MGMT 2035 MIDTERM TEST LATEST
UPDATED
Ricardo's Law of Rents - ANSWER its the profit that users stand to make from
using the land that drives their willingness to pay rent
Productivity - ANSWER output per unit of input
Higher productivity => higher output per acre => Higher profit per acre
Scarcity - ANSWER think superior land and average land. think rented versus
vacant
Usage Value - ANSWER the value the operator places on using the property
(i.e. the amount of profit they attribute to the locale and structure provided by
the property)
The higher the Usage Value => the more rent the operator is willing to pay
(Law of Rents)
Highest and Best Use - ANSWER the use of a parcel which will produce the
highest return or price to the owner
or
The unique pairing of (1) a piece of land with (2) a building which perfectly
capitalizes on the land's unique characteristics (think: locale) and therefore
maximizes cash flows to the operator on that site.
comparative advantage - ANSWER the ability of an individual or group to
carry out a particular economic activity (such as making a specific product)
more efficiently than another activity
In other words...
what are you especially goood at as a result of your unique characteristics
or
what you're especially or uniquely good at relative to the other things you could
be doing
, Relationship between Unique characteristics, Comparative advantage, and
Highest and Best Use - ANSWER The higher the operator places on the land,
the more value the land has.
Bid-rent and Bid-rent Curve - ANSWER the maximum rent that a potential
real estate space user would be willing to pay (i.e. "bid") for a specified location
Bid Rent Curve tells us not only HOW MUCH rent will be paid but also,
WHAT TYPE OF USER will be paying it.
Bid rent curve differentiates our urban spaces (think urban structure models).
See slide 83 (of lecture 2.3)
Concentric Circle Model - ANSWER Central Business District
From a central business district, several concentric zones radiate outward
Axial Model - ANSWER Emphasizes the importance of transportation
Land tends to develop along major transportation nodes
Sector Model - ANSWER Affirms part of the bid-rent curve assumption
(closer to CBD is better
Based not on concentric circles but rather wedges of use extending out from the
CBD
Multi-Nuclei Model - ANSWER Certain activities require specialized facilities
Many similar activities benefit from close proximity to one another
Combo of Axial and Sector Model
Long Gestation Period - ANSWER time between the conception of a
development project and its actual completion and subsequent entry into the
available supply may be several years...
Long gestation period makes the supply of real estate slow to respond to
increases or decreases in demand. Because the supply cannot be increased
quickly, increased in demand often results in rapid upward price movement.
UPDATED
Ricardo's Law of Rents - ANSWER its the profit that users stand to make from
using the land that drives their willingness to pay rent
Productivity - ANSWER output per unit of input
Higher productivity => higher output per acre => Higher profit per acre
Scarcity - ANSWER think superior land and average land. think rented versus
vacant
Usage Value - ANSWER the value the operator places on using the property
(i.e. the amount of profit they attribute to the locale and structure provided by
the property)
The higher the Usage Value => the more rent the operator is willing to pay
(Law of Rents)
Highest and Best Use - ANSWER the use of a parcel which will produce the
highest return or price to the owner
or
The unique pairing of (1) a piece of land with (2) a building which perfectly
capitalizes on the land's unique characteristics (think: locale) and therefore
maximizes cash flows to the operator on that site.
comparative advantage - ANSWER the ability of an individual or group to
carry out a particular economic activity (such as making a specific product)
more efficiently than another activity
In other words...
what are you especially goood at as a result of your unique characteristics
or
what you're especially or uniquely good at relative to the other things you could
be doing
, Relationship between Unique characteristics, Comparative advantage, and
Highest and Best Use - ANSWER The higher the operator places on the land,
the more value the land has.
Bid-rent and Bid-rent Curve - ANSWER the maximum rent that a potential
real estate space user would be willing to pay (i.e. "bid") for a specified location
Bid Rent Curve tells us not only HOW MUCH rent will be paid but also,
WHAT TYPE OF USER will be paying it.
Bid rent curve differentiates our urban spaces (think urban structure models).
See slide 83 (of lecture 2.3)
Concentric Circle Model - ANSWER Central Business District
From a central business district, several concentric zones radiate outward
Axial Model - ANSWER Emphasizes the importance of transportation
Land tends to develop along major transportation nodes
Sector Model - ANSWER Affirms part of the bid-rent curve assumption
(closer to CBD is better
Based not on concentric circles but rather wedges of use extending out from the
CBD
Multi-Nuclei Model - ANSWER Certain activities require specialized facilities
Many similar activities benefit from close proximity to one another
Combo of Axial and Sector Model
Long Gestation Period - ANSWER time between the conception of a
development project and its actual completion and subsequent entry into the
available supply may be several years...
Long gestation period makes the supply of real estate slow to respond to
increases or decreases in demand. Because the supply cannot be increased
quickly, increased in demand often results in rapid upward price movement.
