Commercial Real Estate

An Introduction to Argus Modeling and Its Benefits

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An Introduction to Argus Modeling and Its Benefits

For more than a decade now, the CRE (Commercial Real Estate) industry has been actively embracing technology. Digital transformation has been the name of the game. Key stakeholders like real estate investors, property consultants, brokers, asset managers, and more have realized the importance of ‘prop-tech’ (property technology) to accelerate their businesses and unlock new opportunities. The tremendous amounts of capital inflow validate this trend into the prop-tech space, touted to grow to USD 10.9-17.2 billion in 2021 globally, according to a Deloitte report. Its usage has jumped a whopping 1072% in the last five years.

US Proptech fundng forecast 2020-21 graph

In the wake of the pandemic, most of the CRE companies were forced to move key operations online; remote work, virtual property walkthroughs, etc., became the norm. Crucial operations like property valuation and projected cash flow calculations needed the use of robust software because of the vast volumes of unstructured data generated on a daily basis. Against this backdrop, it is vital to have a bird’s eye view and know asset performance inside out. Given the complexities involved, Excel-based financial models, which were mainstream in the last decade, just don’t cut it anymore. You need a comprehensive software solution to efficiently manage large-scale multi-tenant, commercial projects.

Say hello to Argus Modeling.

What Is Argus Modeling?

Argus Modeling is a tool used by CRE industry professionals to gain complete visibility into an asset. It allows you a time-wise break down of your commercial real estate lease. It is an elegant way to model commercial property leases without going through the hassle of building an Excel financial model from zero. You can evaluate a new real estate opportunity more effectively without breaking a sweat.

Argus financial modeling lets you develop future cash flow models automatically for a number of leases simultaneously. It can make sense of complex variables like rent hike schedules, chances of renewals, reimbursement mechanics, re-leasing hypotheses, and more, that influence the cash flow numbers.

Argus real estate modeling is a no-brainer for commercial real estate players who buy or lease industrial, corporate, hospitality, or retail spaces. It spits out tonnes of useful data and valuable insights that can shed light on a project’s yield and make the project analysis easier.

Why do you need Argus Modeling?

Collating all the real estate data in one place and analyzing it requires a solid modeling framework where just Excel can’t suffice, which is why all the real estate decision-makers are increasingly turning to Argus modeling to assess financial data and understand its repercussions on property values and investor ROI.

Argus financial modeling is in vogue among asset managers, CRE investors, and lenders alike to create cash flow analyses from scratch and perform operating due diligence. This, in turn, helps them to accurately evaluate and underwrite commercial real estate properties.

Argus Modeling - The How

The Argus modeling process is based on user input. But feeding lease and financial documentation data into the Argus model diligently is a cumbersome and time-consuming process. Time is money in the CRE industry and is often the deciding factor in a successful or a failed purchase.  Docsumo can automate the manual underwriting process with improved accuracy and speed. 

The Argus API

In December 2019, the Altus Group, the company that builds, supports, and maintains the Argus software, announced the launch of its flagship Argus API— an integration gateway that connects Argus solutions with other customer applications, systems, and data through the cloud. This was born out of a need to maintain data consistency across different CRE systems. For example, rental data is stored in in-house ERP systems, while lease information is housed in lease management systems. The Argus application holds all the mission-critical asset and portfolio data. These disparate systems need to talk to each other to ensure data transparency and smooth workflows.

The Argus API is the glue that binds everything together. It is a cloud-based interface that will enable customers to export or feed data into their Argus database without accessing the Argus application, thus saving precious time and enhancing data quality. Through Argus API, production data can be seamlessly updated across different systems. Clients can also make real-time changes to their models, redo the number crunching, and get updated results through an API call, bypassing the Argus application altogether. 

Benefits of Argus Modeling

If you’re on the fence about the potential of a commercial real estate opportunity, the ability to predict the returns on a lease over an extended period is crucial. With Argus real estate modeling, you can compare different deals and arrive at an informed decision faster.

Armed with Argus modeling, you can:

  • Keep abreast of valuation techniques
  • Define benchmarks to validate property assumptions
  • Get critical property insights to eliminate risky propositions
  • Seize promising opportunities before others
  • Optimize operating expenditure
  • Create a standardized portfolio

Argus Group has multiple Argus solutions depending on your use cases like Argus Enterprise, Argus Developer, Argus Taliance, and Argus EstateMaster. Let us take a deep dive into the benefits of its popular Enterprise solution:-

The only caveat of Argus Modeling is that it relies heavily on manual user input. But there’s a smart workaround for that, too— Docsumo. Docsumo is an intelligent AI software that converts all your unstructured documents to actionable data that you can process further, using best-in-class OCR technology. Works with any kind of documents, including invoices, receipts, account statements, and more, with hassle-free setup. So you can upload all your property documentation to Docsumo and get structured data without all the boilerplate that you can then feed into your Argus models. You can get a free Docsumo demo here.  

Suggested Case Study
Automating Portfolio Management for Westland Real Estate Group
The portfolio includes 14,000 units across all divisions across Los Angeles County, Orange County, and Inland Empire.
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Pankaj Tripathi
Written by
Pankaj Tripathi

Helping enterprises capture data for analytics and decisioning

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