1) A gross lease is one in which the tenant only pays rent, and the owner of the property pays the operating expenses and provides all services A) The B) False 2) CPI adjustments are used to adjust rents by all or part of the increase in the Consumer Price Index A) True B) False 3) Which of the following tends to lower effective rents? A) Percentage rent B) Step up provisions C) Concessions D) CPI adjustment 4) In the income approach to valuation, replacement cost is reduced by costs such as those that are associated with curing deterioration of the property and the economic loss of value from incurable factors due to change in design or layout efficiency A) True B) False 5) A gross income multiplier can be calculated by dividing the gross income by the sales price A) True B) False ) A property is purchased for $350,000 Based on an annual growth rate of 3%, the resale value at the end of year 10 would be $456,671 A) True B) False 7) The capitalization rate of a newly constructed apartment building will be more than that of a relatively old apartment building, which is comparable in all other aspects B) False A) True 8) The sales comparison approach to appraisal is preferred because it is the only objective appraisal approach A) True B) False 9) One advantage of the gross income multiplier technique is that it is most suitable for properties in which operating expenses vary widely across the properties being surveyed A) True B) Pale MacBook Air 10) The rationale for using the cost approach to appraisal is that any informed buyer would not pay more for a property than what it would cost to buy the land and build the structure A) True B) False 11) When conducting an appraisal, only one of three approaches should be selected to determine the property value A) True B) False 12) Consider the figure below. Point represents: A) Equilibrium occupancy B) Market rent C) Vacancy D) Shortage Rent / Unit Supply . E C Demand D Units of Space Existing Stock Space 13) For which of the following reasons woeld a business prefer to own space rather than lease in A) The business demanda specialized or unique facilities B) Owning allows the business to develop skills in operating, maintaining and repairing real estate and the associated facilities C) Owning rules operating flexibility D) The capital commitments with owning are lower than the capital commitments sociated with lasing MacBook Air 14) A building owner charges net rent of $20 in the first year, $21 in the second year, and $22 in the third year. Using a 10 percent discount rate, what is the effective rent over the three year? A) 320.00 B) 52094 C) $21.73 D) 35207 15) Which of the following is NOT considered to be an office or retail property! A) Single-tenant - build to set B) Regional shopping center C) Wwehouse D) Shopping mall 25 16) The difference between the existing stock of space and the equilibrium occupancy is known A) Supply B) Demand C) Equilibrium D) Vacancy 17) The supply of space is AS thelatie in both the short rum and the long run B) Elantie in both the short run and the long run C) Relatively inelastic in the short and highly elastic in the long run D) Relatively else in the short run, and highly relate in the long in 18) Which of the following does the term anchor manually refer to A) Someone who loves space By The largest tenant in an office building C) Adepartment store in small D) The tena who pays the highest rent in a mall 19 Which of the following does the inline for to? Amaliers in all the chosen B) Tin whose are line with estimates C) Tants who pay their rent indb Dy Allocated into the mallit Buding anche 20) Which of the following FALSE regarding copies Al Espends to deve cartes up B) Really end to C) Es demand and falling install in lower caps Desde este care MacBook Air 80 DOO 13 DOD IN FO 21) Which of the following leads to rent premiams? A) Apartments on the periphery of a site, higher floors with no elevators B) Second or third levels in multi-level malla Middle floors in an office building D) Apartments on higher floors with elevators 22) The price a potential tenant must pay to lease a specific type of real estate under the current economic conditions is: A) Percentage rent B) Market rent Effective rent D) Base rent 23) Which of the following would be considered as opere pass through in a lease? A) Mortgage payments B) Landscaping fees C) Security costs D) Property taxes 24) Consider the figure below. The difference between the existing stock of space and Point D represents: A) Equilibrium occupancy B) Market rent Vacancy D) Shortage Rent / Unit Supply B A E Demand D Units of Space Existing Stock of Space MacBook Air 25) The existing stock of space cannot be adjusted in the short run, but can be increased or decreased in the long run. A) True B) False 26) The use of a CPI index in a lease contact shifts risk to the team A) True B) False 27) The great majority of businesses lease the space they occupy rather than purchasing it outright A) True B) False 28) Income after deducting low of rents don to Vacancy and nonpayment of rents, as well as any concessions, is referred to as A) Potential gross income B) Effective gross income C) Net operating income D) Before-tax cash flow 29) Which of the following statements regarding the sales comparison approach to appraisal is TRUEY A) As a rule of thumb transactions involving foreclosures should be discounted by 10 peront B) The comparable building characteristics are more important than the comparable propertier location for performing the sales comparison C) The comparable sales must involve transactions