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RECA Commercial Unit2 Questions and
Correct Answers/ Latest Update /
Already Graded
Commercial real estate assets have a number of attributes that
make them unique relative to other types of investments. These
attributes include the following: (x10)
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Ans: 1. They involve land
2.Transaction time frames are long
3. Transaction costs are high
4. they are expensive
5. They are long lasting
6. Highly regulated
7. have a long production cycle
8. are management intensive
9. are heterogeneous
10. Involve measuring return on investment
1. Long-lasting, Durable Goods
2. Expensive, High-valued (left for well capitalized investors)
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3. Transaction Costs: Due diligence and commissions alone comprise
about three to five percent of transaction costs.
4. Transaction Time Frame
5. Land
6. Heterogeneous: every parcel of land is unique so every commercial
real estate asset is unique. However, improvements are rarely identical as
unique site characteristics, land use regulations, and the market often
require different solutions from developers.
7. Return Measures
8. Management Intensive
9. Long Production Cycle: it takes time to develop and construct new
commercial real estate assets to meet the needs of the expanding
population. This results in the real estate supply being relatively slow to
respond to changes in demand (i.e. inelastic supply).
10. Highly Regulated
Inelastic supply
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Ans: there is a limited supply. To illustrate, many cities are geographically
constrained and have a Land Use Bylaw that limits the ability to change
the use of a parcel of land. This results in a relatively inelastic supply of
land for commercial purposes. Inelastic supply means the supply cannot
readily adjust to changes in demand or price.
four major commercial real estate asset product types according to
Real Capital Analytics
RECA Commercial Unit2 Questions and
Correct Answers/ Latest Update /
Already Graded
Commercial real estate assets have a number of attributes that
make them unique relative to other types of investments. These
attributes include the following: (x10)
,2 | Page
Ans: 1. They involve land
2.Transaction time frames are long
3. Transaction costs are high
4. they are expensive
5. They are long lasting
6. Highly regulated
7. have a long production cycle
8. are management intensive
9. are heterogeneous
10. Involve measuring return on investment
1. Long-lasting, Durable Goods
2. Expensive, High-valued (left for well capitalized investors)
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3. Transaction Costs: Due diligence and commissions alone comprise
about three to five percent of transaction costs.
4. Transaction Time Frame
5. Land
6. Heterogeneous: every parcel of land is unique so every commercial
real estate asset is unique. However, improvements are rarely identical as
unique site characteristics, land use regulations, and the market often
require different solutions from developers.
7. Return Measures
8. Management Intensive
9. Long Production Cycle: it takes time to develop and construct new
commercial real estate assets to meet the needs of the expanding
population. This results in the real estate supply being relatively slow to
respond to changes in demand (i.e. inelastic supply).
10. Highly Regulated
Inelastic supply
, 4 | Page
Ans: there is a limited supply. To illustrate, many cities are geographically
constrained and have a Land Use Bylaw that limits the ability to change
the use of a parcel of land. This results in a relatively inelastic supply of
land for commercial purposes. Inelastic supply means the supply cannot
readily adjust to changes in demand or price.
four major commercial real estate asset product types according to
Real Capital Analytics
