CRECI Market Analysis and Economics 4

Question 1

In a 'triple net' (NNN) lease structure, which party is responsible for taxes, insurance, and maintenance?

Accepted Answer

The tenant covers all three expenses

Answer

The landlord covers all three expenses

Answer

Expenses are split 50/50 between landlord and tenant

Answer

The property manager covers expenses from collected rents

Question 2

Which economic concept explains why land values are typically highest at a city's central business district?

Accepted Answer

Bid-rent theory, where businesses compete for proximity to the CBD

Answer

Economies of scale in construction

Answer

Zoning restrictions that limit suburban development

Answer

The multiplier effect of government investment

Question 3

A market study indicates that a submarket's average asking rent is $45/SF but effective rent (after concessions) is $38/SF. What is the 'concession spread' as a percentage of asking rent?

Accepted Answer

15.6%

Answer

7%

Answer

18.4%

Answer

83.3%

Question 4

Which of the following best describes 'shadow space' in commercial real estate market analysis?

Accepted Answer

Sublease space that tenants hold but do not actively market

Answer

Space in a building that is not visible from the street

Answer

Zoned but undeveloped land adjacent to existing commercial areas

Answer

Unrecorded lease agreements that bypass public disclosure

Question 5

The 'four quadrant model' (DiPasquale-Wheaton model) of real estate markets links which two markets?

Accepted Answer

Property (space) market and asset (capital) market

Answer

Debt markets and equity markets

Answer

Residential and commercial property markets

Answer

Local and national leasing markets

Question 6

When a market analyst observes that new construction starts have declined sharply while vacancy rates remain elevated, this pattern most likely indicates:

Accepted Answer

The market is likely to tighten as supply growth pauses while demand absorbs existing space

Answer

Developers expect rents to fall further

Answer

Lenders have stopped financing all commercial projects

Answer

Government regulations have permanently halted development

Question 7

What is 'economic base analysis' used for in commercial real estate market research?

Accepted Answer

Identifying industries that drive regional economic growth by exporting goods and services

Answer

Calculating a property's minimum acceptable sale price

Answer

Determining the base rent before escalations in a lease

Answer

Measuring the base land value excluding improvements