HW Problem Solution - Chapter 5 Market Determinants of...

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1 Chapter 5 Market Determinants of Value Study Questions 1. List five major economic base activities for your city of residence. Solution : Is MSA specific. 2. Identify at least five locational attributes that are important in the location of a fast-food restaurant. Compare notes with someone in the industry such as a local restaurant manager or owner. Solution : Likely locational requirements for a fast-food restaurant could include these: visability, high traffic counts, easy entry and exit from the site, good proximity to households or places of work, and a location that affords a “locational monopoly” in that a competitor cannot “intercept” the available market.
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2 CHAPTER 6 Forecasting Ownership Benefit and Value: Market Research Study Questions 1. On the U.S. Census web site, use the approach shown in Explore the Web, Chapter 5, to access the latest American Community Survey. For your county, find the distribution of reported house values for owner occupied residences. Solution : Is county specific. Below is an example result for Alachua County, Florida Owner Occupied Housing Values 0 1000 2000 3000 4000 5000 6000 Le s s than $ 10 , 000 $15,000 to $19,999 $2 5, 00 0 t o $ 29,999 $35,0 0 0 t o $39,999 $5 0, 00 0 to $ 59,999 $70,0 0 0 t o $7 9, 99 9 $90,000 to $99,999 $1 25,000 to $14 9, 99 9 $17 5, 00 0 to $199 , 99 9 $250,000 to $299,999 $4 00,000 t o $499 , 99 9 $750,000 to $999,999 Value Frequency 2. If you were looking for an apartment at this time, what are six non-locational requirements that you would consider important? Solution: Six non-locational requirements include an appealing floor plan and layout, community amenities, security features, desirable tenant mix, adequate parking, and construction quality. 3. University City is a town of more than 200,000 persons, with over 50,000 university and community college students. It has over 30,000 apartment units which, with one or two exceptions, are garden apartments with a maximum of three floors. Except for buildings within or immediately adjacent to the university medical center, the football stadium, and the two graduate student dorms, only two other buildings in the University City exceed five floors. A developer proposes to introduce two 24-story apartment buildings halfway between the downtown and the university, which are about 2.5 miles apart. One tower, would be targeted to undergraduate students and the other to graduate students. The downtown consists of little more than government offices, mostly local and
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3 county. What questions should the developer ask in order to create a “market defining story” for the twin towers? Solution : This story needs to answer the following questions: 1. What is the real estate product under consideration? 2. Who are the customers (target market)? 3. Where are the customers? (What is the market area?) 4. What do the customers care about? (What aspects of the product?) 5. Who are the competitors?
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4 CHAPTER 23 DEVELOPMENT: THE DYNAMICS OF CREATING VALUE Study Questions 1. Why is the permitting stage of development often the riskiest stage of the process?
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