WALL STREET PREP EVALUATION EXAM QUESTIONS
AND ANSWERS MARKED A+
✔✔Which of the following does not describe Tenant Improvements (TIs) - ✔✔The
improvements a tenant leaves behind after vacating their space
✔✔what is a fee paid to commercial real estate brokers for facilitating a lease transation
- ✔✔Leasing Commission
✔✔How is Total Lease Value Calculated - ✔✔square footage x rental rate x lease term
✔✔which of the following would not be considered Deferred Mantenance - ✔✔Gym
renovation
✔✔Which of the following would not be considered an Offensive Renovation -
✔✔parking garage repairs
✔✔what is a good rule of thumb for an acquisition hold period - ✔✔5 years
✔✔which of the following is not a common closing cost - ✔✔asset management fees
✔✔what is a good rule of thumb for an acquisition fee as a percentage of the purchase
price - ✔✔1%
✔✔what is the largest adjustment made in calculating reversion value for a commercial
property - ✔✔Forward Rent Abatements
✔✔what does unlevered cash flow (UCF) measure - ✔✔net ash inflows and outflows
before taking into account cash flows related to financing
✔✔why is t important to consider both unlevered and levered investment returns -
✔✔Because real estate is typically highly levered
✔✔tenant improvements are a function of what - ✔✔supply and demand
✔✔in which scenario does a landlord pay tenant improvement costs directly to the
tenant - ✔✔Tenant improvement allowance
✔✔when are apital expenditures included in operating expenses - ✔✔Never
✔✔what are capital reserves - ✔✔funds set aside from operating cash flow for future
capital improvements
, ✔✔Which of the following is typically the largest piece of the capital stack - ✔✔Senior
Debt
✔✔which of the following is the most risky position in the capital stack - ✔✔common
equity
✔✔which of the following typically has the right to foreclose on the equity position and
take control of the property - ✔✔Mezzanine Debt
✔✔which of the following is not a reason investors use leverage - ✔✔Reduce
investment returns
✔✔which of the following is not a common ratio used to measure the size of a loan -
✔✔Loan-to-income (LTI)
✔✔which of the following is not a method commonly used by lenders to calculate
interest - ✔✔31/365
✔✔which of the following is the most common method of interest calculation -
✔✔Actual/360
✔✔which of the following does not describe the Loan term - ✔✔the rate at which a loan
is made
✔✔what is amortization - ✔✔the process of spreading out a loan into a series of fixed
payments over time
✔✔what excel function is used to calculate the amortization payment amount -
✔✔=PMT
✔✔What does "IO" stand for - ✔✔interest only
✔✔what is the standard amortization period for a commercial real estate loan - ✔✔30
years
✔✔what is the pro of non=recourse loans - ✔✔limited personal liability
✔✔non-recourse loans are collateralized by what - ✔✔the property
✔✔which of the following metrics is not used to determine the maximum loan amount -
✔✔cash-on-cash
AND ANSWERS MARKED A+
✔✔Which of the following does not describe Tenant Improvements (TIs) - ✔✔The
improvements a tenant leaves behind after vacating their space
✔✔what is a fee paid to commercial real estate brokers for facilitating a lease transation
- ✔✔Leasing Commission
✔✔How is Total Lease Value Calculated - ✔✔square footage x rental rate x lease term
✔✔which of the following would not be considered Deferred Mantenance - ✔✔Gym
renovation
✔✔Which of the following would not be considered an Offensive Renovation -
✔✔parking garage repairs
✔✔what is a good rule of thumb for an acquisition hold period - ✔✔5 years
✔✔which of the following is not a common closing cost - ✔✔asset management fees
✔✔what is a good rule of thumb for an acquisition fee as a percentage of the purchase
price - ✔✔1%
✔✔what is the largest adjustment made in calculating reversion value for a commercial
property - ✔✔Forward Rent Abatements
✔✔what does unlevered cash flow (UCF) measure - ✔✔net ash inflows and outflows
before taking into account cash flows related to financing
✔✔why is t important to consider both unlevered and levered investment returns -
✔✔Because real estate is typically highly levered
✔✔tenant improvements are a function of what - ✔✔supply and demand
✔✔in which scenario does a landlord pay tenant improvement costs directly to the
tenant - ✔✔Tenant improvement allowance
✔✔when are apital expenditures included in operating expenses - ✔✔Never
✔✔what are capital reserves - ✔✔funds set aside from operating cash flow for future
capital improvements
, ✔✔Which of the following is typically the largest piece of the capital stack - ✔✔Senior
Debt
✔✔which of the following is the most risky position in the capital stack - ✔✔common
equity
✔✔which of the following typically has the right to foreclose on the equity position and
take control of the property - ✔✔Mezzanine Debt
✔✔which of the following is not a reason investors use leverage - ✔✔Reduce
investment returns
✔✔which of the following is not a common ratio used to measure the size of a loan -
✔✔Loan-to-income (LTI)
✔✔which of the following is not a method commonly used by lenders to calculate
interest - ✔✔31/365
✔✔which of the following is the most common method of interest calculation -
✔✔Actual/360
✔✔which of the following does not describe the Loan term - ✔✔the rate at which a loan
is made
✔✔what is amortization - ✔✔the process of spreading out a loan into a series of fixed
payments over time
✔✔what excel function is used to calculate the amortization payment amount -
✔✔=PMT
✔✔What does "IO" stand for - ✔✔interest only
✔✔what is the standard amortization period for a commercial real estate loan - ✔✔30
years
✔✔what is the pro of non=recourse loans - ✔✔limited personal liability
✔✔non-recourse loans are collateralized by what - ✔✔the property
✔✔which of the following metrics is not used to determine the maximum loan amount -
✔✔cash-on-cash
