Commercial Real Estate SAE - Champion's School of Real Estate 495 Questions with Verified Answers
Productivity Management - CORRECT ANSWER Measuring
... [Show More] the results from the use of available systems and tools for prospecting activities
CRM - CORRECT ANSWER Contact Relationship Manager, a tool used to automate prospecting tasks and manage leads
Geographic farming - CORRECT ANSWER A particular area that may include neighborhoods that a sales agent or broker markets for the solicitation of business
Management plan - CORRECT ANSWER A schedule of activities that creates the ability to measure accomplished tasks
_________ are an important way to offer a platform for advice and encouragement for agents - CORRECT ANSWER Business meetings
Incremental evaluation - CORRECT ANSWER Evaluations that take place at pre-determined intervals, such as monthly
ongoing evaluation - CORRECT ANSWER Takes place consistently throughout each week to help business owners monitor, assess, and analyze specific assets of their firms
preventative controls - CORRECT ANSWER A type of financial control through assignment of duties, authorization, and verification, and access to equipment, cash, and other assets
detective controls - CORRECT ANSWER A type of financial control that includes performance reviews, reconciliation of financial records, audits, inventories, and other investigative activities
business activity management - CORRECT ANSWER A process that can help brokerage owners to recognize, define, and analyze critical risks, and opportunities
data retention plan - CORRECT ANSWER A set of policies for handling sensitive information using protocols that meet federal, state, and local legal requirements
information management - CORRECT ANSWER Systems that allow businesses to collect, store, organize retain, and communicate information
lean management - CORRECT ANSWER The evaluation of a brokerage's structure to improve efficiency to maximize what it is that customers value about your business, always with an eye out for cost reduction
vertical expansion - CORRECT ANSWER Growth through adding specialty departments
horizontal expansion - CORRECT ANSWER Growth by enlarging the company through adding branch offices
organic growth - CORRECT ANSWER Referred to as true growth, involves expansion through the company's own resources such as energy, personnel, creativity, and reputation
inorganic growth - CORRECT ANSWER Growth by adding additional businesses from the outside to produce company growth
merger - CORRECT ANSWER Growth by bringing two or more companies together, combining their assets
acquisition - CORRECT ANSWER Growth through one company buying another company
venture capital - CORRECT ANSWER Investment from outside resources used to grow or start a company
mentor - CORRECT ANSWER An experienced agent who guides a newer agent through their first year of real estate
comprehensive database - CORRECT ANSWER A list of properties and property owners within a geographical region
time blocking - CORRECT ANSWER Separating periods of time for different activities
intermediary brokerage - CORRECT ANSWER Brokerages that will represent both parties in a transaction
caveat emptor - CORRECT ANSWER Let the buyer beware
fair housing - CORRECT ANSWER Federal, state, and local laws that ensure the public has unobstructed access to housing
CCIM - CORRECT ANSWER Certified Commercial Investment Member designation for commercial real estate agents who want to further their business practices through education and networking opportunities
IREM - CORRECT ANSWER Institute of Real Estate Management is an international community of real estate managers dedicated to ethical business practices, maximizing the value of investment real estate, and promoting superior management through education and information sharing
SIOR - CORRECT ANSWER Society of Industrial and Office Realtors is a professional organization that is affiliated with NAR
ICSC - CORRECT ANSWER International Council of Shopping Centers is designed to advance the shopping center industry and to promote its role in the commercial distribution of consumer goods and services
BOMA - CORRECT ANSWER Building Owners and Managers Association is an association of building owners, managers, developers, leasing professionals, corporate facility managers, asset managers, and providers of the products needed to operate commercial properties
NARPM - CORRECT ANSWER The National Association of Residential Property Managers is an organization of managers of single-family and small multifamily properties
diplomacy - CORRECT ANSWER The ability to handle clients and situations in a sensitive and effective way
Agent Jay procures a buyer for the owner of a convenience store in a high-crime urban area. There have been 3 robberies, a fatal stabbing, and fatal shooting on the property in the last two years. The fatal stabbing occurred in the parking lot, after hours. The fatal shooting occurred inside the establishment during a robbery, killing the store clerk. The suspects were never apprehended.
