CCIM 101 Test UPDATED ACTUAL Exam
Questions and CORRECT Answers
Major Decision Makers - Users - CORRECT ANSWER - Individuals who decide on the
space they require for business operations. Their decisions include selecting space based on
location, size, layout, building quality, and proximity to key suppliers or customers; considering
occupancy costs (leasing versus owning) and making acquisition, holding, and disposition
decisions (e.g., whether to invest in capital improvements, renegotiate leases, or sell property).
Acquisition Decisions (Users) - CORRECT ANSWER - Decisions regarding whether to
acquire space, what type/amount to acquire, where to acquire it, which specific space to choose,
how to structure the acquisition entity, and whether to lease or purchase, including the process
for doing so.
Holding Period Decisions (Users - Leased Space) - CORRECT ANSWER - Decisions
made during the lease period about capital expenditures (for property upgrades), changing the
capital structure, altering space utilization, continuing occupancy, exercising lease options,
renegotiating leases, or disposing of the space.
Holding Period Decisions (Users - Owned Space) - CORRECT ANSWER - Decisions
regarding discretionary capital expenditures, changes in capital structure or space utilization,
continued occupancy, or the sale/exchange of owned property.
Disposition Decisions (Users) - CORRECT ANSWER - Decisions on how to dispose of
property, including setting the price, choosing the method of disposition, and outlining the
disposition process.
Major Decision Makers - Investors - CORRECT ANSWER - Individuals or institutions
that invest in properties to lease to users. Their decisions focus on achieving a return (yield)
commensurate with risk and include acquisition, holding, and disposition decisions for
investment real estate (RE).
Acquisition Decisions (Investors) - CORRECT ANSWER - Decisions on whether to
acquire investment real estate, what type/when/where to acquire, which alternative to choose,
,how to finance the acquisition (debt and equity sources), the acquisition entity structure, and
determining acquisition price/terms.
Holding Period Decisions (Investors) - CORRECT ANSWER - Decisions during the
investment period such as making discretionary capital expenditures, adjusting financing or
operating strategies, changing property use or ownership entity, and deciding whether to hold or
sell the property.
Disposition Decisions (Investors) - CORRECT ANSWER - Decisions involving the
selling of investment real estate, including setting the disposition price, determining the
disposition method, and outlining the marketing process.
User as Investor - CORRECT ANSWER - Situations where a property user also owns the
property they occupy (e.g., a company with its own building or warehouse), thereby acting as
both decision maker and investor.
Real Estate (RE) as Part of the Capital Market - CORRECT ANSWER - RE is an asset
class—alongside stocks, bonds, and money market funds—where returns are influenced by
market rents, sale prices, and economic events. It is generally seen as less liquid but a good
inflation hedge and offers diversification benefits.
Capital Market Asset Classes - CORRECT ANSWER - The three major asset classes: -
Bond Market: Fixed-income securities for debt financing. - Stock Market: Equity financing with
volatile returns and limited liability. - Real Estate Market: Investment in properties and
associated rental income, which may be held directly or through vehicles like REITs;
performance can be tracked by indices such as NCREIF.
Leases vs. Market Rents in RE - CORRECT ANSWER - In RE investments, leases
function like bonds (fixed income) while market rents and property sale prices are similar to
stocks in terms of volatility and growth potential.
Opportunity Cost in RE - CORRECT ANSWER - The need to compare the benefits of
buying versus renting, considering alternative investments and the overall risk-return trade-off.
, Space Market versus Capital Market - CORRECT ANSWER - Capital Market:
Determines investment returns based on current market rents, supply and demand, and factors
like cap rates, which reflect investor yield expectations.
Space Market - CORRECT ANSWER - Consists of current and potential property users
whose demand is affected by economic growth, product/service demand, and employment
trends, which then influence market rents.
Interaction - CORRECT ANSWER - Market rent is set by the space market and impacts
investors' net operating income (NOI) and property valuation via cap rate calculations.
Cap Rate - CORRECT ANSWER - The rate investors are willing to pay per dollar of NOI.
It is calculated as Cap Rate = NOI ÷ Value and reflects both expected NOI growth and the risk
profile of the property. A higher cap rate implies higher potential ROI but greater risk, while a
lower cap rate suggests more stable NOI growth.
4 Quadrants of RE Investing - CORRECT ANSWER - A framework that categorizes RE
investments by the type of capital and investment vehicle.
Private Equity - CORRECT ANSWER - Direct asset ownership (purchasing property).
Public Equity - CORRECT ANSWER - Investing in securities like REIT shares.
Public Debt - CORRECT ANSWER - Investments from a lender's perspective, such as
CMBS or debt REITs.
Private Debt - CORRECT ANSWER - Investments through loans provided by entities like
commercial banks, pension funds, insurance companies, or individual lenders.
