Rent and Expense Growth Assumptions

[Rob Beardsley]

Hi everyone,

I would like to survey the crowd as to what everyone is using for organic rent growth and expense growth assumptions. What are your baseline numbers and how do the idiosyncrasies of a given deal affect these numbers (if at all) and do you adjust these assumptions for different submarkets/markets? 

Additionally, I'm finding it difficult to reconcile the fact that when you project 3% rent growth and 2% expense growth for 5 or 10 years, your expenses as a percentage of EGI (which should be around 50-55%) get way out of wack (40% or less). Does this low of an expense ratio ever become a reality? If not, how does strong rent growth over a number of years play out in these numbers?