Jay knows the history of the property from watching the evening news. His buyer, however, lives in a different city, over 200 miles away.
Are the seller or Agent Jay obligated to disclose the murders that took place on the property to the seller? - CORRECT ANSWER No
T or F: The CCIM is the largest commercial real estate professional organization. - CORRECT ANSWER true
T or F: Federal Fair Housing laws apply to both residential and commercial real estate transactions. - CORRECT ANSWER false
T or F: Federal, state, and local fair housing laws ensure that only citizens have an unobstructed access to housing. - CORRECT ANSWER false
T or F: The Canons of Professional Ethics and Conduct include loyalty as an article. - CORRECT ANSWER false
T or F: The sale of a house is considered a good under the Deceptive Trade Practices and Consumer Protection Act. - CORRECT ANSWER true
T or F: The primary duty of a real estate agent is to represent the interests of his or her client. - CORRECT ANSWER true
T or F: The Consumer Protection Notice must be in a prominent location in each place of business the broker maintains. - CORRECT ANSWER true
T or F: Intermediary allows a broker to work with a seller client and a buyer customer in the same transaction. - CORRECT ANSWER false
T or F: Brokerage is not covered under the DTPA. - CORRECT ANSWER false
Agent Business Plan - CORRECT ANSWER create a budget
goal setting
daily plan: must-dos, should-dos, could-dos
3 categories of time - CORRECT ANSWER income-generating activities
support activities
personal time
The Canons of Professional Ethics and Conduct, part of TREC's Rules, include all of the following articles, except: - CORRECT ANSWER a. fidelity
b. competency
c. loyalty
d. consumer information
c. loyalty
Section 535.2 of the TREC Rules require brokers to - CORRECT ANSWER maintain written policies and procedures and advise a sponsored sales agents of the scope of authorized activities
Under the DTPA, _______________ are defined as tangible chattels. - CORRECT ANSWER goods
Commercial real estate is often defined as any real estate that is _____. - CORRECT ANSWER not residential in nature
Which of the following is a good reason for joining a big-name international commercial real estate firm? - CORRECT ANSWER a. no MLS
b. good mentorship program
c. the ability to keep your residential clients
d. all of these
b. good mentorship program
Which statement regarding commercial real estate is false - CORRECT ANSWER a. pocket listings are rare and can be viewed at unethical
b. it can take uo to 3 to 6 months for a deal to close
c. No TREC-promulgated forms exist
d. Attorneys are often involved in the transaction
a. pocket listings are rare and can be viewed as unethical
What do buyers and sellers look for in a commercial agent? - CORRECT ANSWER the ability to close deals
supply and demand - CORRECT ANSWER The primary determinants of real estate values
return on investment (ROI) - CORRECT ANSWER The primary factor motivating people to buy commercial real estate
office park - CORRECT ANSWER Located in suburban areas are commercial centers ranging in size from low-rise (1 to 2 stories) to mid-rises, but rarely over four to five stories. Also known as a business park
campus-style - CORRECT ANSWER Named due to their resemblance to university campuses, are commercial centers that are large and spread out over several acres of land, allowing for ample parking and not relying on foot traffic
rban-style - CORRECT ANSWER Commercial centers that are in busy, developed, geographical regions but still outside the central business district.
