GAIA2 M 12

D

A developer ground-leased a site, constructed a building, then subleased the property to a tenant. For the remaining fi ve years on the lease, the developer pays $30,000 annually for the ground rent and the tenant pays $65,000 annually to the developer. Market rent for the building is $90,000, and the en!re property will be worth $1,000,000 at the end of the lease. If the appropriate yield rates are 10% for the leased fee, 15% for the sandwich leasehold, and 11% for the fee simple; if all income will be level for the remaining lease terms; and if the sum of the interests equals the fee simple; what is the yield rate for the tenant's (subleasehold's) posi!on? 21.56% 17.12% 27.78% 20.40%

B

A property is master-leased to a company that subleases space to individual tenants. What rela!onship best describes the rela!onship among the yield rates applicable to the various ownership posi!ons? Refer to the Symbols and Formulas handout. YLF > YLH > YSLH YLF < YLH < YSLH YLF > YSLH > YLH YLF < YSLH < YLH

B

A property will generate $120,000 net income for the next fi ve years when it will adjust to market at $200,000. Its mortgage is $1,400,000 at 5.75% for 30 years payable monthly. The terminal capitaliza!on rate is 8.0%, the market equity yield rate is 12%, and the projec!on period is fi ve years. $760,827 Correct! $2,160,827 $1,851,140 $2,087,791

D

An inducement for a tenant to lease space best describes which of the following terms? effec"ve rent excess rent overage rent concession

A

Assume an investor pays $1,200,000 for the equity posi"on in which net opera"ng income is $240,000 per year for five years; annual debt service is $118,530; loan balance in five years will be $1,689,649; property reversion will be $2,850,000. What is the investor yield? 9.58% 34% 15.83% 10.12%

D

Assume the following: net income at market rent, $200,000 per year for five years; property reversion in five years will be $3,850,000; tenant pays $185,000 per year; subtenant pays tenant $195,000. Terminal capitaliza"on rate is 5.6%. What is the value of the subleasehold interest if the discount rate is 11.5%? $2,090,620 $2,252,265 $711,726 $18,249

D

Assume the following: net income at market rent, $200,000 per year for five years; property reversion in five years will be $3,850,000; tenant pays $185,000 per year; subtenant pays tenant $195,000; terminal capitaliza"on rate is 5.6%. What is the value of the fee simple interest if the discount rate is 9.5%? $3,036,612 $3,571,429 $3,155,972 $3,213,568

B

Assume the following: net income at market rent, $200,000 per year for five years; property reversion in five years will be $3,850,000; tenant pays $185,000 per year; subtenant pays tenant $195,000; terminal capitaliza"on rate is 5.6%. What is the value of the leased fee interest if the blended leased fee discount rate is 8.5%? $3,104,181 $3,289,444 $3,328,850 $3,143,587

D

Assume the following: net income at market rent, $200,000 per year for five years; property reversion in five years will be $3,850,000; tenant pays $185,000 per year; subtenant pays tenant $195,000; terminal capitalization rate is 5.6%. What is the value of the fee simple interest if the discount rate is 9.5%? $3,155,972 $3,571,429 $3,036,612 $3,213,568

C

Assume the following: net opera"ng income $240,000 per year for five years, increasing at 2% per year; loan of $1,840,000 for 30 years at 5% compounded monthly; reversion in year five, $2,850,000. What is the value of the equity if the equity yield rate is 10%? $1,064,979 $1,180,953 $1,208,817 $2,712,984

C

Assume the following: net opera"ng income $240,000 per year for five years; loan of $1,840,000 for 30 years at 5% compounded monthly; reversion in year five, $2,850,000. What is the overall value if the equity yield rate is 10%? $2,400,000 $1,180,953 $3,020,953 2,927,596

C

Assume the following: net operating income $240,000 per year for five years; loan of $1,840,000 for 30 years at 5% compounded monthly; reversion in year five, $2,850,000. What is the value of the equity if the equity yield rate is 10%? $560,000 $1,087,596 $1,180,953 $3,020,953

A

Contract rent prior to deduction of concessions best describes which of the following terms? face rent effective rent excess rent market rent

B

Market rent is $200,000 for five years; property reversion will be 2,500,000; contract rent is $185,000; discount rate for fee is 10%; discount rate for leased fee income is 9%. What is the value of the leased fee interest? $2,344,414 $2,271,888 $2,253,598 $2,310,460

C

The amount by which contract rent exceeds market rent at the time of the appraisal best describes which of the following terms? deficit rent effective rent excess rent overage rent

A

The amount by which contract rent falls short of market rent at the time of appraisal best describes which of the following terms? deficit rent effec"ve rent excess rent overage rent

B

The landowner leases his site to a developer who builds a building and leases that to another. What name is given to the developer's posi"on? subleaseholder sandwich man leased fee fee simple

B

The level of sales at which a percentage clause in a lease is activated best describes which of the following terms? percentage rent breakpoint natural breakpoint overage rent

D

The level of sales at which the percentage rent equals the base rent as specified in a lease best describes which of the following terms? breakpoint market rent effective rent natural breakpoint

C

The ownership interest held by the lessor best describes which of the following terms? subleasehold estate leasehold estate leased fee estate fee simple estate

D

The percentage rent paid over and above the guaranteed minimum rent or base rent best describes which of the following terms? escala"on income excess rent effective rent overage rent

D

The rental rate net of financial concessions best describes which of the following terms? percentage rent breakpoint excess rent effective rent

A

The right held by the original lessee when the property is subleased to another party best describes which of the following terms? sandwich leasehold leased fee estate fee simple estate subleasehold estate

A

What is the PV of the equity posi!on for the following property? Five-year hold Y E = 12.5% $100,000 net income rising $5,000 per year $900,000 mortgage at 6% for 20 years payable monthly, annual debt service is $77,375 and balance a#er five years is $764,096 $1,500,000 property reversion $522,589 $610,824 $1,420,369 $319,887

A

What is the percentage rent paid over and above the guaranteed minimum rent or base rent? Correct! overage rent deficit rent excess rent effec!ve rent

D

Which of the following represents the typical relationship among yield rates involving a leased fee interest, a sandwich posi"on, and a subleasehold? The sandwich is the average of the leased fee and the subleasehold. The leased fee is higher than the sandwich, which is higher than the subleasehold. The leased fee is lower than the subleasehold, which is lower than the sandwich posi"on. The leased fee is lower than the sandwich, which is lower than the subleasehold.