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Question
Of the following lending relationships, which gives the borrower the most senior claim to the cash flows associated with a property?A.Straight debt
B.Joint venture
C.Land sale-leaseback
D.Complete sale-leaseback
Answer
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Related questions
Q:
Which of the following is an example of a negative easement appurtenant?
A.A driveway easement across one parcel to another.
B.Rights-of-way for roads.
C.A common drive easement where owners of adjoining lots must permit each other to use a driveway lying on their shaped property line.
D.A scenic easement used to restrict construction on adjacent parcels so as to preserve a valued view.
Q:
In 2007, the housing market was widely viewed as:
A.a resilient asset class that significantly softened the severity of the recession
B.a surging market pushing prices and new construction to unprecedented levels
C.the primary cause of a major economic downturn
D.unrelated to the condition of the U.S. economy
Q:
The size of a single family residential lot is typically:
A.less than one acre
B.between one and two acres
C.between two and three acres
D.greater than three acres
Q:
The market value of U.S. real estate held by non-real estate corporations is estimated to exceed $2 trillion. All of the following are examples of noninvestible commercial real estate that are held by non-real estate entities EXCEPT:
A.Medical office buildings owned by the doctors
B.Branch offices owned by the bank
C.Plant and equipment owned by steel corporations
D.Assembly plant building owned by a group of investors as part of a sale-leaseback agreement with an auto manufacturer
Q:
Given the following information on a 30-year fixed-payment loan, determine the remaining balance that the borrower has at the end of seven years. Interest Rate: 7%, Monthly Payment: $1,200.
A.$17,143
B.$79,509
C.$164,402
D.$180,369
Q:
Which of the following property subtypes is often considered the least vulnerable to functional obsolescence because of its relatively simple structure and long economic life?
A.Industrial warehouse
B.Hotel
C.Retail strip centers
D.Suburban office
Q:
Unlike many publicly traded stock and bond investments, commercial real estate investments:
A.can be bought and sold in highly liquid markets.
B.yield maximized returns when assets are held for short periods of time.
C.yield returns generated mostly from the asset's net operating income, rather than price appreciation.
D.have going-in and going-out transaction costs that are low (as a proportion of asset value).
Q:
The market for buying, selling, and leasing real estate can be characterized by all of the following EXCEPT:
A.localized markets
B.highly segmented markets
C.privately negotiated contracts
D.low transaction costs
Q:
What proportion of U.S. households own their home?
A.One-third
B.One-half
C.Two-thirds
D.Three-fourths
Q:
Which of the following terms refers to the present value of the right to receive a lump sum payment of $1 at the end of a particular year, given a specified discount rate?
A.Net present value
B.Present value factor
C.Future value
D.Net operating income
Q:
While the development of the secondary market for mortgages focuses on funding provided by long-term holders of mortgage assets, loan originators still play an important role in the growth of the commercial real estate market. Historically, the most active commercial mortgage originators have been:
A.Mortgage conduits
B.Government Sponsored Enterprises
C.Pension funds
D.Life insurance companies
Q:
Suppose that a tenant is interested in renting out a two-bedroom apartment for $1000 a month for the next year. While the tenant requires rent to be paid at the beginning of the month, he will not be depositing the rental check into a local savings account until the end of each month. If the annual interest that the tenant can earn on this account is 5% and interest is compounded monthly, how much will the tenant have in his savings account at the end of the year?
A.$12,278.86
B.$12,613.94
C.$13,330.02
D.$15,917.13
Q:
An alternative vehicle for financing commercial property involves having the lender acquire an ownership (equity) interest in the property by supplying a portion of the required equity capital in addition to providing the permanent debt financing. This type of financing arrangement is commonly referred to as a(n):
A.installment sale
B.joint venture
C.land sale-leaseback
D.complete sale-leaseback
Q:
The management agreement provides for a management fee that is usually in the range of 3 to 6% of which of the following measures of property income?
A.Potential gross income
B.Effective gross income
C.Net operating income
D.Income tax liability
Q:
One of the main distinctions between commercial mortgage loans and residential mortgage loans lies in the personal liability of the borrower. With residential loans, the lender can hold the borrower personally liable in the event of a default. Such loans are commonly referred to as:
A.recourse loans
B.nonrecourse loans
C.conforming loans
D.nonconforming loans
Q:
Assume an investor with $5000 to invest is considering several alternatives, each covering ten years. Which of the following alternatives would you expect the investor to choose accounting for the time-value-of-money in your calculations?
