My natural breakpoint differs between ARGUS Enterprise and Valuation DCF. The base rent matches. What am I missing?
Compare the rent components used in the breakpoint, not just the base rent. In the documented Enterprise 10.1 calculation, base rent, fixed steps and CPI contribute. Valuation DCF lets you select the components. The models can therefore use different rent totals even when the base rent matches.
See the steps and a follow-up question
- Identify the components feeding the natural breakpoint in each model.
- Check whether fixed steps and CPI have been included on both sides. Align the assumptions only where the lease and your modelling approach support it.
- Recalculate and reconcile the breakpoint again. This check does not establish that every other lease assumption matches.
Will changing the components reconcile the whole valuation?
Not necessarily. This diagnoses one difference. Review the remaining lease and valuation assumptions separately, and confirm the rules in your software release.
Read the complete worked example