

Pro rata Recovery is used when the market lease tenant pays a pro-rata share of specified operating expenses on either a net basis or over a defined stop.

Recovery Pool is a drop-down menu of named items created and defined in the Recoveries section on the Recovery Pools tab. The Recovery Pool provides the definition of Operating Expenses subject to recovery.

Pro Rata Type defines the method by which tenant's pro-rata share will be determined. Options include:

• Natural uses the tenant's natural area, i.e., 100% of tenant Area divided by a user-defined Denominator (Area Measure). "Natural" is the default setting.
• Specified % allows the user to hard-code a percentage in the Pro rata % field (NOTE: Specified % pro-rata types are rarely, if ever, used for market lease Pro Rata recoveries).

Pro rata % is the hard-coded pro-rata share percentage that is only available if Pro Rata Type is set to "Specified %."

Denominator is a drop-down menu of Area Measures that is only available if Pro Rata Type is set to "Natural". Area Measures are created and defined on the Area Measures tab, accessible from both the Property and Recoveries sections.

Stop Type defines how the expense stop, i.e., the amount that must be exceeded by the Recovery Pool before the tenant pays recoveries, is entered and how the entry in the Stop field, if required, is interpreted.

• None: the expense stop is $0 and the recovery will act as "net" (no data entry required in the Stop field).
• Amt: the expense stop will equal the $ amount entered in the Stop field (NOTE: "Amt" Stop Type is rarely, if ever, used for market lease Pro Rata recoveries).
• Amt/Area: the expense stop will equal the $ amount/area entered in the Stop field. If the Pro rata Type is set to (i) Natural, the Amt/Area will be multiplied by the Denominator to determine the stop; (ii) Specified %, the Amt/Area will be divided by the Pro rata % and then multiplied by the leased Area to determine the stop (NOTE: "Amt/Area" Stop Type is rarely, if ever, used for market lease Pro Rata recoveries).
• Occupancy Yr: the expense stop will equal the calculated amount of the Recovery Pool for the year of market lease commencement (no data entry is required in the Stop field).
  • Note: The occupancy year will be determined based upon the Recovery Effective Month setting in the Property section Property Settings tab.
    • Example: Analysis Begin date is 1/1/2024, Recovery Effective Month is July and market lease commencement date is 9/1/2024 with an Occupancy Year stop: The stop will equal the calculated amount of the Recovery Pool for the period 7/1/2024 - 6/30/2025.
• Occupancy Yr+1: same as "Occupancy Yr" except the expense stop will equal the calculated amount of the Recovery Pool for the year of market lease commencement plus 1 year (no data entry is required in the Stop field).
• Occupancy Yr-1: same as "Occupancy Yr" except the expense stop will equal the calculated amount of the Recovery Pool for year of market lease commencement minus 1 year (no data entry is required in the Stop field).
• Specified Yr: the expense stop will equal the calculated amount of the Recovery Pool for the year entered in the Stop field (NOTE: "Specified Yr" Stop Type is rarely, if ever, used for market lease Pro Rata recoveries).
  • Note: If the year entered in the Stop field is prior to the Analysis Begin year, the stop amount will be set to $0 and the recovery will be treated as "net."
  • Note: If the Recovery Effective Month settings on the Property Settings tab in the Property section is set to a fiscal recovery (i.e., anything other than a January Recovery Effective Month), the Specified Yr entered in the Stop field will be interpreted as the fiscal year end.
    • Example: Analysis Begin date is 1/1/2024, Recovery Effective Month is July and market lease commencement date is 7/1/2025 with a 2025 stop year: The stop will equal the calculated amount of the Recovery Pool for the expired period 7/1/2024 - 6/30/2025.
• Est. Base Yr: Should not be used for market leases as the market lease commencement date is prior to the Analysis Begin Date ("Est. Base Yr" is used when a lease record Begin Date is prior to the Analysis Begin Date and the recovery pool amount is unknown and needs to be estimated. The Recovery Pool amount is estimated by taking the pool amount in the first year of the analysis and deflating it back to the year of the lease record Begin Date. The percentage used to deflate the pool amount is entered in the Stop field.)

Stop is the amount of the stop (if the Stop Type is set to Amt or Amt/Area) or the year (if the Stop Type is set to Specified Yr). The excess of the Recovery Pool over the Stop amount will be subject to pro rata calculations.

Report Tag (optional) is a drop-down menu of named item expedites created in the Recoveries section on the Report Tags tab. Report Tags are used for classification of the recovery for reporting purposes (recoveries with the same Report Tag can be consolidated on one line item for cash flow reporting purposes) or retail tenant contributions (recoveries with the same Report Tag for tenants belonging to the same Tenant Group can be consolidated and used as a Major Contribution reduction to Recovery Pools).