Sources of Debt and Equity Capital (for RE) - CORRECT ANSWER - Equity Sources:
Private investors, institutions (investment banks, mutual funds, pension funds), and public
Questions and CORRECT Answers
Major Decision Makers - Users - CORRECT ANSWER - Individuals who decide on the
space they require for business operations. Their decisions include selecting space based on
location, size, layout, building quality, and proximity to key suppliers or customers; considering
occupancy costs (leasing versus owning) and making acquisition, holding, and disposition
decisions (e.g., whether to invest in capital improvements, renegotiate leases, or sell property).
Acquisition Decisions (Users) - CORRECT ANSWER - Decisions regarding whether to
acquire space, what type/amount to acquire, where to acquire it, which specific space to choose,
how to structure the acquisition entity, and whether to lease or purchase, including the process
for doing so.
Holding Period Decisions (Users - Leased Space) - CORRECT ANSWER - Decisions
made during the lease period about capital expenditures (for property upgrades), changing the
capital structure, altering space utilization, continuing occupancy, exercising lease options,
renegotiating leases, or disposing of the space.
Holding Period Decisions (Users - Owned Space) - CORRECT ANSWER - Decisions
regarding discretionary capital expenditures, changes in capital structure or space utilization,
continued occupancy, or the sale/exchange of owned property.
Disposition Decisions (Users) - CORRECT ANSWER - Decisions on how to dispose of
property, including setting the price, choosing the method of disposition, and outlining the
disposition process.
Major Decision Makers - Investors - CORRECT ANSWER - Individuals or institutions
that invest in properties to lease to users. Their decisions focus on achieving a return (yield)
commensurate with risk and include acquisition, holding, and disposition decisions for
investment real estate (RE).
Acquisition Decisions (Investors) - CORRECT ANSWER - Decisions on whether to
acquire investment real estate, what type/when/where to acquire, which alternative to choose,
,how to finance the acquisition (debt and equity sources), the acquisition entity structure, and
determining acquisition price/terms.
Holding Period Decisions (Investors) - CORRECT ANSWER - Decisions during the
investment period such as making discretionary capital expenditures, adjusting financing or
operating strategies, changing property use or ownership entity, and deciding whether to hold or
sell the property.
Disposition Decisions (Investors) - CORRECT ANSWER - Decisions involving the
selling of investment real estate, including setting the disposition price, determining the
disposition method, and outlining the marketing process.
User as Investor - CORRECT ANSWER - Situations where a property user also owns the
property they occupy (e.g., a company with its own building or warehouse), thereby acting as
both decision maker and investor.
Real Estate (RE) as Part of the Capital Market - CORRECT ANSWER - RE is an asset
class—alongside stocks, bonds, and money market funds—where returns are influenced by
market rents, sale prices, and economic events. It is generally seen as less liquid but a good
inflation hedge and offers diversification benefits.
Capital Market Asset Classes - CORRECT ANSWER - The three major asset classes: -
Bond Market: Fixed-income securities for debt financing. - Stock Market: Equity financing with
volatile returns and limited liability. - Real Estate Market: Investment in properties and
associated rental income, which may be held directly or through vehicles like REITs;
performance can be tracked by indices such as NCREIF.
Leases vs. Market Rents in RE - CORRECT ANSWER - In RE investments, leases
function like bonds (fixed income) while market rents and property sale prices are similar to
stocks in terms of volatility and growth potential.
Opportunity Cost in RE - CORRECT ANSWER - The need to compare the benefits of
buying versus renting, considering alternative investments and the overall risk-return trade-off.
, Space Market versus Capital Market - CORRECT ANSWER - Capital Market:
Determines investment returns based on current market rents, supply and demand, and factors
like cap rates, which reflect investor yield expectations.
Space Market - CORRECT ANSWER - Consists of current and potential property users
whose demand is affected by economic growth, product/service demand, and employment
trends, which then influence market rents.
Interaction - CORRECT ANSWER - Market rent is set by the space market and impacts
investors' net operating income (NOI) and property valuation via cap rate calculations.
Cap Rate - CORRECT ANSWER - The rate investors are willing to pay per dollar of NOI.
It is calculated as Cap Rate = NOI ÷ Value and reflects both expected NOI growth and the risk
profile of the property. A higher cap rate implies higher potential ROI but greater risk, while a
lower cap rate suggests more stable NOI growth.
4 Quadrants of RE Investing - CORRECT ANSWER - A framework that categorizes RE
investments by the type of capital and investment vehicle.
Private Equity - CORRECT ANSWER - Direct asset ownership (purchasing property).
Public Equity - CORRECT ANSWER - Investing in securities like REIT shares.
Public Debt - CORRECT ANSWER - Investments from a lender's perspective, such as
CMBS or debt REITs.
Private Debt - CORRECT ANSWER - Investments through loans provided by entities like
commercial banks, pension funds, insurance companies, or individual lenders.
Sources of Debt and Equity Capital (for RE) - CORRECT ANSWER - Equity Sources:
Private investors, institutions (investment banks, mutual funds, pension funds), and public
