Term
| What are cluster home developments? |
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Definition
| owners share "green space" in outdoor areas |
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Term
| What are zero lot line developments? |
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Definition
| contain single and detached units |
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Term
| Multifamily hosuing is differentiated by... |
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Definition
- Location
- Size
- High rise
- Low rise
- Garden apartments
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Term
| Nonresidential properties are broken down into what major categories? |
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Definition
- Commercial
- Industrial
- Hotel/Motel
- Recreational
- Institutional
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Term
| What two things does market rent depend on? |
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Definition
| Economic Base and supply and demand |
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Term
| At any point in time, a fixed stock of space exists and will either be leased or... |
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Definition
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Term
| The price at which an owner can lease the space depends upon what? |
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Definition
| The market rental rate on comparable properties |
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Term
| As market rental rates rise.... |
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Definition
| more space is supplied by building owners |
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Term
| At lower rental rates will all space be leased? |
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Definition
| No...in hopes for higher rental rates or to convert it to a different use |
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Term
| As rental rates fall........ |
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Definition
| firms are more willing to use additional space in their opertaions ratherthan other factor inputs such as labor and capital |
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Term
| What would be an example of a change in the market for space? |
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Definition
| Demand for office soace increases because new firms are locating in the area |
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Term
| What does the amount of new space that is actually developed depend on? |
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Definition
| the profitability of developing new spaces as well as the supply of land for development |
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Term
| Will rents rise at the same rate in a world when new construction takes place as a world where construction is absent? |
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Definition
| Rental rates will rise more with the absense of construction |
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Term
| If more space is developed then needed, is it possible for rent to fall below where it was before? |
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Definition
| Yes if more space is developed then needed |
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Term
| A decrease in demand for space causes.... |
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Definition
| a reduction in the equilibrium market rental rate |
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Term
| The supply of space is ____ in the short run. |
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Definition
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Term
| Location is important, but location as viewed by ___________ is equally important? |
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Definition
| Location as viewed by user-tenants |
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Term
| Most real estate decisions made by business firms consider in terms of how leasing soace in alternative locations will generate more profit by... |
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Definition
- increasing sale revenue
- reducing cost of operations
- combo
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Term
| When will a location take on characteristics of a sub market? |
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Definition
| When firms cluster toward a location that has high sales revenues...Business with positive correlation to a good location will compete for these top spaces |
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Term
| The competition by different firms for space result in general land use results... |
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Definition
- Will result in highest rents possible for the most profitable locations, and ultimately the highest land value and best development for a site
- Businesses with similar revenue/operating expense structures will cluster
- Locations with greatest appeal will result in higher rents and highest spatial densities
- Some locations are competed for if the firms are cost sensitive....those requiring large amounts that want it for cheap
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Term
| For most business users, real estate is considered to be an .... |
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Definition
| operating input used with labor to produce output |
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Term
| Why do most tenants find leasing to be more cost effective than owning? |
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Definition
| when their space requirements are less than the quantity of space they would have to purchase in order to satisfy their needs in a desired location....also it would put the firm in the "real estate" business |
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Term
| Other reasons for leasing rather then owning. |
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Definition
- owning reduces operating flexibility
- must operate, mantain, and repair the facility
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Term
| If owning...what are the non core real estate functions a business would have to do... |
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Definition
- selecting the right tract and developing the right amount
- leasing to many different tenants
- Hiring personel, collecting rent, maintaining the facility
- finding financing
- research about the markets
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Term
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Definition
| the price that must be paid by a potential renant to use a particular type of space under then current market conditions |
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Term
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Definition
- Outlook for the national economy
- economic base of the are in which the property is located
- the demand for the type of space provided by the property
- the supply of similar competitive space
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Term
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Definition
| initial rent that must be paid under the lease contract |
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Term
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Definition
| stay flat for the term of the rent |
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Term
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Definition
| rent will increase at the end of specified time intervals and in specific amounts during the term of the lese |
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Term
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Definition
| use a specified index as a basis for adjustment |
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Term
| Rents adjusted based on performance |
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Definition
| determined by an indicator of retail sales performance...called a percentage rent lease |
