Real Estate Principles Study Set 1

Business

Quiz 17 :

Sources of Commercial Debt and Equity Capital

Quiz 17 :

Sources of Commercial Debt and Equity Capital

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Of the more than $3.6 trillion in outstanding U.S. commercial real estate debt, what percent is traded in public markets What percent is traded in private markets What institutions or entities are the long-term holders of private commercial real estate debt What is the fastest growing source of long-term commercial mortgage funds
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Approximately 29 percent of commercial real estate debt is traded in public markets and the remaining 71 percent is privately held by institutional and individual investors. Commercial banks, savings institutions, and life insurance companies are the long-term holders of private commercial real estate debt. At least until 2008, Commercial mortgage-backed securities (CMBSs) had been the fastest growing source of long-term mortgage funds.

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For what debt in a general partnership is each of the general partners liable
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General partners have unlimited liability and are liable for all debts of the partnership. This includes contractual debts and debts resulting from tort actions against the partnership. General partners are also jointly and severally liable for wrongful acts committed by other partners in the course of the partnership's business. Therefore, the personal assets of the general partners are subject to the claims of the partnership's creditors.

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Why are many pension funds reluctant to invest in commercial real estate
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Pension funds have historically viewed real estate as too risky, difficult to manage, and illiquid. Addtionally, the lack of available information for performing quantitative investment analysis has also contributed to the reluctance of pension funds to invest in real estate.

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There are two primary considerations that affect the form in which investors choose to hold commercial real estate. List each and explain how they affect the choice of ownership form.
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Which of these financial firms is the least likely to invest in a large, long-term mortgage loan on a shopping center
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Real estate syndicates traditionally have been legally organized most frequently as:
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What are the major restrictions that a REIT must meet on an ongoing basis in order to avoid taxation at the entity level
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Which of these loans is a life insurance company most likely to invest in
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Special allocations of income or loss are available if the form of ownership is a(n):
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Discuss the role life insurance companies play in financing commercial real estate.
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Which of the following forms of ownership involve both limited and unlimited liability
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Which of these lenders is most likely to provide a construction loan
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A real estate investment trust generally:
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Approximately 88 percent of core commercial real estate equity (on a value-weighted basis) is owned by "noninstitutional" investors. Who are these investors
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Which statement is false concerning the limited partnership form of ownership
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Explain what is meant by the double taxation of income.
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Double taxation is most likely to occur if the commercial properties are held in the form of a(n):
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Briefly describe a commingled fund. Who are the investors in these funds and why do these investors use commingled funds for their purchases
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With regard to double taxation, distributions, and the treatment of the losses, general partnerships are most like:
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Compare the tax advantages and disadvantages of holding income-producing property in the form of a REIT to the tax advantages and disadvantages of holding property in the form of a real estate limited partnership. Does either form of ownership dominate from a tax perspective
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