If a Report Tag has been referenced within the recovery record, the tag may be cleared by clicking on the black "X" that appears within the Report Tag field:

Cap is the maximum amount of recovery.

Note: Caps rarely, if ever, apply to market lease Pro Rata recoveries as caps are typically associated with contractual, in-place leases.

To enter a cap, click the Create button:

A dot appears on the button and the name changes to "Edit" if a cap has been entered:

When the Create button has been clicked, the following fields appear in a pop-up screen:

A. Cap options include "Pool" or "Recovery", of which one may be selected:

• Pool is used to cap the dollar amount of the Recovery Pool (i.e., a building level cap, prior to the calculation of the tenant’s share).
• Recovery is used to cap the calculated amount of the recovery paid by the tenant (i.e., a tenant level cap).

B. When the Cap field is set to "Pool," the Cap Type, Amt, and % Increase fields are used in accordance with the following table:

Cap Type	Amt	% Increase
Percent	Enter the % by which increases in capped expenses in the calculated Recovery Pool are capped.	N/A
/Area/Yr	Enter the annual amount per area of the capped expenses in the Recovery pool. If Pro rata Type is set to (i) Natural, the Amt will be multiplied by the Denominator to determine the cap; (ii) Specified %, the Amt will be divided by the Pro rata % and then multiplied by the leased Area to determine the cap. The Amt entered is always the cap for the year commencing with the Analysis Begin date.	Enter the % by which the cap will increase on an annual basis.
/Yr	Enter the annual amount of the capped expenses in the Recovery Pool. The Amt entered is always the cap for the year commencing with the Analysis Begin date.	Enter the % by which the cap will increase on an annual basis.
Prior Yr	Enter the annual amount of the capped expenses in the Recovery Pool for the year prior to the year commencing with the Analysis Begin date (this is used primarily when source documents are provided for contractual tenants whereby the cap for the prior year has been established).	Enter the % by which the cap will increase on an annual basis.
Detailed /Yr & Detailed Area/Yr (see below)	N/A	N/A

Detailed/Yr - Used to enter the annual amount of capped expenses in the Recovery Pool when dates and/or amounts of increases in the cap are irregular. Dates may be entered as:

• Absolute - Caps will always be based off of the dates entered.
• Relative - Dates entered are always relative to the Analysis Begin date.

Detailed Area/Yr - Used to enter the annual amount per area of capped expenses in the Recovery Pool when dates and/or amounts of increases in the cap are irregular. Dates may be entered as Absolute or Relative and behave in the same manner as described above for "Detailed/Yr." Regarding the amount per area, if the Pro Rata Type is set to (i) Natural, the Amt will be multiplied by the Denominator to determine the cap; (ii) Specified %, the Amt will be divided by the Pro Rata % and then multiplied by the leased Area to determine the cap.

C. When the Cap On field is set to "Recovery," the Cap Type, Amt, and % Increase fields are used in accordance with the following table:

Cap Type	Amt	% Increase
Percent	Enter the % by which tenant's calculated recoveries for the prior year are capped.	N/A
/Area/Yr	Enter the annual amount per area by which tenant's calculated recoveries are capped. The Amt entered will be multiplied by the leased Area to determine the cap. The Amt entered is always the cap for then year commencing with the Analysis Begin date.	Enter the % by which the cap will increase on an annual basis.
/Yr	Enter the annual amount by which tenant's calculated recoveries are capped. The Amt entered is always the cap for the year commencing with the Analysis Begin date.	Enter the % by which the cap will increase on an annual basis.
Prior Yr	Enter the annual amount by which tenant's recoveries for the year prior to the year commencing with the Analysis Begin date are capped (this is used primarily when source documents are provided for contractual tenants whereby the cap on the amount paid by tenant for the prior year has been established).	Enter the % by which the cap will increase on an annual basis.
Detailed /Yr & Detailed Area/Yr (see below)	N/A	N/A

Detailed /Yr - Used to enter the annual amount by which tenant's calculated recoveries are capped when dates and/or amounts of increases in the cap are irregular. Dates may be entered as:

• Absolute - Caps will always be based off of the dates entered.
• Relative - Dates entered are always relative to the Analysis Begin date.

Detailed Area/Yr - Used to enter the annual amount per area by which tenant's calculated recoveries are capped when dates and/or amounts of increases in the cap are irregular. The Amt(s) entered will be multiplied by the leased Area to determine the cap. Dates may be entered as Absolute or Relative and behave in the same manner as described above for "Detailed /Yr."