between related individuals D) The only factors important for comparable analysis are property size, building size, ape of the building, and the condition of building 30) Which of the following techniques is NOT associated with the income approach to valuation A) Capitalization rate B) Discounted present value Factor discounting rates D) Gross income multiplier 3)Consider a building with a very long economic life. Assume at the end of year 6, NOI will be $80,000 and is expected to grow at a rate of 2 percent per year. Your company's required tate of retum is 12 percent. As part of your analysis, you must calculate the reversion value CREV) at the end of years, which would be A) 5571.429 1) Soit, C) 5800,000 MacBook Air D) $4,000,000 32) Consider a property with NOI of $72,000 and a debt coverage ratio of 1.2 applied to fint year NOL What would be the estimated monthly mortgage payment? A) $5,000 B) 57,200 C) $60,000 D) $86,400 33) Which of the following factors is NOT part of the definition of market value? A) Payment is made in terms of cash in U.S. dollars of a comparable financial arrangement B) The property has been on the open market for less than a year C) Buyer and seller are typically motivated D) Price is not affected by special or creative financing 34) Regarding the value of a property, an appraisal: A) Calealates value B) Confits value C) Estimates valve D) Determines value 35) Which of the following steps normally would be used in the cost approach to value? A) Estimate net operating income of the property B) Multiply accrued depreciation by the assessed cost C) Add depreciation to the land value D) Subtract accrued depreciation from the replacement cost 36) Which of the following choices represents the main categories of depreciation? A) Physical external, functional B) Physical, economic, locational External structural, financial D) Economic, physical external 37) A comparable property has a feature that is superior to the subject property. What adjustment would be made in the sales comparison approach to value A) Value of the feature would be subtracted from the sales price of the comparable property B) Value of the future would be added to the sales price of the comparable property Value of the feature would be subtracted from the value of the subject property D) Value of the feature would be added to the value of the subject property 38) A property produces a first-year net operating income of 524,000. Because of the long economic life of the building the income is considered as a perpetuity that will grow by 2.3% per year. Using a discount rate of 9.5%, the property value is estimated at: MacBook Air A) $276,968 B) $252,632 C) $200,000 D) 5342,857 39) The discount rate is a rate that a typical investor would normally require as an) return over investment holding period A) Maximum B) Risk free Expected D) Historical 40) Total possible income less any vacancy is A) Effective gross income B) Potential gross income C) Net operating income D) Gross income multiplier 41) Which of the following is TRUE concering the capitalization rate? A) It is an IRR B) It explicitly considers projected future income and changes in property value over time It expresses relationship between income and property value at a specific point in tiene D) It is the rate of return that investors expect to cut on all capital invested 42) Which is of the following a NOT tomally considered when conducting an appraisaling the cost approach A) Functional obsolescence B) Effective age Capitalizationale D) Replacement cont 43) Which of the following income capitalization technique is based on the principle that buyers will not pay more for a property than the present value (PV) of all future Net Operating Income (NOD A) Direct capitalization method m Ecctive gross income method C) Potential to come method D) Discounted cash flow method 44) The difference between the total property value (ccounting for rents and cash flow) and the cost of constructing an improvement on a given A Residual land van B) Highest and best value MacBook Air gos Q00 DOD F . II C) Land value differential D) Excess land value 45) The principle that an informed purchaser would not spend more for a piece of real estate than the cost to purchase the land and the cost to construct a structure, provides the rationale for which of these valuation methods? A) Sales comparison approach B) Income approach Cost approach D) Direct capitaliration approach 46) Capitalization rates will differ from yield rates when the income is expected to over time A) Suy the same B) Increase C) Decrease D) Increase and decrease 47/Consider the figure below. If the demand for units increases, what would happen in equilibrium, holding everything else constant? A) Market rent would decreas, equilibrium occupancy would decrease B) Market rent would decres, equilibrium occupancy would increase Market rent would increasequilibrium occupancy would decrease P) Market rent would increase;quilibrium occupancy would increase Rent Unit Supply B A Demand D Units of Sate Existing Sock of Space MacBook Air 30 000 DO stig FO $ % 48)A clause which requires a tenant in retail space to achieve a certain level of sales or the lease will be terminated is referred to as a A) Change clause B) Termination clause C) Option clause D) Santa clause 49) The dollar amount by which total rent exceeds base rent under a percentage lease for retail is referred to A) Overago rent B) Excess rent Percentage rent D) Marginal rent 50) Free Tent is a concession that a building owner may offer A) True H) False MacBook Air