Real Estate HW CH.1

Which of the following is not important to the location of most commercial properties?

Access to schools

Among the following four categories, which is the largest asset category in the portfolio of the average U.S. household?

Housing

Participants in the capital markets can be divided into four main categories: private equity, public equity, private debt, and public debt. Bank lending as a source of financing for the acquisition of real property occurs in the:

Private debt market

Real estate values derive from the interaction of three different sectors in the economy. Which of the following sectors serves to allocate financial resources among households and firms requiring funds?

capital market

An example of a real estate asset that trades in the public debt market is a(n):

commercial mortgage-backed security (CMBS).

Based on your understanding of the supply and demand dynamics of user/space markets, the new construction of units would, all else equal, cause which of the following effects?

decrease equilibrium rental rates and decrease property value

The expected stream of rental income is capitalized into value by converting expected future cash flows into present value through a process called:

discounted cash flow analysis.

An example of a real estate asset that trades in the public equity market is a(n):

equity REIT.

When viewed as a tangible asset, real estate can be defined as the land and its permanent improvements. Improvements on the land include:

fences.

Each commercial property has unique features, whether it is its age, the building design of its structures, occupancy or its location. As such, real estate markets consist of assets that are considered:

heterogeneous.

Real estate markets differ from other asset classes by having all of the following characteristics except

homogeneous product.

Storm water drainage systems are best described as

improvements to the land.

Based on your understanding of the supply and demand dynamics of user/space markets, an increase in demand for leasable space would, all else equal, cause which of the following effects?

increase equilibrium rental rates and increase property value

The term real estate is used in three fundamental ways. When real estate is defined as a bundle of rights associated with ownership and the use of the site and improvements, it is being viewed as purely a(n):

intangible asset.

Which of the following would be considered a tangible asset?

land

Especially in terms of retail properties, which of the following attributes is considered the most likely to result in drastic value differences between otherwise similar properties?

location attributes

Real estate is property, which can be either a tangible or an intangible asset. Which of the following would be considered an intangible asset?

mortgage

Capital markets can be divided into four main categories: private equity, public equity, private debt, and public debt. An example of a real estate asset that trades in the private equity market is a(n):

real property.

All of the following are examples of an improvement on the land EXCEPT:

streets

The term real estate is used in three fundamental ways. When real estate is defined as the land and its improvements, it is being viewed as purely a(n):

tangible asset

Real estate consists of the physical structures and infrastructure that accompany the land. All of the following are examples of an improvement to the land EXCEPT:

the building and parking lot.

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.

If we desire to classify land by its use, land that consists of residential, industrial, commercial, and institutional land uses would be classified as:

urban land.

The demand for real estate derives from the need that market participants (e.g., owner occupants, tenants, renters) have for shelter and convenient access to other locations. This competition for physical location and space occurs in the:

user market.

Real estate is defined as land and its permanent improvements. Which of the following is an example of an improvement to the land?

water and sewer systems