Exam 1: Real Estate Space and Asset Markets

Long-run equilibrium in a DiPasquale-Wheaton "Four-Quadrant Model" 4QM) is found by:

Real estate space markets are segmented for all of the following reasons except:

Equilibrium between current supply and demand in the space market is reflected by:

Briefly describe about the following terms -the 'replacement cost' level of rent

In 2000 rents were $18/SF and 10 Million SF of space were occupied in a certain market. By 2006 12 Million SF of space were occupied, and rents were $19/SF, however, the CPI inflation) had increased more than 20 percent over this period. In this market, it appears that:

The "real estate system" consists of the following three major components:

If the cap rates prevailing in a given market are 10.5%, then how much would you expect a property to sell for in that market if its annual net income were $50,000?

The basic geographic unit in real estate space markets is typically:

The term "real property" refers to:

Briefly describe about the following terms -segmented market

The "kink point" in the real estate space supply function occurs at:

In the absence of foresight among asset market participants, a growth in demand for real estate assets in the capital market, holding demand in the space usage market constant, will produce which of the following short-run and long-run effects?

Other things being equal, which would have the lowest cap rate?

Briefly describe about the following terms -MSA

In order for the real estate system to function more efficiently and effectively, it is important for:

Which of the following is an example of the private equity market?

Which are the two fundamental markets in commercial real estate?

Use the following information to answer the next 2 questions. Suppose demand for apartments in a metropolitan area is: #Apt.units=60,000 +0.30)# households)-80)*$Rent/unit/mo.) -If developers increase the number of apartment units from 88,000 to 100,000, over a period of several years, to what level will real rent fall in the market below the original $400/mo level if the population remains stable at 200,000 households?

Use the following information to answer the next 2 questions. Suppose demand for apartments in a metropolitan area is: #Apt.units=60,000 +0.30)# households)-80)*$Rent/unit/mo.) -In the question above, suppose the number of apartment units remained at 88,000 while the number of households grew from 200,000 to 220,000. To what level would real rents rise?

If it costs $300/SF to develop a new class A office building and the annual net rent for office space is $22.5/SF, what is the cap rate that would make additional development feasible? Also, if office buildings are currently selling at an 8% cap rate, what would be the replacement cost rent level?