Exam 17: Sources of Commercial Debt and Equity Capital

At the end of 2011,commercial banks and other financial institutions collectively owned $51 billion in commercial real estate equity.The vast majority of these holding are the result of which of the following types of investment by these institutions?

Given the following information,calculate the price-FFO multiple for the following REIT.Funds from Operation: $4,000,000;Stock Price: $40;Shares Outstanding: 1,000,000

Since most real estate assets are depreciable,using accounting income to measure a REIT's cash flow may actually understate the funds that are available to distribute to investors as dividends.Therefore,REITs utilize a measure that adds back depreciation and amortization expenses,more commonly referred to as:

In most small to medium private real estate deals,syndicators play important roles within the origination,operation,and completion phases of a real estate syndicate's life.All of the following are responsibilities of the syndicator in the operation phase of a syndicate's life EXCEPT:

Direct investment in private commercial real estate markets is a preferred means of ownership for the largest institutional market participants.Which of the following types of institutions rely on stable income from commercial real estate properties to pay out retirement benefits?

If the per share stock price of a REIT is greater than its per share net asset value (NAV),the REIT is said to be selling at:

Section 1031 of the Internal Revenue Code permits investors to defer some or all of the taxable gain that would ordinarily be due on the sale of a property if they exchange for "like-kind" property.In order to avoid income taxes,many investors attempted to make use of this tax code when disposing of commercial real estate assets.This led to the reemergence of which of the following forms of ownership in commercial real estate?

As of 2011,nearly 88% of private commercial real estate equity was owned by "noninstitutional investors." Which of the following investor categories represents the most common form of noninstitutional ownership?

The $6.5 trillion total market value of commercial real estate can be broken into four quadrants.Which of the following sectors of the commercial real estate market currently accounts for the largest proportion of market value?

There are a set of restrictive conditions that REITs must satisfy on an ongoing basis in order to maintain their special tax status.All of the following statements regarding the main restrictions are true EXCEPT:

Given the following information,calculate the price-FFO multiple for the following REIT.Net income: $1,200,000,Gain/losses from infrequent and unusual events: $0,Amortization of tenant improvements: $120,000,Amortization of leasing expenses: $75,000,Depreciation (real property): $2,675,000.Stock Price: $40;Market Capitalization: $40,000,000

All of the following are responsibilities of the syndicator in the origination phase of a syndicate's life EXCEPT:

Ownership forms for pooled equity investment can differ in terms of how the entity's cash flows are distributed to its investors.Which of the following ownership structures requires cash flows to be allocated to each shareholder in proportion to his or her ownership of the entity,thereby preventing special allocations to multiple classes of investors?