GCAP REPE Education – Questions With Efficient
Solutions
What are the key areas that REPE firms engage? Correct Answer -
Capital raising, screening investment opportunities, acquiring or developing
properties, managing properties, and selling properties.
What do Limited Partners (LPs) generally consist of? Correct Answer -
Public and private pension funds, endowments, insurance companies, funds of
funds, and family offices/high net worth individuals.
REPE Investment Strategies & Criteria Correct Answer - Risk Profile,
Property Type, Transaction Size, Geographic Focus, and Equity or Debt
Investment
Core/Core Plus Strategies Correct Answer - Conservative Risk Profile
Opportunistic/Value Add Strategies Correct Answer - High Risk High
Return
Multifamily Properties Correct Answer - Buildings containing 5 or more
rental units.
Are multifamily properties risky? Correct Answer - No, they are the least
risky.
What is important to consider for office properties? Correct Answer - A
tenant's credit quality.
What is the least favored real estate asset class? Correct Answer - Retail
property types due to the rise of e-commerce.
What is the most favored real estate asset class? Correct Answer -
Industrial property types due to the rise of e-commerce.
What is the least operationally intensive real estate asset class? Correct
Answer - Industrial
, What is the most risky real estate asset class? Correct Answer -
Hospitality because it caters to travelers and tourists, so it is correlated with
the broader economy.
Cap Rate Correct Answer - The rate of return on a real estate investment
property based on the income that the property is expected to generate.
Cap Rate Formula Correct Answer - Net Operating Income / Purchase
Price
Appraisal Correct Answer - An estimate of the current value of the
property.
Funds From Operations (FFO) Correct Answer - Net (accounting)
income, plus tax depreciation, plus amortization of leasing commissions and
tenant improvements.
Internal Rate of Return ("Cash on Cash" Return) Correct Answer -
Percentage of interest earned on each dollar invested in a property over the
entire holding period.
Zoning Variance Correct Answer - An exception to the zoning ordinance
applied to a particular piece of property.
Easement Correct Answer - The right to use the land of another for a
particular purpose.
Rent Control Correct Answer - A price ceiling placed on rent.
Tax Assessment Correct Answer - In reference to property taxes, the
amount which must be paid; it is based on the property's assessed value.
Triple Net Lease (NNN) Correct Answer - A lease structure, most
common in retail properties, in which the tenant pays all operating (and
frequently capital) costs, including insurance, utilities, and property taxes in
addition to the contractual base rent and escalations.
Gross Lease Correct Answer - A lease of property according to which a
landlord pays all property charges regularly incurred through ownership,
Solutions
What are the key areas that REPE firms engage? Correct Answer -
Capital raising, screening investment opportunities, acquiring or developing
properties, managing properties, and selling properties.
What do Limited Partners (LPs) generally consist of? Correct Answer -
Public and private pension funds, endowments, insurance companies, funds of
funds, and family offices/high net worth individuals.
REPE Investment Strategies & Criteria Correct Answer - Risk Profile,
Property Type, Transaction Size, Geographic Focus, and Equity or Debt
Investment
Core/Core Plus Strategies Correct Answer - Conservative Risk Profile
Opportunistic/Value Add Strategies Correct Answer - High Risk High
Return
Multifamily Properties Correct Answer - Buildings containing 5 or more
rental units.
Are multifamily properties risky? Correct Answer - No, they are the least
risky.
What is important to consider for office properties? Correct Answer - A
tenant's credit quality.
What is the least favored real estate asset class? Correct Answer - Retail
property types due to the rise of e-commerce.
What is the most favored real estate asset class? Correct Answer -
Industrial property types due to the rise of e-commerce.
What is the least operationally intensive real estate asset class? Correct
Answer - Industrial
, What is the most risky real estate asset class? Correct Answer -
Hospitality because it caters to travelers and tourists, so it is correlated with
the broader economy.
Cap Rate Correct Answer - The rate of return on a real estate investment
property based on the income that the property is expected to generate.
Cap Rate Formula Correct Answer - Net Operating Income / Purchase
Price
Appraisal Correct Answer - An estimate of the current value of the
property.
Funds From Operations (FFO) Correct Answer - Net (accounting)
income, plus tax depreciation, plus amortization of leasing commissions and
tenant improvements.
Internal Rate of Return ("Cash on Cash" Return) Correct Answer -
Percentage of interest earned on each dollar invested in a property over the
entire holding period.
Zoning Variance Correct Answer - An exception to the zoning ordinance
applied to a particular piece of property.
Easement Correct Answer - The right to use the land of another for a
particular purpose.
Rent Control Correct Answer - A price ceiling placed on rent.
Tax Assessment Correct Answer - In reference to property taxes, the
amount which must be paid; it is based on the property's assessed value.
Triple Net Lease (NNN) Correct Answer - A lease structure, most
common in retail properties, in which the tenant pays all operating (and
frequently capital) costs, including insurance, utilities, and property taxes in
addition to the contractual base rent and escalations.
Gross Lease Correct Answer - A lease of property according to which a
landlord pays all property charges regularly incurred through ownership,