Notes Regarding Caps with a Cap on "Recovery"

• Cap On "Recovery" with a Cap Type of "Percent" is typically not used for leases with base year expense stops. In the most extreme example, if a tenant does not pay recoveries in the first lease year due to the stop, the cap amount will always be $0 and tenant will never pay recoveries (the Percent increase is being applied to an initial recovery amount of $0). Rather, a cap on the "Pool" should always be used with a Cap Type of "Percent" for leases with base year expense stops.
• When the cap is on "Recovery" rather than "Pool," the expenses subject to cap in the Recovery Pool definition (as identified by a check in the "Cap?" check box on the Recovery Pools screen) are ignored. Rather, the cap is applied to the entire amount of tenant's calculated recovery payment.

If a cap was previously entered and needs to be removed, click the red "Clear" button in the upper right hand corner of the Cap screen:

adds a Pro Rata recovery record beneath the current record, deletes the current Pro Rata recovery record.

Market Lease Pro Rata Recovery

Amt

Amt is used when the market lease tenant pays a fixed amount that is either flat for the entire lease term or subject to annual, consistent (% or amount/area) increases.

Name is used to provide a descriptive name for the Amt recovery (e.g., "Fixed CAM 3%").

Amt is the amount of recovery as of the Analysis Begin date as set in the Property section on the Property Settings tab (this is different than entering an Amt recovery on the Rent Roll, whereby the amount of recovery is as of the later of the lease record Begin Date or the Analysis Begin date).

Amount Type interprets the Amt value. Options include:

• /Mo is the monthly Amt.
• /Yr is the annual Amt.
• /Area/Mo is the monthly Amt per area.
• /Area/Yr is the annual Amt per area.

Hint: /Mo and /Yr will rarely, if ever, be used for Market Lease Amt recoveries.

Inflation is a drop-down menu of named items created and defined in the Property Market section on the Inflation tab. The assigned named Inflation determines how the Amt recovery will grow during the analysis term in order to set the initial recovery amount when a Market Lease commences.

Increase is a drop-down menu of named item expedites created and defined in the Tenant Market section on the Increase tab. Upon initial entry, null is the default (no increase). If an Increase has been selected and you want to change the data entry so there is no increase, select "*None" from the drop-down menu. Select an Increase named item from the drop-down menu to determine how the recovery Amt will increase within the lease term once a Market Lease commences.

Report Tag (optional) is a drop-down menu of named item expedites created in the Recoveries section on the Report Tags tab. Report Tags are used for classification of the recovery for reporting purposes (recoveries with the same Report Tag can be consolidated on one line item for cash flow reporting purposes) or retail tenant contributions (recoveries with the same Report Tag for tenants belonging to the same Tenant Group can be consolidated and used as a Major Contribution reduction to Recovery Pools).

If a Report Tag has been referenced within the recovery record, the tag may be cleared by clicking on the black "X" that appears within the Report Tag field:

adds an Amt recovery record beneath the current record, deletes the current Amt recovery record.

Market Lease - Amt Recovery

Detailed Amt

Detailed Amt is used when the market lease tenant pays fixed amounts that change on irregular; i.e., non-annual, dates and/or by inconsistent amounts.

Name is used to provide a descriptive name for the Detailed Amt recovery (e.g., "Inline Mkt. Lease CAM").

Amount Type interprets the Amt value entries. Options include:

• /Mo is the monthly Amt
• /Yr is annual Amt
• /Area/Mo is the monthly Amt per area
• /Area/Yr is the annual Amt per area

Report Tag (optional) is a drop-down menu of named item expedites created in the Recoveries section on the Report Tags tab. Report Tags are used for classification of the recovery for reporting purposes (recoveries with the same Report Tag can be consolidated on one line item for cash flow reporting purposes) or retail tenant contributions (recoveries with the same Report Tag for tenants belonging to the same Tenant Group can be consolidated and used as a Major Contribution reduction to Recovery Pools).

If a Report Tag has been referenced within the recovery record, the tag may be cleared by clicking on the black "X" that appears within the Report Tag field:

adds another Detailed Amt record beneath the current record, deletes the current Detailed Amt record.

Date the fixed recovery amount changes. Enter absolute (A - MM/DD/YYYY) or relative (R -#) dates.

• Absolute (MM/DD/YYYY) - When absolute dates are used, all recovery amounts are based off of absolute dates regardless of the Market Lease commencement date. The amount entered for the last absolute date will remain the same for the balance of the analysis term.
• Relative (#) - Relative dates are relative to the Market Lease commencement date (i.e., the first month for each Market Lease associated with a lease record).

Amt is the amount as interpreted by the entry in the Amt Type field.

adds another Date/Amount row for the active Detailed Amt record, deletes the Date/Amount row for the active Detailed Amt record.