center business district (CBD) - CORRECT ANSWER Located within the heart of the city is home to banking, finance and mega insurance companies
low-rise - CORRECT ANSWER Commercial development that is less than 7 stories
mid-rise - CORRECT ANSWER Commercial development that is 7 to 25 stories
high-rise - CORRECT ANSWER Commercial development that is more than 25 stories
skyscraper - CORRECT ANSWER Supertall and mega-tall commercial buildings
multifamily - CORRECT ANSWER Residential living facilities ranging from duplexes to multi-story apartment complexes and buildings
walk-ups - CORRECT ANSWER A building with usually four to six stories without an elevator used for residential living
garden-style apartments - CORRECT ANSWER Low-rise clusters of buildings with access to the landscaped outdoor areas surrounding the structure
general purpose center - CORRECT ANSWER A category of shopping centers including neighborhood centers, strip centers, community centers, and regional/super-regional malls
specialized purpose center - CORRECT ANSWER A category of shopping centers including power centers, lifestyle centers, and factory outlets
limited purpose center - CORRECT ANSWER A category of shopping centers including airport retail centers
single-purpose industrial - CORRECT ANSWER Large home improvement chains and warehouse-type retailers that take up to 90% of the gross leasable area of a power center and are dominant in the market and kill the competition
speculative land - CORRECT ANSWER Land that will not be developed in the next 24 months
non-speculative land - CORRECT ANSWER Land that will be developed in the next 12 to 24 months
general purpose indstrial - CORRECT ANSWER Flexible spaces that can be adapted and configured for a variety of uses
single purpose industrial - CORRECT ANSWER Designed and purpose-built for one specific type of industry or company
Supply can be restricted by many factors, including: - CORRECT ANSWER zoning oridnances
commercial agents will typically work with one or more of the following property types - CORRECT ANSWER office
retail
raw land for development
special-use
multifamily and apartments
industrial
hospitality/leisure
Class A buildings - CORRECT ANSWER Class A buildings are usually recently developed properties in desirable, cosmopolitan areas that will attract sophisticated tenants.
Class A office buildings are typically going to be newer properties, with quality construction. These properties are located in areas with easy access to major thoroughfares, and will often be landmark buildings that are known by name across the city. Many will include on-site gyms and delis or convenience stores. Leasing space in these properties will be expensive for tenants but will provide them with a strong market presence.
Older buildings that have been renovated, painstakingly improved, and upgraded to include sought-after amenities can also carry an A classification in some markets.
Class B buildings - CORRECT ANSWER Class B buildings are generally older, yet well-maintained properties that are in good locations. These properties may have once commanded a Class A rating and clientele, but have fallen in status due to age and competition from newer, higher-end properties. The building finishes are adequate but lack the quality and polish of a Class A property.
Office buildings classified as Bs typically have good visibility from major arteries and some amenities, but owners cannot charge tenants premium rates. Building owners often renovate Class B buildings, creating outside seating, upgrading lobbies, elevators, and common areas to try to squeeze out an A rating to attract quality tenants.
Class C buildings - CORRECT ANSWER Class C buildings are usually older properties (20 years and up) that are maintained as functional properties for tenants and residents. These properties often need upgrades or facelifts. Rent is on the lower end, and there are not many amenities.
Office buildings typically do not go any lower than a C classification. Office space in Class C buildings can take a long time to lease as tenants interested in leasing in these properties often want to reduce overhead so they can use their money to put toward growing their businesses.
Class buildings - CORRECT ANSWER Class D buildings rank the lowest, and in many markets, these are buildings that display obvious signs of deferred maintenance. These are older buildings, usually more than 30 years, that have been neglected or have not been appropriately maintained, and are often not in prime or preferred locations. Rents are typically below market and it is challenging for landlords to attract good tenants.
Businesses that are not as address-conscious will typically choose to lease space in Class B or Class C buildings, depending upon their budget. Investors will often be interested in buying a Class C building, then renovating it to bring it up to today's basic standards. The idea behind this is to buy when the property is distressed at a high cap rate. Then put the money saved into rehabbing the property, and raise the rents. The investor will hold onto the property and sell it at a low cap rate in order to make money on the deal.
Class A multifamily - CORRECT ANSWER Class A multifamily properties will be new builds with granite countertops, garden tubs, higher-grade appliances, usually stainless steel, in each unit. The property will boast a luxurious clubhouse with a resort-style pool and a well-equipped gym. Often, these properties will have high-walkability scores, close to shopping districts and entertainment. The apartment owner can charge premium rental rates for these properties. These high-quality properties tend to have a lower cap rate because investors are not going to realize a high cash flow. Operating expenses are high as the properties have professional management companies and many amenities to maintain.
