FINC 381 Exam 2

The right of government to acquire private property, without the owner’s consent, for public use in exchange for just compensation is referred to as

eminent domain

Real estate taxes represent the largest single source of revenue for a large portion of local governments. Most property taxes are applied in relation to the value of the property, or in other words, they are

ad valorem taxes

Growth management laws at the state level require local jurisdictions to plan for and meet certain requirements. One such requirement prohibits local development unless adequate infrastructure, schools, police/fire protection, and social services have been put in place first. This requirement is referred to as the

concurrency requirement

A property's value can be reduced by negative externalities that come from an outside agent imposing costs on the community at large. In order to offset the negative impact, some urban economists advocate “internalizing” these negative consequences by implementing

impact fees

Traditional zoning regulations are frequently criticized for being inflexible in forcing uniform types of development. One possible solution to this issue allows traditional zoning requirements to vary in exchange for an enhancement to the community, such as the construction of a park. This is more commonly referred to as a

PUD (planned unit development)

In the state of Florida, for example, homeowners may qualify for a tax exemption in which up to $50,000 will be deducted from the assessed value of the property before taxes are calculated as long as the property owner occupies a home as the family’s principal residence and has claimed residency within the state. This exemption is better known as the

homestead exemption

When a zoning ordinance is revised, some existing land uses then fall outside the new zoning classification. These land uses are referred to as

Non-conforming uses

One of the main criticisms of property taxes is that the property tax of lower income households is higher than that of higher income households, as a percentage of their respective incomes. In other words, taxes are criticized for being

regressive

Most real property in the United States is privately owned, but government regulations limit private property use and may play an important role in the determination of property value. Those who support government intervention argue that regulation is needed to address the unintended and unaccounted for consequences of one land user upon others, more commonly referred to as

externalities

A traditional zoning ordinance includes all of the following except

performance standards

Your firm is in need of 1450sf of USABLE space.  You are considering a building that has a rentable area of 196,700sf and common areas of 36,000sf.  Calculate the R/U factor for the building and then determine how much RENTABLE space your firm will have to lease in the building. (Round to the nearest sf).

  

1775 sf

When securing a new tenant for a commercial rental property, the owner of the property might incur an additional expense that amounts to the cost of refurbishing the rental space to meet the needs of the tenant's business. The allocation of money for this added expense is more commonly referred to as a(n):

TI allowance

Which expense reimbursement mechanism has the tenant reimburse the landlord for all expenses?

NNN

Which of the following options is the only one that is at the landlord's discretion?

relocation option

A tenant signs a 7-year lease that has an initial rate of $19.00/sf with 5% annual increases that occur on the anniversary of the lease commencement.  What is the rent (per square foot) in year 7?

Between 25.45 and 25.48

Rent for U.S. commercial properties (office, industrial, and retail space) is typically quoted as:

  

dollars per square foot per year

The large and generally well-known retailers who draw the majority of customers to a shopping center are more commonly referred to as:

anchors

Below is a picture of a part of an industrial building.  Choose the answer below that best matches the picture and what was covered in the lecture/videos.

  

dock high door

Most industrial leases have which kind of expense reimbursement method?

Triple Net (NNN)

Which of the images below correspond to a "garden style apartment"?

C

There are 49,124 apartment units in a city and 1,327 of them are vacant.  What is the occupancy rate for apartments?

97\.3

The vacancy rate of apartments at the beginning of the year in City X was 2.95%.  There were 122,000 apartment units at the start of the year and there were 3,900 units completed during the year.  Net absorption for the year (units that became occupied minus units that went vacant) was 1,100 units. 

11\.0%

The Meadows at Pentaverate Manor have three types of apartments.  The current monthly market rent for each type is listed in the table below.  Also, the current average rent for all leased apartments is listed.  What is the loss to lease for the apartment complex for the month?

4,600

All leases for housing around the University of Tennessee are over which period of time?

  

12 months - roughly from Aug 1 to July 31 each year

In the initial round of market analysis, analysts will attempt to provide key numbers that characterize the current condition and trend in the market. For rental retail space, the key market parameters in question would most likely include all of the following EXCEPT:

  

projected property sales rates

Which of the following sentences most closely fits the term "submarket"?

  

A distinct part of a larger market

The Dallas industrial market has 768,500,000 square feet of space at the start of the year, with 723,927,000 square feet occupied.

During the year, assume there was 31.2 million square feet added to supply.  The total amount of space vacated during the year was 9.5 million square feet and the amount of space with new leases was 29.3 million square feet.

What is the year-end occupancy level?

Between 92.99 and 93.01

Preferences of users of real estate can vary with time, prosperity, and context. The nuances in the preferences or needs of market subgroups are commonly referred to as:

market segmentation

Which of the following describes a Metropolitan Statistical Area?

  

A central city and its surrounding counties

The Dallas industrial market has 768,500,000 square feet of space at the start of the year, with 723,927,000 square feet occupied.

During the year, assume there was 31.2 million square feet added to supply.  The total amount of space vacated during the year was 9.5 million square feet and the amount of space with new leases was 29.3 million square feet.

What was the **gross** absorption?

29\.3 (with margin: 0)

The Dallas industrial market has 768,500,000 square feet of space at the start of the year, with 723,927,000 square feet occupied.

During the year, assume there was 31.2 million square feet added to supply.  The total amount of space vacated during the year was 9.5 million square feet and the amount of space with new leases was 29.3 million square feet.

What was the **net** absorption?

\-11.4 (with margin: 0)