Need soltuions for the multiple choices below.. 1. All things being otherwise co

Question

Need soltuions for the multiple choices below..

1. All things being otherwise constant, rents tend to rise when:

A. Vacancy rates are also rising

B. Net absorption is positive

C. Construction costs rise

D. All of the above

E. None of the above

2. Conditions near the cyclical bottom of the occupancy market are characterized by:

(select all that apply)

A. Low or no new construction

B. Lower vacancy rates than historical norms

C. Rents below the level needed to justify new construction

D. Compressing cap rates

3. Conditions near the cyclical peak in the real estate capital market are characterized by:

(select all that apply)

A. Spreads between cap rates and Treasury yields at historically narrow levels

B. Cap rates at historically low levels

C. Low or no new construction

D. High levels of transactional activity, relative to historical norms

4. Historically high investment returns are guaranteed when:

A. An investment is made when occupancy markets are near bottom

B. An investment is made when capital markets are near bottom

C. An investment is made when absorption turns positive

D. An investment is made when rents start to rise

E. None of the above

5. Recommendations to investment committees are improved by

(select all that apply):

A. Dividing work within a deal team to maximize efficiency

B. Including all available reports from reputable market sources

C. Presenting coherent logic between the market trends analysis, the financial projections assumptions and the investment recommendations

D. Presenting value recommendations based on the average price of recent comparable sales

E. Forecasting cash flows based on the lower of market or contract rents under existing leases

Explanation / Answer

question 1:

The rent would increase if all the above raises hence the option is D because if there is increase in construction or vacancy rate will automatically increase the rent fare to increase .

question 2:

Option A because if the cyclical bottom hits that means there is no such good demand in the amrket about the real estate prices and hence it would turn out to be a low or no new construction .

question 3:

option D is the correct answer becasue it act as a vice versa when there is a cyclical high that means there is a high transactional activity.

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