Class B multifamily - CORRECT ANSWER Class B multifamily properties will rent in the mid-range of the market and will be in desirable areas, but will not offer the amenities of a Class A property
Class C multifamily - CORRECT ANSWER Class C multifamily units are clean but might not have central a/c, depending instead on window units to cool the apartments. Appliances are older, yet functional, and kitchens and bathrooms are merely utilitarian. Class C properties offer a higher cap rate than As or Bs, and many investors are interested in buying C-quality properties in B-quality locations. After the investors purchase the properties, they clean them up so that they can raise the rents.
Class D multifamily - CORRECT ANSWER Class D multifamily properties are typically in economically depressed areas and often suffer from a great deal of deferred maintenance. These properties typically have higher cap rates because of the high risk involved. These properties will require a sizable investment for rehabilitation to bring them up to a higher standard.
Commercial agents will also be able to classify multifamily properties by their rents. Remember, rental markets are different in each area, but let's look at a basic example of rents for a 2-bedroom apartment in different locations spanning an urban area.
Lovely low-rise 63-unit property built in 1983 minutes away from the city, major freeways, and the airport. New roofs, floors, and appliances installed in the last year. Beautiful courtyard with relaxing pool and picnic area. All units are large and spacious, cable-ready and include A/C, ceiling fans, crown molding, and walk-in closets,. Property manager on site. Gross Rental Income is $550,000. Contact listing broker. - CORRECT ANSWER class c
Recently remodeled 6-unit income-producing property $399,999! Property is one story, built in 1960. All units are 800 sq.ft. and all are currently rented for $750 per month. New floors, newer roof, freshly painted...11.0% cap rate. - CORRECT ANSWER class d
Historic gem close to downtown entertainment district converted to residential loft units! Ground floor occupied by restaurant and bar space. Nine-story building built in 1910 contains 120 spacious residential lofts. Painted concrete floors, granite countertops, high-end appliances. Central a/c and elevator. Close to rail and major cross streets, this is a public transit rider's paradise! 100% occupied! - CORRECT ANSWER class b
Brand-new upscale development located at busy major intersection. Mid-rise building features state-of-the-art fitness center, beautiful sparkling resort-style pool, entertainment lounge with Wi-Fi café, business center, and outdoor lounge with fireplace and gas grills. Multi-level parking garage onsite. Variety of floor plans. Each residence includes: granite countertops, custom cabinetry, stainless steel Energy Star appliances, 10' ceilings, built-in wine racks, oversized soaking tubs and walk-in showers available in select units. Full-size washer and dryer in each unit. - CORRECT ANSWER class a
Super Champions Apartments is an 82-unit garden-style apartment community situated on 3.5 acres. Less than 10 miles from downtown, this two-story property was built in 1983, and has been well maintained. Beautifully landscaped with mature trees, this property includes a swimming pool, playground, and picnic area. Each unit includes a/c, ceiling fans, and balcony. Average occupancy is 100%, parking ratio 1.5/1,000 sq.ft. - CORRECT ANSWER class c
shopping centre design classifications - CORRECT ANSWER straight-line (strip)
L-shaped
U-shaped
T-shaped
cluster
triangle
dumbbell
double dumbbell
shopping center characteristics - CORRECT ANSWER neighborhood shopping centers
strip centers
community centers
regional malls
power centers
lifestyle centers
factory outlets
Business owners who require financing for special-purpose properties may apply through: - CORRECT ANSWER the small business administration
50/50 office/warehouse - CORRECT ANSWER This type of building is typically constructed out of heavy metal framing, complete with roller doors for easy loading and unloading of materials by large trucks and work vans. 50% of the space is air-conditioned office space; the other 50% is warehouse space. 50/50 warehouse/office spaces are perfect for companies involved in research and development, and small technology start-ups who need office space and work or lab space.
semi-dock - CORRECT ANSWER Semi-Dock buildings are ideal for companies that employ box trucks for the movement of goods. Semi-docks allow trucks to back in and unload dollies onto the floor of the building because the lip of the truck will match up with the floor of the loading bay, making them perfect for warehouse and storage facilities.
