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What must the revenues be

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Reference no: EM133047411

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Q1. For a NNN leased property, the annual rent is $6 per SF. The gross area of the property is 180,000 SF and the building has an 85% efficiency ratio. Usable and rentable areas in the building are equal. There is no additional income or expenses. The property has a mortgage with annual debt service of $150,000. If the structural vacancy rate were 7%, "A" would like to calculate what are the Added Margin and the Break-even Occupancy respectively?

(a) 78.4% and 23.2% respectively

(b) 93.0% and 7.0% respectively

(c) 76.7% and 16.3% respectively

(d) 83.7% and 23.3% respectively

Q2. A's broker has brought an off-market real estate investment deal to his attention. The broker informs "A" that he can expect at least 13% annual cash-on-cash yield and 7% in annual capital appreciation from this investment. "B" would like to know what is A's expected return from this investment?

(a) 6.0% (b) 20.0% (c) 15.0% (d) 17.5%

Q3. In question 31 above, if the inflation rate is 4%, "B" would like to know what is A's expected annual real return from the investment?

(a) 15.0% (b) 20.0% (c) 16.0% (d) 12.0%

Q4. If the debt service coverage ratio (DSCR) is 1.25x, annual debt service and operating cost is $400,000, what must the Revenues be?

(a) $524,000 (b) $544,000 (c) $556,250 (d) $564,000

Q5. "A" buys a property for $3 million and sells it 8 years down the road for $6 million. Ignore any income received during the 7-year holding period. What is the cumulative annual growth rate (CAGR) of the property's value?

(a) 5.57% (b) 9.05% (c) 15.73% (d) 25.50%

Q6. In determining the value of a property, a cap rate of 8.0% implies that the property can be sold at hollowing multiple of its NOI:

(a) 12.5x (b) 14.0x (c) 16.5x (d) 18.0x

Q7. "A" states that she intends to develop a green-field investment property to 11 cap and the sell it at 6.5 cap. What is A's gross development profit margin (rounded to the nearest percent).

(a) 69.2% (b) 55.5% (c) 49.9% (d) 40.0%

Reference no: EM133047411

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