End of Chapter 24 Questions and Answers

End of Chapter 24 Questions and Answers - End of Chapter 24...

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End of Chapter 24 Questions and Answers 1. Suggested Assignment: To become better at thinking about how everything affects real estate, watch the local news one evening and take notes on the stories. Other than the stories about weather, fires, car crashes, and crime list out the first three local news items about people, businesses, or any general subject. For each of these three stories try and answer the question: How do the trends or factors discussed affect local demand or supply in the real estate market? It may be a stretch, but see if you can make the connections. Discuss the results with your instructor. Answer: A great example might be the 9/11 attack on the World Trade Center. This has affected how we think about managing security, insurance costs and coverage, power back up, redundant servers and data back up for tenants, and much more. Trophy famous buildings have probably lost some tenants and certainly have seen the prestige decline along with rent levels. What else has terrorism done that affects how we live and work? 2. What are the major components of a feasibility analysis? Describe each. Answer: Overall goals, objectives and alternatives go into the management plan than considers four components: 1) Market and competitive analysis where we look for market demand (source of success) and sources of competition. 2) Physical and design analysis where we examine design alternatives, site analysis, engineering and initiate cost studies. 3) Financial analysis where we consider financial feasibility relative to risk/return goals. 4) Political legal analysis where we consider environmental and other land use regulations, building codes, ADA, zoning, NIMBYs and the possibility of concept approval and scale. 3. Who are the major players influencing the success of a development project? Answer: Tenants, lenders, architects, engineers, NIMBYs, land use regulators, contractors, lawyers, leasing agents, property managers, investors. 4. Describe a proactive strategy for dealing with NIMBYs? Answer: Pro-active communication is critical along with the willingness to listen and modify designs early on in the process. 5. Describe why the success of a competitor may be a good sign? Answer: It is an indirect indication of demand.
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6. Describe what it might mean if a competitor is not doing well? Answer: It may mean there is not enough demand or it could mean they made a major mistake such as a bad tenant mix, or poor access or a poor design. If you can spot the mistake then there may still be a market for the concept. If you can’t spot the mistake then it may mean a lack of demand. 7. Why might a landlord be concerned about e-commerce sales channeled through a computer kiosk on the premises of a retailer tenant? Answer:
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End of Chapter 24 Questions and Answers - End of Chapter 24...

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