Click the red "Clear" button in the upper right hand corner of the screen to delete all Date/Amount entries.

Market Lease - Detailed Amt Recovery

Tenant Mgmt Fee

Tenant Mgmt Fee is used when tenant pays a % of their Rent, Rent + Recoveries or All Revenues as a replacement of pro-rata share of property level management fee (typically seen in industrial buildings).

Percent is the percentage value that will be multiplied by the Market Lease revenue as determined by the Revenue Type selection.

Amt Type reflects the component(s) of tenant revenue used to calculate the tenant management fee. Choices are:

• Rent - Base Rent only
• Rent + Recovery - Base Rent and Expense Recoveries
• All Revenues - Base Rent, Expense Recoveries and Percentage Rent

Report Tag (optional) is a drop-down menu of named item expedites created in the Recoveries section on the Report Tags tab. Report Tags are used for classification of the recovery for reporting purposes (recoveries with the same Report Tag can be consolidated on one line item for cash flow reporting purposes) or retail tenant contributions (recoveries with the same Report Tag for tenants belonging to the same Tenant Group can be consolidated and used as a Major Contribution reduction to Recovery Pools).

If a Report Tag has been referenced within the recovery record, the tag may be cleared by clicking on the black "X" that appears within the Report Tag field:

adds a Tenant Mgmt Fee recovery record beneath the current record, deletes the current Tenant Mgmt Fee recovery record.

Market Lease - Tenant Mgmt Fee Recovery

T.I., L.C., & Other Capital

These capital types are used to input costs incurred by the landlord associated with the leasing of space by market lease tenants.

Note: Each capital type column, TI, LC, and Other Capital, operates in the same manner and has the same input selection options.

Basic TI, LC & Other Capital

Basic TI, LC & Other Capital is the default.

New and Renewal are the capital amount, amount/area or percentage values as of the Analysis Begin date for new and renewal deals (weighted by the Renewal Probability percentage) that are interpreted by the assigned Amt Type. Percentages are interpreted as whole numbers (e.g., for 3%, enter "3" not ".03").

Note: Entries are required in both the New and Renewal fields even if the values are the same. If no entry is made in the Renewal field, the value will be interpreted as 0.

Amt Type interprets the New and Renewal values. Options include:

• Amt is the weighted average of the New and Renewal values expressed as an annual amount (NOTE: Amt is rarely, if ever, used for market leases).
• Amt/Area is the weighted average of the New and Renewal values expressed as an annual amount per area.
• % of Rent is the weighted average of the percentages entered in the New and Renewal fields multiplied by the entire amount of Base Rent paid by tenant during the Market Lease term, net of Free Rent (i.e., Rent + Rent Increases - Free Rent).
• % of Rent + Recovery is the weighted average of the percentages entered in the New and Renewal fields multiplied by the entire amount of Base Rent plus Recoveries paid by tenant during the Market Lease term, net of Free Rent (i.e., Rent + Rent Increases - Free Rent + Recoveries - Free Recoveries).
• % of Rent: Ignore Free is the weighted average of the percentages entered in the New and Renewal fields multiplied by the entire amount of Base Rent paid by tenant during the Market Lease term, with no reduction for Free Rent (i.e., Rent + Rent Increases).
• % of Rent + Recovery: Ignore Free is the weighted average of the percentages entered in the New and Renewal fields multiplied by the entire amount of Base Rent plus Recoveries paid by tenant during the Market Lease term, with no reduction for Free Rent or Free Recoveries (i.e., Rent + Rent Increases + Recoveries).
• % of All Revenues is the weighted average of the percentages entered in the New and Renewal fields multiplied by the entire amount of Base Rent plus Recoveries plus Percentage Rent paid by tenant during the Market Lease term, net of all Free Rent (i.e., Rent + Rent Increases - Free Rent + Recoveries - Free Recoveries + Percentage Rent - Free Percentage Rent).

Inflation is a drop-down menu of named items created and defined in the Property Market section on the Inflation tab. The default is "*TenantCapital" for TI and Other Capital and null for LC. The assigned named Inflation determines how the New and Renewal capital values will grow during the analysis term in order to determine the capital amount when a Market Lease commences.

Note: Inflation is only available for the Amt Types "Amt" and "Amt/Area".

Payout is a drop-down menu of named items created and defined in the Tenant Market section on the Payout tab. Payout determines when the Market Lease capital amount is paid in relation to the Market Lease commencement date. The default is *CashedOut, indicating the amounts will be paid out upon commencement of the Market Lease.

Note: Amt Type of "Amt/Area" for TI and Other Capital and "% of Rent" for LC and Payout of "Cashed Out" are the defaults unless another Amt Type or Payout is assigned in the Property section on the Defaults tab.