dock - CORRECT ANSWER Dock buildings are designed with the right door height and width for larger, semi-trucks and heavy moving equipment like forklifts and mobile cranes. Only 10 to 15% of the building serves as air-conditioned office space with the majority of the square footage allotted for large pallets of merchandise loaded and unloaded through multiple loading bays equipped with roller doors. There is usually a glass-walled office space with a view of the loading bays, from which a floor manager can supervise operations from all directions with an eye for safety. The loading docks are not flush with the back of the trucks. Instead, they slope downward, allowing for the truck to be backed in and unloaded or loaded by a forklift or crane.
Large online retailers that need space in strategic locations are called: - CORRECT ANSWER fulfilment centers
_______________ are larger than a strip or neighborhood center and are typically anchored by supermarkets, large drugstore chains, or discount stores. - CORRECT ANSWER community centers
Information resource: The Council on Tall Buildings and Urban Habitat (CTBUH) - CORRECT ANSWER Founded in 1969 at Lehigh University in Bethlehem, Pennsylvania, CTBUH's website is an excellent resource to read about the latest supertall and megatall building projects around the world. You can search the Tall and Urban Database, watch video interviews with builders and architects, and read about how the definition of a tall building has changed throughout history.
REDNews - CORRECT ANSWER The REDNews is a popular publication written specifically for commercial real estate in Texas. REDNews is an invaluable source for news, information, and listings for commercial agents and brokers across the state. Subscribe to their print publication or visit the REDNews website.
_________ affects the supply of real estate in the US - CORRECT ANSWER economics, land costs, taxation
What is the primary motivating factor for purchasing commercial real estate? - CORRECT ANSWER return on investment
What type of building would you most likely find in the suburbs? - CORRECT ANSWER office parks
property management - CORRECT ANSWER An employee or general agent of the owner who has a broad scope of responsibilities including protecting and preserving the property of the owner while generating an income for the owner.
management agreement - CORRECT ANSWER The property manager's employment contract that establishes the roles and responsibilities of the property manager and the property owner
cash flow report - CORRECT ANSWER Shows all cash that was received and all the expenses incurred by the property during the reporting period
operating statement - CORRECT ANSWER A report that gives the landlord a picture of the financial health of the property
profit and loss statement - CORRECT ANSWER An account of all revenues and expenses a company has generated during a specific timeframe
occupancy report - CORRECT ANSWER An analysis of occupied and vacant space to total space during a specific time period
maintenance report - CORRECT ANSWER An account of all maintenance completed during a specific period of time
preventative maintenance - CORRECT ANSWER Regular servicing of equipment to prevent breakdown
deferred maintenance - CORRECT ANSWER The accumulation of needed maintenance over time
individual property manager - CORRECT ANSWER An employee of the owner who is not required in the state of Texas to have a real estate license that manages a specific complex like an on-site manager
Licensed property manager - CORRECT ANSWER Licensed real estate agents who work for a property management firm or a licensed broker who offers property management services
residential property manager - CORRECT ANSWER A property manager who may live on the property that they manage and may be employed by the individual owner or by a property management firm
single-family homes
vacation rentals
manufactured-home parks
multifamily housing
VAMA - CORRECT ANSWER Voluntary Affirmative Marketing Agreement is a contract that is negotiated between HUD and national associations that represent the housing industry
reasonable accommodation - CORRECT ANSWER A change to a rule, policy, or practice, or service for a disabled person to use housing
service animals - CORRECT ANSWER A specially trained canine or miniature horse that works with a disabled individual providing a service to their human companions
therapy animals - CORRECT ANSWER An animal that provides support to individuals with physical, cognitive, emotional and/or social issues and does not live with the individual but visits the individual for sessions
emotional support animals - CORRECT ANSWER An animal that provides emotional and companionship for an individual prescribed as part of a medical treatment plan
ADA - CORRECT ANSWER Americans With Disabilities Act is a federal law that prohibits discrimination against those with disabilities by denying them the full and equal enjoyment of goods, facilities, accommodations, services and privileges
Texas Property Code - CORRECT ANSWER Texas Statute Law that is formatted and numbered into fifteen titles addressing property in Texas
USGBC - CORRECT ANSWER United States Green Building Council is a membership-based non-profit organization that promotes sustainability in the way that buildings are designed, built, and operated
LEED - CORRECT ANSWER Leadership in Energy and Environmental Design is a voluntary rating and certificate system geared toward increasing the environmental and health performance of structures and neighborhoods
One trend a manager should follow in the marketplace: - CORRECT ANSWER vacancy rates
________ causes a downward spiral in rental rates. - CORRECT ANSWER deferred maintenance
The property manager must understand federal, state, and local laws that affect property management, including: - CORRECT ANSWER federal, state, and local housing laws
americans and disabilities act
building and fire codes
etc.
