Commercial Real Estate - TACS 1 - Set 1
questions with answers.
Vacancy loss (V) ANS -Lost income associated with units that are not rented throughout the year.
Usable area: ANS -Space measured in square feet that a tenant occupies that includes private hallways,
private bathrooms, or private mechanical closets
Turnover rate: ANS -Ratio between the number of move-outs or units vacated to the total number of
units in a property measured over one-year period.
Trust: ANS -A legal arrangement to hold assets in trust and controlled by a trustee for the benefit of
another.
Tranche: ANS -To divide something such as a loan into different risk components.
Time value of money: ANS -Concept whereby the value of having a dollar today is higher than if
received in the future.
Terminal CAP rate: ANS -CAP rate at the end of the holding period.
Tenants in common (TIC): ANS -Common ownership interest created in a deed. Investors can hold real
estate with others in unequal interests which survive the death of the Texas REALTORS TACS 1:
Introduction to Commercial Real Estate ® 138 investor
Tenants: ANS -Individuals/entities that have a leasehold interest in the property for a period of time and
possess the right to its exclusive use.
Tenant representation: ANS -Specialty in commercial real estate where agents strictly work with tenants
to lease property.
, Tax liability: ANS -Taxes owed to the government on net income adjusted for mortgage interest and
depreciation.
Sponsors: ANS -Individual or company that represents the interests of real estate property owners in
the acquisition, management, and disposition of properties.
S-Corporations: ANS -Sub category of corporation limited to 100 shareholders with only one class of
stock. Protects shareholders from liability and may reduce selfemployment tax liabilities such as social
security and Medicare.
Reversion period: ANS -End of the holding period.
Reversion cash flow: ANS -:Refers to the cash proceeds or future cash benefits the owner will receive at
sale (after the holding period).
Revenue per available room (RevPar): ANS -: Industry standard for performance that offers a quick
assessment as to the hotel's ability to fill its rooms using the average daily room rate. It is found by
multiplying a hotel's average daily room rate by its occupancy rate.
Return on investment (ROI): ANS -Simple method used to evaluate efficiency, or how well an
investment performed after its costs.
Residential properties: ANS -Properties developed for living and personal enjoyment.
Reserve funds: ANS -Capital reserved for upgrades or replacements as a part of a longterm capital
budgeting plan for a property.
Replacement cost of rent: ANS -A measure for determining when new development can be profitable. If
the replacement cost is above the rents, new development will not be profitable. If the replacement
cost is below the rents, new development is warranted. If the replacement cost is equal to the rents, the
market is in equilibrium.
questions with answers.
Vacancy loss (V) ANS -Lost income associated with units that are not rented throughout the year.
Usable area: ANS -Space measured in square feet that a tenant occupies that includes private hallways,
private bathrooms, or private mechanical closets
Turnover rate: ANS -Ratio between the number of move-outs or units vacated to the total number of
units in a property measured over one-year period.
Trust: ANS -A legal arrangement to hold assets in trust and controlled by a trustee for the benefit of
another.
Tranche: ANS -To divide something such as a loan into different risk components.
Time value of money: ANS -Concept whereby the value of having a dollar today is higher than if
received in the future.
Terminal CAP rate: ANS -CAP rate at the end of the holding period.
Tenants in common (TIC): ANS -Common ownership interest created in a deed. Investors can hold real
estate with others in unequal interests which survive the death of the Texas REALTORS TACS 1:
Introduction to Commercial Real Estate ® 138 investor
Tenants: ANS -Individuals/entities that have a leasehold interest in the property for a period of time and
possess the right to its exclusive use.
Tenant representation: ANS -Specialty in commercial real estate where agents strictly work with tenants
to lease property.
, Tax liability: ANS -Taxes owed to the government on net income adjusted for mortgage interest and
depreciation.
Sponsors: ANS -Individual or company that represents the interests of real estate property owners in
the acquisition, management, and disposition of properties.
S-Corporations: ANS -Sub category of corporation limited to 100 shareholders with only one class of
stock. Protects shareholders from liability and may reduce selfemployment tax liabilities such as social
security and Medicare.
Reversion period: ANS -End of the holding period.
Reversion cash flow: ANS -:Refers to the cash proceeds or future cash benefits the owner will receive at
sale (after the holding period).
Revenue per available room (RevPar): ANS -: Industry standard for performance that offers a quick
assessment as to the hotel's ability to fill its rooms using the average daily room rate. It is found by
multiplying a hotel's average daily room rate by its occupancy rate.
Return on investment (ROI): ANS -Simple method used to evaluate efficiency, or how well an
investment performed after its costs.
Residential properties: ANS -Properties developed for living and personal enjoyment.
Reserve funds: ANS -Capital reserved for upgrades or replacements as a part of a longterm capital
budgeting plan for a property.
Replacement cost of rent: ANS -A measure for determining when new development can be profitable. If
the replacement cost is above the rents, new development will not be profitable. If the replacement
cost is below the rents, new development is warranted. If the replacement cost is equal to the rents, the
market is in equilibrium.