Market Lease - Basic Tenant Improvement

Market Lease Basic Leasing Commission

Named Item Capital

Named Item Capital allows for the selection of a named item expedite created and defined in the Tenant Market section on the corresponding TI, LC, or Other Capital tab.

Tip: If "within lease term" commissions are required for the Market Lease (e.g., 10% year 1, 2% thereafter), these must be setup as a LC named item within the Tenant Market section with Input type set to Within Lease.

Market Lease - Named Item Tenant Improvement

Sales

Reflects the current amount of sales achieved by the market lease tenant and projections of future sales growth.

Inherit

Inherit is the default and obtains sales details from the contractual parent record on the Rent Roll. The sales amount and inflation for the contractual parent record will continue throughout the Market Leases.

Market Lease - Inherit Sales

Basic Sales

Basic Sales is used to enter a single amount of current sales with optional named Inflation.

Amt is the amount of sales as of the the Analysis Begin date as interpreted by the assigned Amount Type.

Amount Type interprets the Amt value. Options include:

• /Area/Mo is the monthly Amt per area.
• /Area/Yr is the annual Amt per area. "/Area/Yr" is the default unless another is assigned in the Property section on the Defaults tab.

Inflation is a drop-down menu of named item expedites created and defined in the Tenant Market section on the Inflation tab. "*Sales" is the default unless another is assigned in the Property section on the Defaults tab.

Market Lease - Basic Sales

Breakpoint

The Breakpoint reflects the amount that sales must exceed before overage rent is due from the market lease tenant.

For Market Leases, the only breakpoint allowed is a Natural breakpoint. A Natural breakpoint is auto-calculated as Base Rent divided by the Overage percentage.

Overage

Overage reflects the percentage of sales in excess of the breakpoint that is paid by the market lease tenant.

Inherit is the default and obtains overage details from the parent record on the Rent Roll.

Market Lease - Inherit Overage

Basic Overage is used to enter a single percentage that will be applied throughout the Market Lease term.

Market Lease - Basic Sales

Subsequent Market

Subsequent Market is used in instances where a different market lease assumption is required after expiration of the initial market lease.

The drop-down list populates with the code name of all market leases for a property with the exception of the current market lease for which data is being entered. If there are no additional market leases for the property, no selections are available. The default is null (i.e., no Subsequent Market). If different market lease assumptions are required after expiration of the initial market lease, select the code for the market lease containing the desired different assumptions.

Example: An office building has two market leases - "Office Lease 1" and "Office Lease 2". For a specific contractual tenant, the user would like the market lease assumptions for "Office Lease 1" to apply to the initial speculative renewal and the assumptions for "Office Lease 2" to apply to all subsequent speculative renewals. To accomplish this, perform the following steps:

1. Create a copy of the market lease "Office Lease 1". For the copied market lease, re-enter the code as "OfLse1_then_OfLse2".
2. For the market lease record "OfLse1_then_OfLse2", select "Office Lease 2" from the drop-down in the Subsequent Market column (NOTE: The assumptions for "Office Lease 1" will apply to the first speculative renewal as that record was copied to create the new market lease).
3. On the Rent Roll for the specific contractual tenant, select "OfLse1_then_OfLse2" from the drop-down in the "Market Lease" column.

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Renewal Probability

Ctrl + Alt displays the numeric keyboard shortcut.

The Renewal Probability tab is used to create named item renewal probability rates reflecting the probability that a tenant renews upon expiration of the term.

When a Renewal Type of "Weighted" is selected on the Rent Roll, the Renewal Probability is used to calculate a weighted average value of new and renewal assumptions by multiplying the:

(i) New assumption by (1 - Renewal Probability);

(ii) Renewal assumption by the Renewal Probability;

and then adding (i) and (ii) together

For example, if the new tenant improvement assumption is $20.00/sf, the the renewal tenant improvement assumption is $5.00/sf, and the Renewal Probability is 75%, the weighted average tenant improvement assumption would be calculated as:

($20.00 x .25) + ($5.00 x .75) = $8.75/sf.

Renewal Probability named items may be referenced in the following area of the application:

• Rent Roll & Property Market sections > Market Lease tab > Renewal Probability column > Named item state

The benefit of using a named item Renewal Probability is that if the named item is changed, the change will flow through to all areas where the named item is referenced.

Info: Read about #, Code and Name throughout the Application

Renewal Probability Input Types

Basic Renewal Probability

Basic Renewal Probability allows for the entry of a single value between 0 and 100 that does not change over the analysis period, representing the probability that tenant will renew upon expiration (75% is entered as "75," not ".75").

Basic Renewal Probability

Detailed Renewal Probability

Detailed Renewal Probability allows for changing percentages (between 0 and 100) on a yearly basis.