No one may take any of the following actions based on race, color, national origin, religion, sex, familial status, or handicap in the sale or rental of housing - CORRECT ANSWER refuse to rent or sell housing
refuse to negotiate for housing
making housing unavailable
deny availability of a dwelling
set different terms, conditions, or privileges for sale or rental of a dwelling
provide different housing services or facilities
falsely deny that housing is available for inspection, sale, or rental
for profit, persuade owners to sell or rent (blockbusting)
deny anyone access to membership in a facility or service (such as MLS) related to the sale or rental of housing
Does advertising a property at 'walking distance' violate fair housing laws? - CORRECT ANSWER yes, it is assuming someone can walk therefore unintentionally discriminating against ADA
What are the ADA violation penalties? - CORRECT ANSWER Penalties for violation of the act are up to $75,000 for the first violation and up to $150,000 for subsequent violations.
often canine in nature - CORRECT ANSWER service animals
emotional support animals
not therapy animals
specifically defined as dogs by ADA - CORRECT ANSWER service animals
covered by the ADA as service animals - CORRECT ANSWER service animals
Places of worship are not required to allow individuals to bring them inside - CORRECT ANSWER service animals
emotional support animals
therapy animals
provide companionship help with depression and anxiety - CORRECT ANSWER emotional support animals
therapy animals
provide individuals with therapeutic contact, often in a clinical setting in order to improve their emotional, social, or cognitive function - CORRECT ANSWER therapy animals
may live with a disabled individual - CORRECT ANSWER service animals
emotional support animals
ADA provides the right to being the animal into a public place - CORRECT ANSWER service animals
must be vaccinated according to state and local laws - CORRECT ANSWER service animals
emotional support animals
therapy animals
Texas Property Code - CORRECT ANSWER The Texas Property Code arranges Texas Statute Law into a logical order, making it more accessible and understandable. Each statute is formatted and numbered, enabling easy citation of the law. There are fifteen titles included in the property code. Most important to property managers and landlords is Title 8, Landlord and Tenant, Chapters 91-93.
Property Code - Title 8 and Tenant Chapter 93. Commercial tenancies - CORRECT ANSWER This chapter applies only to the relationship between landlords and tenants of commercial rental property.
Property Management Certifications and Designation - CORRECT ANSWER Certified Property Manager (CPM)
Accredited Residential Manager (ARM)
Accredited Commercial Manager (ACoM)
Accredited Management Organization (AMO)
Certified Sustainable Property Program (CSP)
Certified Property Manager (CPM) - CORRECT ANSWER Certified Property Manager (CPM) is the premier accreditation that is ideal for asset managers and managers of large multifamily, office, retail, or industrial properties. The CPM process includes seven courses, letters of recommendation, and a comprehensive examination. A fast track option is available for those candidates who have specific real estate designations, a real estate degree, or significant experience. IREM requires CPMs to be affiliated with the NAR.
Accredited Residential Manager (ARM) - CORRECT ANSWER Accredited Residential Manager (ARM) is a designation for residential property managers that demonstrates to the industry that the individual is knowledgeable, ethical, and reliable. Individuals must complete coursework, including courses on managing maintenance operations and property risk, and marketing and leasing strategies for multifamily properties among others. An examination is required to obtain the certification. [Show Less]