What is the definition of loan to value (LTV)?

1. The value in terms of interest proceeds that the loan offers to the lender.
2. The current remaining value of the loan after subtracting all principal repayments.
3. The loan amount expressed as a percentage of the total asset value.
4. The monetary value of the loan.

Which of the following is the correct order for the commercial real estate process timeline?

1. Property search > preliminary analysis > due diligence > legal diligence & documentation > financing approval > subject removal > negotiation > closing
2. Property search > preliminary analysis > due diligence > negotiation > subject removal > financing approval > legal diligence & documentation > closing
3. Property search > preliminary analysis > negotiation > due diligence > legal diligence & documentation > subject removal > financing approval > closing
4. Property search > preliminary analysis > negotiation > due diligence > financing approval > subject removal > legal diligence & documentation > closing

Which of the following does NOT describe a special use property?

1. These properties tend to cluster to form a district of similar properties.
2. They are often closely linked to economic cycles.
3. They usually have lower loan-to-values and shorter amortizations.
4. The risk for a lender is that it is hard to get a new tenant into the facility in the case of defaults without significant modifications.

Why would an investor want to purchase real estate as an INVESTMENT?

1. They like riskier investments with higher returns and variance.
2. They want access to stable and predictable cash flows.
3. They want to take advantage of high bond yields.
4. They would like to convert rent payments into equity.

Which document initiates and serves as a roadmap for a real estate transaction?

1. Real Property Transfer Agreement
2. Purchase and Sale Agreement
3. Environmental Assessment
4. Real Estate Appraisal

Which of the four types of commercial real estate loans is considered the highest risk?

1. Construction Loan
2. Bridge Loan
3. Income-Producing Commercial Mortgage
4. Owner-Occupied Commercial Mortgage

What is the influence of environmental issues on the real estate lending transaction?

1. An increase to minimum debt service requirements
2. Potential termination of the deal altogether
3. An adjustment to shorten the amortization period
4. A downward adjustment of the LTV

Assuming there are 5 tenants, which of the following lease maturity profiles would get the strictest loan terms from a real estate lender?

1. Leases expiring in: 24, 24, 24, 24, 24 months
2. Leases expiring in: 12, 24, 36, 48, 60 months
3. Leases expiring in: 6, 9, 12, 24, 36 months
4. Leases expiring in: 12, 12, 12, 12, 12 months

Which of the following building descriptions best fits a 'class B' property?

1. A high-rise built 5 years ago built in the heart of the central business district.
2. A newly built corporate building in a suburban area.
3. An office building built 15 years ago close to the central business district that requires some renovations.
4. A small convenience store built 25 years ago in a rural area.

Select ALL the reasons why heavy industrial properties are less desirable as collateral for a loan.

1. Heavy industrial properties often have features that support heavy manufacturing or processing functions that can increase the risk of environmental contamination.
2. If the tenant defaults, there will be many costly modifications to make the property marketable for other tenants.
3. If the tenant defaults, it is unlikely to find a new tenant that requires the same specifications for the property.
4. If the tenant defaults, the property will be less desirable for future tenants, as it previously held a failed company.