Year is based from the Analysis Begin date. It is auto-incremented by 1 year as new rows are added and is read-only.

Renewal Probability is a percentage value representing the probability that a tenant will renew upon expiration (75% is entered as "75," not ".75").

 adds a row beneath the current row,  deletes the current row.

Detailed Renewal Probability

Note: The percentage value entered for the last year will continue for the remainder of the analysis term.

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Downtime

Ctrl + Alt displays the numeric keyboard shortcut.

The Downtime tab is used to create named item downtimes that reflect the amount of time (in months) necessary to replace a lease upon expiration when the tenant vacates (i.e., the projected period of vacancy for any Market Lease).

Downtime named items may be referenced in the following areas of the application:

• Rent Roll and Property Market sections > Market Lease tab > Downtime column > Named Item state

The benefit of using a named item Downtime is that if the named item is changed, the change will flow through to all areas where the named item is referenced.

Info: Read about #, Code and Name throughout the Application

Downtime Input Types

Basic Downtime

Basic Downtime allows for the entry of a single value that does not change over the analysis period representing the number of months that a suite will remain vacant upon expiration of the associated lease. 

Basic Downtime

Detailed Downtime

Detailed Downtime allows for changing downtime values on a yearly basis.

Year is based from the Analysis Begin date. It is auto-incremented by 1 year as new rows are added and is read-only.

Downtime is the number of months that a suite will remain vacant upon expiration of the associated lease.

 adds a row beneath the current row,  deletes the current row.

Detailed Downtime

Note: The monthly value entered for the last year will continue for the remainder of the analysis term.

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Vacancy/Credit Loss

Ctrl + Alt displays the numeric keyboard shortcut.

The Vacancy/Credit Loss tab is where (i) the percentage of revenues estimated to be foregone due to unleased space can be entered and factored into calculations and reports (the "Vacancy Loss"). Vacancy Loss is often used to achieve the assumed stabilized occupancy rate for a building (e.g., if the assumed stabilized occupancy rate is 90%, a vacancy loss factor of 10% would be used); & (ii) the percentage of revenues estimated to be uncollected due to a tenant's inability to pay (i.e., bad debts) can be entered (the "Credit Loss").

• A property can only have one Vacancy Loss record and one Credit Loss record
• The Loss Factor Calculation in the Property section on the Property Settings tab will determine whether Vacancy Loss and Credit Loss are calculated on an annual or a monthly basis
• If the Loss Factor Calculation is set to "Annual", the Loss Factor Effective Month located in the Property section on the Property Settings tab will determine the annual period for which the Vacancy Loss and Credit Loss will be calculated (i.e., the calculation is performed using annual results and the monthly amounts are derived by dividing the annual amount by 12)
• The Vacancy & Credit Loss Audit report, available in the Reports section, may be run to see the underlying Vacancy Loss and Credit Loss calculations

By default, Vacancy Loss is the active section on the screen. To switch between Vacancy Loss and Credit Loss, click on the caret (the blue arrow) to the left of the section name .

Account Number is required and has 20 character maximum that does not accept asterisks or commas. Defaults to "VacLoss" for Vacancy Loss and "CreditLoss" for Credit Loss.

Vacancy/Credit Loss Loss Input Types

Vacancy/Credit Loss may be entered in either a Basic or Detailed carousel state.

Basic Vacancy/Credit Loss

Basic Vacancy/Credit Loss allows for the entry of a single value that does not change over the analysis period and applies to all tenants in the building.

Percent is a percentage value between 0 and 100 reflecting the desired vacancy/credit loss rate.

Revenue Type interprets the components of revenue to which the Percent value applies. For more info, refer to "GVAC Calculations" below.

NOTE: For the Credit Loss calculation, it is strongly recommended to use only "Scheduled" revenue types and not "Potential" revenue types as the credit loss should only apply to actual amounts to be received from tenants.

Reduce % by Vacancy only applies to vacancy loss (and not credit loss) and determines whether the calculated vacancy loss amount will be reduced by the Loss from Absorption and Downtime (if the Loss Factor Calculation is set to "Annual", the calculated vacancy loss amount for each year will be reduced by the Loss from Absorption and Downtime for such year. If "Monthly", the calculated vacancy loss amount for each month will be reduced by the Loss from Absorption and Downtime for such month). If the Loss from Absorption and Downtime exceeds the calculated vacancy loss amount, the vacancy loss for that year (or month) will be zero. Checking the box indicates that the calculated vacancy amount will be reduced.

Basic Vacancy Loss

Basic Credit Loss

Detailed Vacancy/Credit Loss

Detailed Vacancy/Credit Loss allows for (i) the entry of a vacancy/credit loss percentage that changes over the analysis term and (ii) the application of a different vacancy/credit loss percentage to one or more grouping(s) of tenants.

