NCPQs
Given the following information, calculate the NPV for this property: outflow at time zero: -$200,000; discount rate: 18%; NOI for year 1: $25,876; NOI for year 2: $23,998; NOI for year 3: $23,013; NOI for year 4: $22,105; NOI for year 5: $23,670; BTER in year 5: 345,000.
$25,721
Given the following information, calculate the estimated Gross Sales Price for this property at the end of year 3: Entrance Cap Rate: 6.00%; Exit Cap Rate: 6.25%; NOI for year 1: $25,876; NOI for year 2: $23,998; NOI for year 3: $23,013; NOI for year 4: $22,105; NOI for year 5: $23,670.
$353,680
There are a set of restrictive conditions that REITs must satisfy on an ongoing basis in order to maintain their special tax status. All of the following statements regarding the main restrictions are false except
-no five investors can own more than 10 percent of a REIT's shares. -a REIT must distribute at least 75% of its taxable income to shareholders in the form of dividends. -at least 50 investors must own a REIT's shares. -at least 75 percent of the value of a REIT's assets must consist of real estate assets. (correct)
Given the following information, calculate the Equity Multiple for this property: outflow at time zero: -$200,000; discount rate: 18%; Entrance Cap Rate: 6.00%; Exit Cap Rate: 6.25%; NOI for year 1: -$25,876; NOI for year 2: -$3,998; NOI for year 3: $23,013; BTER in year 3: 345,000.
1.60
Given the following information, calculate the going-in capitalization rate for the specific property: first-year NOI: $19,000; acquisition price: $155,000; equity investment: 20%
12.26
How many solutions to IRR are possible with the following cash flow? CF0:-700,000; CF1: +40,000; CF2: -71,000; CF3:-12,000; CF4: +1,200,000
3
Given the following information, calculate the funds from operation (FFO) for a publicly-traded REIT; net income: $1,200,000; gains/losses from infrequent and unusual events: $1,000,000; amortization of tenant improvements: $120,000; amortization of leasing expenses: $75,000; depreciation (real property): $2,675,000.
3,070,000
Given the following information on an interest-only mortgage, calculate the monthly mortgage payment: loan amount: $56,000; term: 15 years; interest rate: 7.5%.
350
Given the following information, calculate the funds from operation (FFO): net income: $1,200,000; gains/losses from infrequent and unusual events: $0; amortization of tenant improvements: $120,000; amortization of leasing expenses: $75,000; depreciation (real property): $2,675,000
4,070,000
A broker hired by a prospective tenant offers a landlord (owner) the following lease terms for 4,500 rentable square feet of office space. The broker's contract with the tenant requires a 4% commission be paid to them by a landlord whom they rent space from. How much total commission would the landlord owe the broker if the tenant signs a lease and pays their first month of rent with these terms. Term: 10 Years Rent: $25/sqft (the way office rent is typically quoted) Enter your solution without a dollar sign and without decimal places (a whole number).
45,000
Suppose equity investors have an agreement whereby the general partner/sponsor will split everything with the limited partners "pari passu" until an equity multiple of 3.00 is reached, then the GP/Sponsor will be entitled to a promote equal to 90% of any additional returns. The sponsor/GP has invested 10% of the equity, and the limited partners have invested 90% of the equity. What is the expected IRR of the sponsor/GP given the levered cash flows below? CF0: -1,000,000CF1: 200,000CF2: 400,000CF3: 600,000CF4: 2,200,000
71.3%
Value of a property depends on all but which of the following? Calendar dates of expected cash flows Magnitude of expected cash flows Timing of expected cash flows Riskiness of expected cash flows
Calendar dates of expected cash flows
Value of a property depends on all but which of the following? Timing of expected cash flows Magnitude of expected cash flows Riskiness of expected cash flows Calendar dates of expected cash flows
Calendar dates of expected cash flows
t/f A fixture is an object that formerly was personal property but has become real property. Of the four rules for determining whether an object has become a fixture, character of the article and manner of adaptation is the most dominant rule (i.e., if there is a conflict, the rule that prevails).
False
t/f At the end of 2015, commercial banks and other financial institutions collectively owned $15 billion in commercial real estate equity. The vast majority of these holding are the result of indirect investment through real estate securities.
False
t/f The limited partnership ownership form requires cash flows to be allocated to each shareholder in proportion to his or her ownership of the entity, thereby preventing special allocations to multiple classes of investors.
False
The main tool that a developer will use in determining the financial feasibility of a project is
NPV analysis
In creating evidence of title, a title search attempts to identify the sequence of conveyances passing ownership down through time. This sequence is more commonly referred to as the root of title. title commitment. title abstract. chain of title.
chain of title
t/f Concerned with a potential information asymmetry problem, state legislators have been proactive in passing legislation that protects the rights and interests of retail tenants more than any other product type tenants.
false
t/f Feasibility analysis is often considered the "entry ticket to development"
false
t/f If an investor increases their leverage rate, say from 75% to 80%, we would expect NPV increases, while IRR decreases.
false
t/f Marketing a property to prospective tenants would be considered a primary responsibility of an asset manager.
false
t/f Suppose that a developer preleases space to a financially strong, national tenant such as Home Depot, without having yet built the structure in which they will be leasing space. This is commonly referred to as a ground lease.
false
t/f When property managers are looking to secure a mix of tenants for which "the whole is greater than the sum of its parts," or in other words, a group of tenants that shares similar characteristics such that the experience of living together is mutually beneficial, they are seeking what is referred to as permanence potential.
false
In contrast to public markets, private markets are characterized by individually negotiated transactions that take place without the aid of a centralized market. Therefore, private markets will generally have high transaction costs and high liquidity. low transaction costs and high liquidity. low transaction costs and low liquidity. high transaction costs and low liquidity.
high transactions costs and low liquidity
When construction costs exceed the amount of the construction loan, a developer may seek to cover the gap using mezzanine financing. All of the following statements regarding mezzanine debt are false except mezzanine debt use is less expensive than normal construction financing. mezzanine debt use must go through the foreclosure process in the case of default. mezzanine debt use is less expensive than equity financing. mezzanine debt will dilute equity returns.
mezzanine debt use is less expensive than equity financing.
The management agreement provides for a management fee that is usually in the range of 3% to 6% of which of the following measures of property income? potential gross income income tax liability net operating income before tax cash flow none of the above
none of the above
Competition for the currently available supply of locations and space, coupled with the existing supply of leasable space, determines the -current level of rental rates for each submarket and property. -riskiness of the expected cash flows of an income-producing property. -timing of the expected cash flows of an income-producing property. -cost of financing the purchase of a property.
timing of the expected cash flows of an income-producing property.
t/f If a general contractor buys screws at Home Depot for a house that they are working on, they will ask that the cost of the purchase be reimbursed by the construction lender as a hard cost.
true
