Chapter 6

Question 1

Forecasting revenue is essentially a…

Answer 1

marketing research problem

Question 2

Demand for rental space at a specific location depends on the level of…

Answer 2

demand in the market area and on the desirability of amenities and locational factors the site confers

Question 3

Demand for rental space at a specific location depends on the level of demand in the market area and on the desirability of amenities and locational factors the site confers.
• It depends also on

Answer 3

the price and availability of competing sites that offer about the same level of want-satisfying power

Question 4

both physical and locational characteristics affect a property’s ability to

Answer 4

command rents

Question 5

both ____________ affect a property’s ability to command rents.

Answer 5

physical and locational characteristics

Question 6

______ include both geological features and improvements such as landscaping and buildings

Answer 6

Physical characteristics

Question 7

______ relate to how well a location is suited for its intended use.

Answer 7

locational characteristics

Question 8

The contribution that physical characteristics make to a property’s competitive position ________

Answer 8

changes over time

Question 9

The contribution that physical characteristics make to a property’s competitive position changes over time.
These changes are attributable both to…

Answer 9

physical deterioration and to altered needs or tastes on the part of prospective tenants

Question 10

The contribution that physical characteristics make to a property’s competitive position changes over time: Improvements

Answer 10

become less suitable with age, as a result of decline in their attractiveness and because of increased maintenance costs

Question 11

_________ may render existing physical structures less desirable than before, even without the factor of physical deterioration.

Answer 11

Technological innovation or variation in style and tastes

Question 12

The contribution that physical characteristics make to a property’s competitive position changes over time: • Technological innovation or variation in style and tastes may

Answer 12

render existing physical structures less desirable than before, even without the factor of physical deterioration.

Question 13

Linkages, neighborhood influences, and institutional factors all contribute to relative _______

Answer 13

locational desirability

Question 14

________, _________ ,and _______ all contribute to relative locational desirability.

Answer 14

Linkages, neighborhood influences, and institutional factors

Question 15

_______ require movement of goods or people between properties and give rise to transfer costs

Answer 15

Linkages

Question 16

Linkages require _____________ and give rise to _________

Answer 16

movement of goods or people between properties,

transfer costs

Question 17

The importance of locations that minimize transfer costs increases with…

Answer 17

the relative importance of these costs to the total cost of a tenant’s use of the site.

Question 18

Both ______ and _____ must be factored into location decisions

Answer 18

explicit and implicit transfer costs

Question 19

Linkages are almost certain to ______

Answer 19

change over time

Question 20

Linkages are almost certain to change over time

Answer 20

Altered lifestyles, new technology, shifts in consumer tastes—these and a host of other phenomena may promote the emergence of important new linkages, as well as a decline in the significance of old ones.

Question 21

Because linkages play such a dominant role in determining a property’s ability to command rent…

Answer 21

accurate perception of emerging trends is a major factor in reliable income forecasting.

Question 22

Even if linkage relationships remained virtually constant, their impact on a property’s income-generating capacity…

Answer 22

might shift due to changes in relative transfer costs.

Question 23

As the cost of moving people or goods between linked sites is increased or decreased by modification of transportation facilities or other economic shifts…

Answer 23

the linkage’s impact on a site’s ability to command rent may be altered.

Question 24

Sites are subject to both _________ and _________ influences

Answer 24

desirable and undesirable neighborhood

Question 25

Sites are subject to both desirable and undesirable neighborhood influences.
• Such influences are particularly important in real estate decisions because…

Answer 25

site immobility prohibits moving to escape the influence of neighborhood factors

Question 26

Building and zoning ordinances, fire codes, and federal, state, and local land-use laws are frequently designed to protect against…

Answer 26

the encroachment of neighborhood factors deemed undesirable

o Private agreements are often designed with the same objective

Question 27

______ considerations must be factored into revenue forecasts

Answer 27

Supply and demand

Question 28

Supply and demand considerations must be factored into revenue forecasts:
• This involves estimating probable changes in

Answer 28

site linkages, in neighborhood influences, and in institutional factors that may influence demand or supply.

Question 29

_________ is a less troublesome consideration when significant monopoly elements are present

Answer 29

supply

Question 30

Supply is a less troublesome consideration when significant _________ are present

Answer 30

monopoly elements

Question 31

Monopoly elements may result from…

Answer 31

unique physical or locational factors or they may exist only in the perception of potential tenants

Question 32

Regardless of their origin, they reduce the property’s vulnerability to competitive inroads from comparable property.

Answer 32

monopoly elements