1.
Conduct an economic base analysis for the San Francisco
County, CA. First, calculate the location quotients (LQ) for this area relative
to US TOTAL based on 2-digit NAICS code (i.e., at sector level) in 2011 and
determine which industries are basic in the region (you can calculate LQ
through the BLS website <http://www.bls.gov/data/> ) Then, please briefly discuss your findings and the implications to the San Francisco commercial property market.
2.
Based on the 3 Urban Models ( Monocentric Model, Multicenter Model. and the Axial Model)
explain the growth and development pattern of the Orlando metropolitan area (or
another metropolitan area that you choose). In your opinion, which model can best
describe the development pattern of the metropolitan area? How does this
pattern influence the local real estate markets?
3.
Briefly describe the four quadrant model for real estate property and capital market. You should include graphs when discussing the main
idea of the model. Now, suppose the demand for real estate in the market increases.
As a result, the demand curve in the northeast quadrant shifts up. What will
happen to rent, asset price, construction and stock of real estate assets in the
new equilibrium? Please explain.
4.
Briefly answer each of the following questions
regarding the lease by lease analysis. Please include
the calculation or intermediate steps when necessary. [20 points]
a)
A tenant signs a lease and pays $12.50 per square foot
in base rent and pays operating expenses and real estate taxes estimated at
$8.25. This is generally referred to as
a gross lease?
True or False________ . Briefly explain.
b)
A tenant occupies 2,500 square feet and pays base rent of $29.00 per square foot. The tenant
took occupancy of the space in year 2000 and the base year stop was $5.25 per
square foot. For 2004 the landlord has
estimated operating expenses and real estate taxes to be $7.00 per square
foot. How much will the tenant pay in
base rent in 2004? ____________How much will the tenant pay for operating
expense & real estate tax recoveries in 2004? ____________. Assume no inflation.
c)
A retail tenant occupies 5,500 square feet in a 100,000
square foot shopping center. The lease calls for the tenant to pay a pro-rata share of common area maintenance expenses. In addition, an administrative fee of 15% should be paid (i.e., based
on the common area maintenance expenses that the tenant should pay). Common
area maintenance costs are estimated at $400,000. How much does the tenant pay in common area
maintenance and administrative fee on an annual basis? .
d)
A tenant signed a lease in July of 2001, requiring that
the tenant’s base rent of $10.00 per square foot would be increased on a fiscal
year basis based upon increases in the consumer price index. Assume that CPI will
be 3% per year, what should the tenant be paying in base rent on a rate per
square foot basis as of July 1, 2004?
e)
A retail tenant pays percentage rent of 3.0% over a
natural breakpoint based upon a rental rate of $10.00 per square foot. The tenant leases 4,000 square feet and is
estimated to generate $1,500,000 in sales for 2004. What is the tenant’s retail sales breakpoint
per square foot?____________. How much
will the tenant pay the landlord in percentage rent in addition to the base
rent of $10.00 per square foot? ________.
5.
According to an economic impact study conducted
by Tripp Umbach, the nation’s leader in economic impact analysis for academic
medical centers, the new College of Medicine at Florida International
University may generate 66,000 new jobs and have an annual economic impact of
more than $8.9 billion within 16 years. The college, which had its first class
in August 2009, already had an annual economic impact of more than $100 million
in South Florida. Recently, the President of FIU indicated that FIU would meet
with representatives from the Miami-Dade County Fair & Exposition, Inc. and
Miami-Dade County to explore the possibility of finding a new location for the
Fair so that FIU can expand into the location that currently is the fairgrounds
adjacent to the MMC (the FIU main campus).
In
light of these potential growth and development activities, suppose you have been hired by a developer/investor to conduct market analysis in the MMC area.
Specifically, you need to determine whether a new office, hotel, apartment or retail property should be built around FIU’s main campus area in the next 5-10 years. Assume
that most of the teaching and medical facilities of the College will be built around
the main campus area. This basic market analysis would serve as the starting
point for a more complete market research study. Please focus on defining
market and demand & supply analysis. Also, please outline potential
competition if there is any.
Note:
you should determine only one of the
property types that you believe is the most feasible/profitable development. Also,
the level of market analysis should be “Level B”, that is, present your
arguments with necessary statistical support and graphs (using data from Costar
and/or STDB, etc..) but no need for extensive interview or valuation analysis.
Please do not write your report more than 5 pages
