3.5 Real Estate Equity

Question 1

equity residual approach calculates the property’s equity value by:

Answer 1

equity residual approach calculates the property’s equity value (by subtracting mortgage-related cash outflows [e.g., interest expense] from the cash flows and then discounting the resulting cash flows).

Question 2

NCREIF property index is an unleveraged/leveraged index based on monthly/quarterly returns.

Answer 2

NCREIF property index is an unleveraged index based on quarterly returns.