A.Investor receives $500 at the end of year 1, plus the original $5000 at the end of year 10.
B.Investor receives $50 at the end of each year for 10 years, plus the original $5000 at the end of 10 years.
C.Investor receives $500 at the end of the 10th year, plus the original $5000.
D.Investor receives $5000 at the end of year 10.
Q:
In general, most contracts - including real estate contract - can be assigned. All of the following statements regarding assignment are true EXCEPT:
A.Any type of personal performance contracted by one party cannot be assigned without that party's permission.
B.Land contracts are not assignable without the owner's permission.
C.If buyer's of real estate assign the contract, the new buyers may pay the agreed upon price and obtain title to the property.
D.When buyers assign their rights to someone else, they escape liability under the original contract.
Q:
Large commercial properties valued well over $10 million are often referred to as:
A.segmented property
B.investment-grade property
C.speculative-grade property
D.immobile property
Q:
Competition in the _________, where households and firms compete for the currently available supply of locations and space, determines the level of rental income for each submarket and property.
A.user market
B.capital market
C.government
D.local market
Q:
The demand for real estate derives from the need that participants in the user market have for shelter and convenient access to other locations. The primary participants in the user market include all of the following EXCEPT:
A.owner occupants
B.tenants
C.renters
D.pension fund managers
Q:
The right to pay unpaid taxes, plus interest and penalties, before public sale and to reclaim full title of the property is referred to as:
A.inverse condemnation
B.foreclosure
C.equity right of redemption
D.regulatory taking
Q:
Of the $3.6 trillion in outstanding mortgage debt in the U.S., approximately 71% is privately held by institutional and individual investors. Which of the following institutions is the largest single source of private mortgage funds?
A.Savings institutions
B.Life insurance companies
C.Government Sponsored Enterprises
D.Commercial banks
Q:
The rate that is used to discount expected future cash flows can be thought of as the return the investor is forgoing on an alternative investment of equal risk. In this framework, the discount rate is being thought of as which of the following?
A.Net present value
B.Opportunity cost
C.Closing cost
D.Future value
Q:
Which of the following items would most likely be considered a fixture?
A.Custom bookshelves
B.Refrigerator in a single-family residence being sold
C.Fence installed by the tenant of a rental property
D.Antique chandelier
Q:
The pooling of equity capital by investors to purchase real estate in the private market is referred to as syndication. With pooled ownership structures, investors expect to receive all of the following benefits EXCEPT:
A.Diversification.
B.Economies of scale in the acquisition and disposition of properties.
C.The ability to obtain debt financing at the portfolio level.
D.Management control of each of the properties in the syndicate's portfolio.
Q:
Commercial real estate loan application packages typically contain cash flow estimates that look at the expected cash flow from rental operations for the subject property. Specifically, lenders provide the borrower with a discounted cash flow analysis commonly referred to as a(n):
A.appraisal report
B.pro forma
C.loan commitment
D.rate lock agreement
Q:
An interest-only balloon mortgage loan is commonly referred to as a(n):
A.Mini-perm loan
B.Mezzanine loan
C.Land acquisition loan
D.Bullet loan
Q:
Given the following information, calculate the lender's yield. Loan amount: $166,950, Term: 30 years, Interest rate: 8 %, Payment: $1,225.00, Discount points: 2.
A.7.7%
B.8.0%
C.8.2 %
D.10.0 %
Q:
Given the following information on a fixed-rate loan, determine the maximum amount that the lender will be willing to provide to the borrower. Loan Term: 30 years, Monthly Payment: $800, Interest Rate: 6%.
A.$6,707
B.$9,295.15
C.$13,333
D.$133,433
Q:
Assume that a piece of land is currently value at $50,000. If this piece of land is expected to appreciate at an annual rate of 5% per year for the next 20 years, how much will the land be worth 20 years from now?
A.$100,898.99
B.$112,633.09
C.$123,860.81
D.$132,664.89