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.
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
Discuss the results with your instructor.
A great example might be the 9/11 attack on the World Trade Center.
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.
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?
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
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?
Tenants, lenders, architects, engineers, NIMBYs, land use regulators,
contractors, lawyers, leasing agents, property managers, investors.
Describe a proactive strategy for dealing with NIMBYs?
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?
It is an indirect indication of demand.