Argus exam 1 Questions and Correct
Answers
What type of recovery method do retail tenants usually have? - Answer-Net; retail
tenants primarily reimburse net operating expenses.
What type of recovery method do office tenants usually have? - Answer-Can be either
base stop or net expenses depending on lease format and building location.
Assume a retail tenant has a net recovery method and pays $20 PSF in rent for the
space they occupy and they reimburse $7 to the landlord for net operating expenses. If
an office tenant with base stop recovery were to pay equivalent rent and recoveries
what would be the total rent for year 1? - Answer-$27 PSF; Office tenant's rent for year
1 includes both rent and recoveries. In year 2, the office tenant would reimburse any
increase in expenses over the $7 base stop included in their rent.
An office tenant has a $7 PSF expense stop. Current year operating expenses
recoverable are $12 PSF. What will be the $ PSF expense recovery the tenant is
responsible to pay the landlord? - Answer-$5
If utilities operating expense is $100,000 annually and 50% fixed, what is the expense
calculated as if the building is 50% occupied during year 1? - Answer-Fixed: (% Fixed x
OE) = (50% x 100,000)= $50,000
Variable: (% Var x %Occ x OE) = (50% x 50% x 100,000)= 25,000
ANS: $75,000
Which is an example of a common miscellaneous revenue for a commercial property? -
Answer-Antenna, Vending, Parking
A retail tenant pays a 3% percentage rent based on a natural breakpoint. Their lease is
for 1,000 SF at $15 PSF. What is natural breakpoint? - Answer-Natural Breakpoint=
(Total rent / % rent)
(1000*15)= $15,000 Ann Rent/3% =
ANS: $500,000
A retail tenant pays a 3% percentage rent based on a natural breakpoint. Their lease is
for 1,000 SF at $15 PSF. If the tenant's sales are $600,000, what will they have to pay
to the landlord in percentage rent? - Answer-(Sales-Breakpoint)*% Rent
600,000-500,000= 100,000*3%= $3,000 in percentage rent
Which of the following expenses is typically considered a capital expense? - Answer-
Replacement Reserves; usually expressed in $/PSF number that is money set aside for
Answers
What type of recovery method do retail tenants usually have? - Answer-Net; retail
tenants primarily reimburse net operating expenses.
What type of recovery method do office tenants usually have? - Answer-Can be either
base stop or net expenses depending on lease format and building location.
Assume a retail tenant has a net recovery method and pays $20 PSF in rent for the
space they occupy and they reimburse $7 to the landlord for net operating expenses. If
an office tenant with base stop recovery were to pay equivalent rent and recoveries
what would be the total rent for year 1? - Answer-$27 PSF; Office tenant's rent for year
1 includes both rent and recoveries. In year 2, the office tenant would reimburse any
increase in expenses over the $7 base stop included in their rent.
An office tenant has a $7 PSF expense stop. Current year operating expenses
recoverable are $12 PSF. What will be the $ PSF expense recovery the tenant is
responsible to pay the landlord? - Answer-$5
If utilities operating expense is $100,000 annually and 50% fixed, what is the expense
calculated as if the building is 50% occupied during year 1? - Answer-Fixed: (% Fixed x
OE) = (50% x 100,000)= $50,000
Variable: (% Var x %Occ x OE) = (50% x 50% x 100,000)= 25,000
ANS: $75,000
Which is an example of a common miscellaneous revenue for a commercial property? -
Answer-Antenna, Vending, Parking
A retail tenant pays a 3% percentage rent based on a natural breakpoint. Their lease is
for 1,000 SF at $15 PSF. What is natural breakpoint? - Answer-Natural Breakpoint=
(Total rent / % rent)
(1000*15)= $15,000 Ann Rent/3% =
ANS: $500,000
A retail tenant pays a 3% percentage rent based on a natural breakpoint. Their lease is
for 1,000 SF at $15 PSF. If the tenant's sales are $600,000, what will they have to pay
to the landlord in percentage rent? - Answer-(Sales-Breakpoint)*% Rent
600,000-500,000= 100,000*3%= $3,000 in percentage rent
Which of the following expenses is typically considered a capital expense? - Answer-
Replacement Reserves; usually expressed in $/PSF number that is money set aside for