Revenue Type interprets components of revenue to which the Default Percentage and Percentage Override values apply. For more info, refer to "GVAC Calculations" below.

NOTE: For the Credit Loss calculation, it is strongly recommended to use only "Scheduled" revenue types and not "Potential" revenue types as the credit loss should only apply to actual amounts to be received from tenants.

Default Percentage

The Default Percentage will be applied to all tenants for which a Percentage Override is not applicable.

Year is based upon the Loss Factor Effective Month date. It is auto-incremented by 1 year as new rows are added and is read-only.

Percent is a percentage value between 0 and 100 reflecting the desired vacancy/credit loss rate for one or more years.

Note: The percentage entered for the last year will continue for the remainder of the analysis term.

 adds a row beneath the current row,  deletes the current row.

Reduce % by Vacancy only applies to vacancy loss (and not credit loss) and determines whether the calculated vacancy loss amount will be reduced by the Loss from Absorption and Downtime (if the Loss Factor Calculation is set to "Annual", the calculated vacancy loss amount for each year will be reduced by the Loss from Absorption and Downtime for such year. If "Monthly", the calculated vacancy loss amount for each month will be reduced by the Loss from Absorption and Downtime for such month). If the Loss from Absorption and Downtime exceeds the calculated vacancy loss amount, the vacancy loss for that year (or month) will be zero. Checking the box indicates that the calculated vacancy amount will be reduced (Note: if Percentage Overrides are used, the Loss from Absorption and Downtime is calculated for each of the different groupings of tenants).

Percentage Overrides

To apply percentage overrides, check the Percentage Overrides box.

Percent is a percentage value between 0 and 100 reflecting the desired vacancy/credit loss rate that will apply to the selected Tenant Group.

Tenant Group defines the tenant(s) for which the vacancy/credit loss override percentage will apply. Tenant Group is a drop-down menu of named items created and defined on the Tenant Groups tab, accessible from both the Rent Roll and Recoveries sections.

Base and Options Only? If checked, the override vacancy/credit loss percentage will apply to the tenant(s) within the Tenant Group during their base lease and option (if any) terms only. The override will not apply during any Market Leases subsequent to the base lease and/or option term. If unchecked, the override vacancy/credit loss percentage will apply to the tenant(s) within the Tenant Group during all lease terms, including Market Leases subsequent to the base lease and/or option term.

 adds a row beneath the current row (used if there will be more than one override),  deletes the current row.

Detailed Vacancy Loss

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Detailed Credit Loss

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GVAC Calculations

The following list provides the calculation mechanics behind the Revenue Type choices available for both Vacancy Loss and Credit Loss. To assist in understanding such mechanics:

1. "✔" means that the Reduce % By Vacancy box has been checked. "Unchecked" means that the Reduce % By Vacancy box has not been checked.

Note: Since the Reduce % By Vacancy box does not apply to Credit Loss calculations, only the "Unchecked" mechanics are applicable for Credit Loss.

2. Potential and scheduled revenue calculations for a lease record:

• Commence on the Analysis Begin date unless an Available Date has been entered on the Rent Roll, in which case the calculations commence on the Available Date.
• End at the expiration of the analysis term, unless a Renewal Type of "None" has been selected on the Rent Roll, in which case the calculations end on the lease record End Date.

3. Potential revenue includes:

• revenue for contractual leases at contractual terms with no reductions for free rent (i.e., revenue prior to free rent [referred to as "no free" in the following Revenue Type list])
• revenue for market leases at market terms with no reductions for free rent
• revenue for periods of vacancy either prior to initial lease up or between leases at market terms with no reductions for free rent.

4. Scheduled revenue includes:

• revenue for contractual leases at contractual terms as reduced by free rent;
• revenue for market leases at market terms as reduced by free rent.

No revenue is assigned to periods of vacancy.

Hint: Because Scheduled revenue does not assign revenue to periods of vacancy, the Reduce % By Vacancy box should not be checked when Scheduled revenue is selected. Stated differently, because Scheduled revenue already excludes revenue for periods of vacancy, further reducing Scheduled revenue by absorption and downtime vacancy is not advised. These scenarios are flagged as "Not recommended" in the following list.

