1. When we discussed the Space Market, also known as the Rental Market, we said rent is determined by the supply and demand dynamics of the space. What are the demand and supply drivers in the rental market?

2. How does segmentation affect rental prices for physically similar space?

3. When the quantity of space demandedequals the quantity supplied, the market is said to have reached ______________________________ (fill in the blank)

5. Name the stages/phases of the real estate cycle. At which point in the real estate cycle curve would make the most sense for new construction to begin?

6 .What are some of the characteristics that help define the types of retail properties?

7. Rate the real estate asset types listed below (1 lowest risk-5 highest risk)

a.A 120 unit apartment building 95% occupied leased at market rents in a matured market with historic occupancy in the high 90s%.

b.A construction project for a 400 key hotel in New York

c.100,000 square foot office building 100% leased on a NNN basis to Investment grade tenant with a 15 year lease

d.A site in San Francisco with an existing 10,000 SF building that the investor plans to demolish when re-zoning is approved for a multifamily building.

e.A regional mall in Oklahoma, 85% leased, with 15% roll over in the next 3 years

8. The rate on a loan is based on an Index + Spread. Name and describe three types of risks a lender considers when estimating the spread on a loan?

9.Which appraisal method compares recently-sold properties in a market to arrive at a value estimate for a property with similar characteristics?

10. Circle all that apply: In the Income Capitalization approach to valuation:

a.The cap rate of recent similar sales in the market may be used to determine the value of the subject property

b.Debt service is an important component of the valuation

c.The Gross Income Multiplier, Direct Capitalization and Discounted Cash Flow techniques could be used to determine value

d.The cost of replacing the property is given consideration

e.All of the above

11. True or False: The direct capitalization valuation method incorporates income over a multi-year holding period.

12. The _________________ is the discount rate which yields a zero NPV for any given stream of cash flows.

13. Circle the correct answer. Which of the following data points are required for a Discounted Cash Flow:

a.Effective Gross Income Projections

b.Discount rate

c.Interest rate on the loan

d.a. & b.

e.a. & c.

f.a. b. & c.

14. Match the term with the most relevant example:

a.Modified Gross or Hybrid Lease

b.Concessions

c.Indexed rent increase

d.Expansion Option

e.Percentage rent

Examples:

Tenant has a right of first refusal to the adjacent space

Lessee pays a proportion of the revenues earned in the rented space

Reserved parking spaces and 2 months free rent

Rent is adjusted according to CPI

15. True or False: Staggering lease expirations mitigates the risk of volatility in the building's cash flow as it reduces the building's exposure to the changes in the rental market at a single point in time.

16. A small warehouse building is leased to a high quality tenant on a long term basis. The property is expected to produce $150,000 in net income from rental operations each year for seven years. The expected sale of the property at the end of the seventh year will generate additional net cash of $2,150,000.Assume the investor requires an 8% annual return on investments of similar risk. What is that investment worth today? (Please include the formula applied)

17. The owner of a 10-unit apartment building will deposit $3,000 per year ($300 per unit), in an interest bearing reserve account.These funds will be used to refurbish the apartments at the end of five years.If the deposits are made at the end of each year and will earn 3% interest compounded annually, what will be the accumulated value of those reserves at the end of 5 years? (Please include the formula applied)

18. You are valuing an investment that will pay you $11,000 the first year, $13,000 the second year, $15,000 the third year, $16,500 the fourth year and $20,000 the fifth year (all payments are at the end of each year). What it the value of the investment to you now is the appropriate annual discount rate is 8%?(Please include the formula applied)

19. Sam is buying a small office building for $250,000, and is putting 35% in equity.Sam has arranged to finance the remaining cost with a 4 year mortgage with a 5.5% interest rate and a 25 year amortization schedule.What is the monthly constant payment mortgage Sam must make? And what will be balloon payment due at loan maturity? (Please include the formula applied)

20. A partially amortizing mortgage is made for $80,000 for a term of 10 years. The borrower and lender agree that a balance of $30,000 will remain and be paid as a lump sum at loan maturity (balloon payment). If the interest rate is 7%, what must monthly payments be over the 10-year period? (Please include the formula applied)