Which of the following is NOT a component of Real Estate risk?

(A) Tenant rollover risk (B) Upcoming debt maturity (C) Property owner decides to sell the building (D) Key management turnover (E) Change in cap rates due to increasing in interest rates

Which of the following is NOT / NEVER a benefit of obtaining additional cash by refinancing?

(A) The investor can increase financial leverage (B) It is an alternative to a sale of the property (C) Risk is decreased

(D) No taxes have to be paid on funds received by additional borrowing (E) The additional cash may be able to be used for new investment

A company sells an office building that has appreciated in value and subsequently enters into a lease for the space. Which of the following statements is an accurate description of both the impact, and the cause of the impact, that the sale-leaseback transaction will have on the companys income statement?

(A) Increased interest expense due to the new lease (B) Higher taxable income will occur in year of sale because of a gain on sale (C) Cash flow will increase because the mortgage has been paid off (D) Higher taxable income will be realized because lease payments are not deductible