Potential Base Rent (Not recommended for Credit Loss)

✔ = ((Potential Base Rent [no free]) x Vacancy %) - (Loss from Absorption & Downtime from Base Rent)

Unchecked = ((Potential Base Rent [no free]) x Vacancy %)

Scheduled Base Rent

✔ = ((Scheduled Base Rent) x Vacancy %) - (Loss from Absorption & Downtime from Base Rent) - Not recommended

Unchecked = ((Scheduled Base Rent) x Vacancy %)

Potential Base Rent + Recovery (Not recommended for Credit Loss)

✔ = ((Potential Base Rent [no free] + Potential Recoveries [no free]) x Vacancy %) - (Loss from Absorption & Downtime from Base Rent and Recoveries)

Unchecked = ((Potential Base Rent [no free] + Potential Recoveries [no free]) x Vacancy %)

Potential Base Rent + Scheduled Recovery (Not recommended for Credit Loss)

✔ = ((Potential Base Rent [no free] + Scheduled Recoveries) x Vacancy %) - (Loss from Absorption & Downtime from Base Rent)

Unchecked = ((Potential Base Rent [no free] + Scheduled Recoveries) x Vacancy %)

Scheduled Base Rent + Recovery

✔ = ((Scheduled Base Rent + Scheduled Recoveries) x Vacancy %) - (Loss from Absorption & Downtime from Base Rent) - Not recommended

Unchecked = ((Scheduled Base Rent + Scheduled Recoveries) x Vacancy %)

Potential Tenant Revenue (Not recommended for Credit Loss)

✔ = ((Potential Base Rent [no free] + Potential Recoveries [no free] + Potential % Rent [no free] + Potential Tenant Miscellaneous Revenue [no free]) x Vacancy %) - (Loss from Absorption & Downtime from Base Rent, Recoveries, % Rent and Tenant Miscellaneous Revenue)

Unchecked = ((Potential Base Rent [no free] + Potential Recoveries [no free] + Potential % Rent [no free] + Potential Tenant Miscellaneous Revenue [no free]) x Vacancy %)

Potential Tenant Revenue w/Scheduled Recovery (Not recommended for Credit Loss)

✔ = ((Potential Base Rent [no free] + Scheduled Recoveries + Potential % Rent [no free] + Potential Tenant Miscellaneous Revenue [no free]) x Vacancy %) - (Loss from Absorption & Downtime from Base Rent, % Rent and Tenant Miscellaneous Revenue)

Unchecked = ((Potential Base Rent [no free] + Scheduled Recoveries + Potential % Rent [no free] + Potential Tenant Miscellaneous Revenue [no free]) x Vacancy %)

Tenant Revenue

✔ = ((Scheduled Base Rent + Scheduled Recoveries + Scheduled % Rent + Scheduled Tenant Miscellaneous Revenue) x Vacancy %) - (Loss from Absorption & Downtime from Base Rent, % Rent and Tenant Miscellaneous Revenue) - Not recommended

Unchecked = ((Scheduled Base Rent + Scheduled Recoveries + Scheduled % Rent + Scheduled Tenant Miscellaneous Revenue) x Vacancy %)

Potential Property Revenue (Not recommended for Credit Loss)

✔ = ((Potential Base Rent [no free] + Potential Recoveries [no free] + Potential % Rent [no free] + Potential Tenant Miscellaneous Revenue [no free] + Building Miscellaneous Income) x Vacancy %) - (Loss from Absorption & Downtime from Base Rent, Recoveries, % Rent and Tenant Miscellaneous Revenue)

Unchecked = ((Potential Base Rent [no free] + Potential Recoveries [no free] + Potential % Rent [no free] + Potential Tenant Miscellaneous Revenue [no free] + Building Miscellaneous Income) x Vacancy %)

Potential Property Revenue w/Scheduled Recovery (Not recommended for Credit Loss)

✔ = ((Potential Base Rent [no free] + Scheduled Recoveries + Potential % Rent [no free] + Potential Tenant Miscellaneous Revenue [no free] + Building Miscellaneous Income) x Vacancy %) - (Loss from Absorption & Downtime from Base Rent, % Rent and Tenant Miscellaneous Revenue)

Unchecked = ((Potential Base Rent [no free] + Scheduled Recoveries + Potential % Rent [no free] + Potential Tenant Miscellaneous Revenue [no free] + Building Miscellaneous Income) x Vacancy %)

Property Revenue

✔ = ((Scheduled Base Rent + Scheduled Recoveries + Scheduled % Rent + Scheduled Tenant Miscellaneous Revenue + Building Miscellaneous Income) x Vacancy %) - (Loss from Absorption & Downtime from Base Rent, % Rent and Tenant Miscellaneous Revenue) - Not recommended

Unchecked = ((Scheduled Base Rent + Scheduled Recoveries + Scheduled % Rent + Scheduled Tenant Miscellaneous Revenue + Building Miscellaneous Income) x Vacancy %)

Hint: To audit and confirm the GVAC calculation, run the Vacancy & Credit Loss Audit report from the Reports section on the left navigation panel.