TRUE/FALSE Analysis of affective rents tends to be superior to analysis of total rents over the life of a lease. The existing stock of space cannot be adjusted in the short run, but can be increased or decreased in the long run. A building owner charges net rent of $20 in the first year, $21 in the second year, and $22 in the third year, but is providing six months of free rent in the first year as a concession. Using a 10 percent discount rate, what is the effective rent over the three years? $17.28 $20.00 $20.94 $21.00 $21.73 Which of the following does the term "anchor tenant" usually refer to? Someone who leases space The largest tenant in an office building A department store in a mall The tenant who pays the highest rent in a mall Which of the following is FALSE regarding cap rates? Excess supply tends to drive cap rates up Rising interest rates generally tends to tower cap rates Excess demand and falling interest rates results in lower cap rates Excess demand leads to lower cap rates For which of the following reasons would a business prefer to own space rather than lease it? The business demands specialized or unique facilities Owning allows the business to develop skills in operating, maintaining, and repair real estate and the associated facilities Owning reduces operating flexibility The capital commitments with owning are lower than the capital commitments associated with leasing All of the above are reasons a business would prefer to own space rather than lease it