This article describes how rDCF varies from industry standard DCF products in regards to the following:
- Navigation
- Dates
- Inflation does not inherit from another input
- New and Renewal values in Market Lease Assumptions
- Potential Revenue Calculation
- Fixed and Variable Expenses
- Gross-ups
- Term Throughout the Application
- Item Continuation & Growth
- Tenant Groups & Options
- General Vacancy Overrides
- Entering Irregular Rent Abatements
Navigation
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Dates
Absolute dates (A) are entered in the following formats: MM/DD/YYYY or MM/DD/YY, with the exception of a few screens that require a MM/YY format. If mid-month dates are entered, calculations will prorate properly based upon the day entered.
Inflation does not inherit from another input
Third party DCF applications utilized hierarchical input for inflation, i.e., if no inflation was entered in an input screen, the app would look to the category level first, i.e., market rent, sales, etc., and then to the general inflation assumption. This is not the case in rDCF, whereby a named Inflation rate must be referenced wherever inflation is applicable.
New and Renewal Values in Market Lease Assumptions
rDCF requires that New and Renewal values be entered in Market Leases and other market named item expedites, e.g. Rent, Free Rent, and Tenant Capital. If a New value is entered and the Renewal field is null, rDCF will assume a renewal value of zero.
Potential Revenue Calculation
rDCF calculates Potential Revenue based upon all tenant sourced revenue, including Potential Recoveries.
Potential Revenue from tenants on the Rent Roll is always calculated from the Analysis Begin date unless an Available Date is entered; in which case the Available Date will determine the start of the potential revenue calculation. Likewise, Potential Revenue from tenants on the Rent Roll is automatically calculated through the end of the analysis period unless a Renewal Type of "None" is selected for a lease record, in which case the lease End Date for the lease record will determine the end of the potential revenue calculation.
If "None" is selected for Renewal Type for a lease record on the Rent Roll and the space is subsequently re-leased, an Available Date should be entered on the subsequent re-lease, otherwise potential revenue will be overstated; i.e., potential revenue will be calculated from the Analysis Begin date for both the original lease and the re-lease of that space. The rent roll summary at the bottom of the screen will typically have an equal square footage value displayed in the Renewal Type - None and Future Available Date subtotals.
Fixed and Variable Expenses
Within rDCF, Expenses with Fixed and Variable components are modeled in two Line Items:
- The variable component is entered as an amount per area using an occupied Area Measure.
- The fixed component is entered as an amount or amount per area using a fixed Area Measure.
Gross-ups
Within rDCF, gross-ups for expense recoveries are modeled on the Recovery Pools tab, located in the Recoveries section. Any Line Item included within the pool may be grossed-up by assigning a Gross-up % to that Line Item. There is no "global" field, meaning that gross-ups must be modeled on a pool-by-pool basis.
Term Throughout the Application
All fields requiring a Term are entered in months, except the Term of the analysis which is entered in years on the Property Settings tab, located in the Property section.
Item Continuation & Growth
Items continue and/or continue to grow with inflation unless you stop them. For example, if you enter an expense line item using a "Detailed" Input Type, the last entry will continue, or continue to grow if an inflation is applied, for the rest of the analysis period unless you stop it.
Detailed Building Capital Line Item stopped in 2025
To stop inflation of a named item (e.g. market rent), create a named Inflation that stops in year x.
Year 3 named rent values will not inflate in year 4 and continue as the amount for the remainder of the analysis period using the inflation method above (named "Yr 3 0% INF").
Tenant Groups & Options
The selection of a base lease within a Tenant Group automatically includes any associated option lease, i.e., an option record is not available for selection within the Tenant Groups.
General Vacancy Overrides
Overrides can be excluded in the weighted or rollover portion of a given lease.
Entering Irregular Rent Abatements
If a rent abatement exists for a partial month or for irregular time periods, the abatement must be entered as Detailed Free Rent with an individual line for each month.
Example 1:
6.28% of base rent is abated for 12 months beginning 1/24
On the Rent Roll tab or named item Free Rent in the Tenant Market section in rDCF, this abatement structure would be entered as follows:
Example 2:
50% of Base Rent is abated in 1/24, 8/24 for 2 months, 1/25 for 3 months and 1/26
On the Rent Roll tab or the named item Free Rent tab in the Tenant Market section in rDCF, this abatement structure would be entered as follows:
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