[REE 3043] - Midterm Exam Guide - Ultimate 57 pages long Study Guide!

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REE 3043
MIDTERM EXAM
STUDY GUIDE
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Quick Facts & Terms
1
Chapter 1: The Nature of Real Estate Markets
QUICK FACTS
Two types of property
o Tangible
o Intangible
Real Estate can also be called
o Tangible Asset
o Bundle of Rights
o Industry of Profession
Characteristics of RE Markets
o Local User Markets
o Capital Markets
o Property Markets
o Government
Public Capital Markets vs. Private Capital/Property Markets
TERMS
Acre
o An important measure of land (43,560 sq. ft.)
Capital Markets
o The financial sector of the economy that serves to allocate financial resources
among households and firms requiring funds
Capitalization Rate
o The percentage that is obtained when the income produced by a property is
divided by the value or sale price of the property
Improvements on the land
o Include any fixed structures such as buildings, fences, walls, and decks
Improvements to the land
o Include components necessary to make the land suitable for building
construction or other uses
Institutional-grade real estate
o Larger more valuable commercial properties, generally well over $10 million,
targeted by institutional investors, such as pension funds and foreign investors
Intangible assets
o Nonphysical objects
Public trade
Many buyers and
sellers
Price available to
public
High liquidity
Private Trade
Whole assets
commonly traded at
once
High transaction costs
Less Liquidity
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Quick Facts & Terms
2
Investment-grade property
o Synonymous wit institutional grade real estate, large, relatively new and fully
leased commercial properties located in major metropolitan areas, generally
well over $10 million, targeted by institutional investors, such as pension funds
and foreign investors
Land
o Includes more than just the earth (i.e. improvements to the land
Personal Property
o Objects that are moveable and not permanently fixed to the land or structure,
including furniture and tenant fixtures that are often purchased in conjunction
with real property acquisitions
Property
o Anything that can be owned or possessed; tangible or intangible
Property Markets
o Determine the required property-specific investment returns, property values,
capitalization rates, and construction feasibility
Raw land
o Lad that does’t iclude structures or ay iproveets
Real estate
o the land and its permanent improvements
Real property
o Rights associated with ownership of land and all permanent attachments to land
Tangible assets
o Physical things
User Markets
o Potential occupants, both owner occupants and tenants, or renters competing
for physical location and space
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