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Term
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Definition
| money collected from tenants due to their expenses on the land |
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Term
| Gross (full service) leases |
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Definition
| tenant pays rent only and property owner provides all services and pays for all operating expenses |
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Term
| Modified (full service) leases |
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Definition
| Tenant pays rent and pays for individual, specified expenses identified in the lease such as electricity and the like |
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Term
| Leases with expense recoveries in excess of an expense stop |
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Definition
| Tenant pays rent plus a pro rata share of certain operating expenses incurred by the property owner |
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Term
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Definition
| Owner passes through all operating expenses |
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Term
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Definition
| owner passes through all operating expenses plus property taxes and insurance |
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Term
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Definition
| Operating expenses, taxes, insurance PLUS maintenance, repairs, and building operations |
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Term
| To calculate effetive rent.... |
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Definition
- Calculate the PV of the expected net rental stream. The net rental stream is the amount received after considering expenses that the owner must pay
- Calculate an equivalent level annuity over the term of the lease. An equivalent level annuity has the same PV as the original cash flow stream
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Term
| How is Rental Income calculated |
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Definition
| based on rents specified in each lease made with individual tenants |
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Term
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Definition
Rental Income
+Other Income
+Recoveries
-Vacancy and Collection Loss
-Concessions
__________________
Effective Gross Income
-Operating Expenses
___________________
Cash Flow from Operations(NOI)
-Lease Commissions
-Recurring Capital Outlays
-Nonrecurring Capital Outlays
___________________
Net Cash Flow |
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Term
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Definition
| inducements for new tenants to lease space or keep old tenants |
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Term
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Definition
| the net cash inflow from operating the property over a normal operating cycle |
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Term
Office space tends to be leased for
(Office Properties) |
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Definition
| three to seven year terms |
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Term
Owners may charge premium rent for space with the following features..
(Office Properties) |
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Definition
- Ground floor, transfer points, and space contigous to elevator banks
- Higher floors with unobstructed views
- Building corners
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Term
Rent discounts may apply to office space in the following locations
(Office Properties) |
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Definition
- Middle Floors and locations not adjacent to the elevator bank
- Offices with obstructed or undesirable views
- Noncontigous space occupied by one tenant...space on 2nd and 4th floor
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Term
In order to determine lease revenue...
(Office Properties) |
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Definition
| the base rent per sqaure foot of rentable area must be mulitplied by the quanitity leased to tenants |
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Term
Rentable area
(Office Properties) |
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Definition
the total area that could be rented to a single tenant user....total area on all floors and the lobby,
Does not include
- thinkness of exterior walls
- columns or protrusions
- equiptment closets
- basements etc
Does Include
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elevator landings
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lobbies
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restrooms
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Term
High load factors generally indicate..
(Office Properties) |
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Definition
| a low building efficiency...but it also means spacious areas if image conscious |
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Term
Leases for warehouse properties tend to be highly individualized due to the special purpose of the buildings..thus tenants prefer
(Warehouse Properties) |
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Definition
| long term leases ranging from 10-20 years |
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Term
Leases tend to be...
(Warehouse Properties) |
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Definition
- net
- net, net
- net, net, net
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Term
Rent premiums are added for the following featrues:
(Warehouse Properties) |
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Definition
- Located near entrances to industrial parks
- Located near freeways, interstate highways, or rail access
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Term
Rent discounts might be added for:
(Warehouse Properties) |
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Definition
- Poor ingress/egress
- Poor traffic circulation
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Term
CAM charges
(Warehouse Properties) |
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Definition
Common Area Maintenance
when industrial/warehouse are located in a large campus like development. |
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Term
Retail properties derive much of their value from....
(Retail Properties) |
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Definition
| ....the landlords ability to lease to a mix of tenants that attract shoppers |
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Term
One indicator of the success of a retail property is....
(Retail Properties) |
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Definition
| sales per square foot of rentable space and customer traffic counts |
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Term
Anchor Tenants
(Retail Properties) |
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Definition
| usually include very large department stores or other retailers that achieve very high sales volumes and generate a considerable amount of customer traffic....large discounts with demand lease features |
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Term
In-line tenants
(Retail Properties) |
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Definition
| smaller retailers that hope to generate retail sales as a result of participating in the high shopping traffic, part of which produced by the anchor tenants |
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Term
Length of in-line tenants
(Retail Properties) |
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Definition
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Term
Loss to lease
(Apartment Properties) |
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Definition
| represents the fact that leases on a number of units have been made in previous periods and are different from current rate |
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