Commercial Real Estate Exam #1 questions with answers

Commercial Real Estate Exam #1 questions |\ |\ |\ |\ |\ |\




with answers |\




Why is Real Estate important - CORRECT ANSWERS ✔✔it is the
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single largest component of wealth
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Space Markets (use & rents) - CORRECT ANSWERS ✔✔the right to
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use real property. landlords & tenants exchange money.
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determines the price and that varies due to segmented market |\ |\ |\ |\ |\ |\ |\ |\ |\ |\



and immobility. |\




Property & Capital Market (ownership, risk returns, and value) -
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CORRECT ANSWERS ✔✔the ownership of real property. determine
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the value which should be the same everywhere. this is because
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capital is mobile and fungible. |\ |\ |\ |\




3 uses of the term real estate - CORRECT ANSWERS ✔✔1. real
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property |\




2. bundle of rights
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3. industry and profession
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Cap rates - CORRECT ANSWERS ✔✔higher = cheaper
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lower = expensive |\ |\




driven by risk and growth expectations
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, Rights - CORRECT ANSWERS ✔✔claims the gov't is obligated to
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enforce, non-revocable, enduring |\ |\




Property Rights - CORRECT ANSWERS ✔✔exclusive possession,
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enjoyment of use (use, collect rent, harvest) |\ |\ |\ |\ |\ |\




Freedom to dispose and alter (sell, convert, rebuild)
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includes rights to ground and air |\ |\ |\ |\ |\




Real Prperty - CORRECT ANSWERS ✔✔land and its permanent
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structures


Fixtures - CORRECT ANSWERS ✔✔personal property that has been
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converted into real property. manner of attachment or damage
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done if removed |\ |\




ex: custom cabinets
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Estates - CORRECT ANSWERS ✔✔real property interest with
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exclusive possession |\




ex: leasehold & freehold
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Estates-Leasehold - CORRECT ANSWERS ✔✔tenancy for years ( |\ |\ |\ |\ |\ |\ |\ |\



specific time period w/ written lease)
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Periodic tenancy (no definite time period, oral agreement usually)
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Estates-Freehold - CORRECT ANSWERS ✔✔free simple absolute |\ |\ |\ |\ |\ |\ |\



has all rights- most complete bundle
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