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- Question 1 of 10
1. Question
If you buy a property at a 6% cap with 50% leverage at 4%, what is the equity yield?
CorrectIncorrect - Question 2 of 10
2. Question
You sell a property for $21,000,000. It had a tax basis of $18,500,000 (this may also be referred to as the net book value, which includes all depreciation up to the date of the offer). You are considering buying a property that is $20,000,000. Could you use a 1031 exchange, and if so, how much gain could you defer?
CorrectIncorrect - Question 3 of 10
3. Question
Your firm is considering selling a building for $25,000,000. That property has a tax basis of $20,000,000. Your firm plans to sell the building and exchange the gains into another project, a redevelopment of an office building inside an Opportunity Zone for a single tenant on a 15-year NNN lease. The new project will cost approximately $40,000,000. If you model a sale at year 10 of the redeveloped office building at $45,000,000, what will be the taxable gain? (Assume 39-yr straight-line depreciation on the redeveloped building)
CorrectIncorrect - Question 4 of 10
4. Question
A CMBS (Commercial Mortgage Backed Securities) issuance has two tranches. What does it mean to be the “B” piece?
CorrectIncorrect - Question 5 of 10
5. Question
A real estate development project you are modeling includes a construction loan. The construction contract will include a 10% retainage provision. When modeling the monthly draws, would the following statement be true or false?
“Don’t worry about the retainage in the model- just input the equity or loan advance amount needed to pay the net draw amount.”
CorrectIncorrect - Question 6 of 10
6. Question
You are modeling a multi-family property utilizing 60% leverage. You have been instructed to complete a 10-year model, but to use permanent financing with only a five-year fixed rate term. How should you model the financing on the remaining five years?
CorrectIncorrect - Question 7 of 10
7. Question
What is the IRR to the Limited Partners under the following scenario?
- Waterfall is defined as: 9% pref, 75/25 to a 12%, then 50/50
- LP investment of $1,000,000
- Zero cash distributed during hold period
- Two year hold period
- $1,450,000 available cash for distribution
The IRR to the LPs is
CorrectIncorrect - Question 8 of 10
8. Question
What is the cash distributed to the General Partner under the following scenario?
- Waterfall is defined as: 9% pref, 75/25 to a 12%, then 50/50
- LP investment of $1,000,000
- Zero cash distributed during hold period
- Two year hold period
- $1,450,000 available cash for distribution
The GP will receive in cash
CorrectIncorrect - Question 9 of 10
9. Question
Which two of the following are appealing characteristics of CMBS financing to the borrower?
CorrectIncorrect - Question 10 of 10
10. Question
Your manager asks you to determine the optimal leverage on a project. Organize the following statements from most important to least important.
- Verify his or her assumptions for the investor waterfall.
- Obtain reliable market intel on pricing and terms for different leverage points.
- Build a sensitivity analysis that demonstrates the effect of different leverage levels.
- Document the number of venti triple shots it required to finish this model by the deadline.
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