Calculation Method 7 for Years Vacant (Forecasted Amount for Years 7 through 10)

The system uses this setup information for this calculation:

Area of Unit: 10,000.
New Market Rate (from assumption header): 10.00.
Growth Pattern (from assumption header): FIXED.
Growth Patterns (from assumption detail): PCT02, FIXED01, SF.
Term of Assumption: 4 years.

Depending on the growth pattern type, the system calculates the forecasted amount differently. This table lists the formula that the system uses for each growth pattern type:

Growth Pattern Type	Formula
Percentage	(Recurring Billing Amount for 12-period Span) ×(Growth Pattern Percentage)
Fixed	Amount from Growth Pattern
Square Foot	(Area of Unit) × (Growth Pattern Square Foot Rate)

For the percentage growth pattern type, the system uses the area of the unit and the new market rate from the assumption header, which is an amount per square foot, to determine the base amount to which to apply the growth pattern: (Area of Unit) × (Market Rate) = (Base Amount)

For example:10,000 × 10.00 = 100,000

Note: The system applies the appropriate growth pattern (amount, percentage, or amount per square foot) to the base amount, based on the budget year, not the calendar year. For example, if the assumption were effective February 1, 2008 instead of January 1, 2008, the system would apply the growth pattern that is set up for year 1 to only 11 of the 12 months in year 08. The system would apply the growth pattern set up for year 2 to the remaining period (January 1, 2009 – January 31, 2009).

Next, the system compounds (accumulates) the amounts from the growth pattern entered in the assumption header for the first seven years before adding the result to the base amount. The system uses the resulting base amount instead of the recurring billing amounts that the system uses when the unit is leased.

This table shows how the system compounds the amounts that it uses in the calculation when the growth pattern is a percentage:

Year	Growth Pattern FIXED Compounded	Calculation
7	1,000 + 2,000 + 3,000 + 4,000 + 5,000 + 6,000 + 7,000= 28,000	100,000 + 28,000 = 128,000
8	1,000 + 2,000 + 3,000 + 4,000 + 5,000 + 6,000 + 7,000+ 8,000 = 36,000	100,000 + 36,000 = 136,000
9	1,000 + 2,000 + 3,000 + 4,000 + 5,000 + 6,000 + 7,000+ 8,000 + 9,000 = 45,000	100,000 + 45,000 = 145,000
10	1,000 + 2,000 + 3,000 + 4,000 + 5,000 + 6,000 + 7,000+ 8,000 + 9,000 + 10,000 = 55,000	100,000 + 55,000 = 155,000

Amount Used Instead of Recurring Billing Amounts:128,000 + 136,000 + 145,000 + 155,000 = 564,000

After the system calculates the total base amount for the years for which the assumption is effective, it multiplies the result by the growth pattern percentage from the detail assumption.

Although the calculations apply to the term of the assumption, the system does not use the corresponding values from the growth pattern assigned to the assumption detail. Instead, it starts over and uses the value from first year of the growth pattern and continues through the last year for which the forecast is generated.

This table shows how the system calculates the forecasted amount for years 7 through 10 for each growth pattern type based on the formulas:

Year	PCT02 (percentage)	FIXED01 (fixed)	SF (square foot)
7	128,000 × .05 = 6,400	50	10,000 × .10 = 100,000
7	136,000 × .07 = 9,520	100	10,000 × .12 = 120,000
9	145,000 × .10 = 14,500	125	10,000 × .15 = 150,000
10	155,000 × .12 = 18,600	150	10,000 × .18 = 180,000
Total	49,020	425	550,000

Note: The system converts percentages to the decimal equivalent when it performs the calculation.

The system updates the total forecasted amount to the first period of the first year that the assumption is effective in the F15L109 table. In this example, the system updates the total forecasted amount to period 01 of 2008.