CAIA - 17 - Listed vs. Unlisted Real Estate Flashcards Preview

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Flashcards in CAIA - 17 - Listed vs. Unlisted Real Estate Deck (46)
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1

___-___ real estate funds are funds with an indefinite life that do not limit the number of shares they offer investors.

Open-end real estate funds are funds with an indefinite life that do not limit the number of shares they offer investors.

2

In the ___, open-end funds typically redeem on a first come, first serve basis. In ___, investors do not typically have to wait.

In the U.S., open-end funds typically redeem on a first come, first serve basis. In Europe, investors do not typically have to wait.

3

In the UK, the primary unlisted open-end investment vehicle is a ___ ___ ___ .

In the UK, the primary unlisted open-end investment vehicle is a property unit trust.

4

Property unit trust prices are based on ___ ___.

Property unit trust prices are based on appraised values.

5

In the UK ___ ___are unregulated property unit trusts open only to institutional investors that are exempt from capital gains tax or corporation tax.

In the UK unauthorized PUTs are unregulated property unit trusts open only to institutional investors that are exempt from capital gains tax or corporation tax.

6

___ ___ are designed to provide UK retail investors exposure to RE properties.

Authorized PUTs are designed to provide UK retail investors exposure to RE properties.

7

Authorized puts (are/are not) exempt from capital gains tax

Authorized puts are exempt from capital gains tax

8

There are three types of property unit trusts (PUTs) for UK RE exposure:

 

1. ___ PUTs

2. ___ PUTs

3. ___ PUTs

There are three types of property unit trusts (PUTs) for UK RE exposure:

 

1. Unauthorized PUTs

2. Authorized PUTs

3. Offshore PUTs

9

___ ___ ___ ___ are investment vehicles that can invest in RE directly or indirectly (primarily via UK REITs)

Property authorized investment funds are investment vehicles that can invest in RE directly or indirectly (primarily via UK REITs)

10

___-___real estate funds are funds with a finite life that issue a fixed number of shares before making any RE investments.

Closed-end real estate funds are funds with a finite life that issue a fixed number of shares before making any RE investments.

11

Most closed-end RE funds are established as ___ ___, a key advantage of which is their ___-___status.

Most closed-end RE funds are established as limited partnerships, a key advantage of which is their tax-neutral status.

12

Real estate fund of funds are typically ___-end in the U.S. and U.K and ___-end in the rest of Europe.

Real estate fund of funds are typically open-end in the U.S. and U.K and closed-end in the rest of Europe.

13

The advantage of a fund of funds is that it provides ___.

The advantage of a fund of funds is that it provides diversification.

14

The disadvantage of a fund of funds is that it has ___ ___.

The disadvantage of a fund of funds is that it has extra fees.

15

There are four advantages of unlisted RE funds:

 

1. ___ of ___

2. ___ ___ provides potentially higher returns and less risk

3. ___ ___ for certain regions or subsectors

4. ___-___income.

There are four advantages of unlisted RE funds:

 

1. Diversification of risk

2. Skilled managers provides potentially higher returns and less risk

3. Targeted investments for certain regions or subsectors

4. Tax-exempt income.

16

There are 3 main disadvantages of fund of funds:

 

1. ___ ___ can reduce returns

2. ___can be significant

3. ___and ___-___effect

There are 3 main disadvantages of fund of funds:

 

1. Cash drag can reduce returns

2. Fees can be significant

3. Leverage and J-curve effect

17

___ ___are vertically integrated firms involved in land acquisition, development, ownership, operation and tenant services.

Large REITs are vertically integrated firms involved in land acquisition, development, ownership, operation and tenant services.

18

___ are professionally managed, and have the tax advantage of not paying corporate income tax on taxable profits provided they distribute a large portion of their income to shareholders in the form of dividends.

REITs are professionally managed, and have the tax advantage of not paying corporate income tax on taxable profits provided they distribute a large portion of their income to shareholders in the form of dividends.

19

___ ___ ___ ___ are similar to REITs except they search for capital gains and are more flexible.

Real Estate Operating Companies are similar to REITs except they search for capital gains and are more flexible.

20

Real Estate ETFs offer the following advantages:

 

1. ___ ___

2. ___ ___

3. ___-___features.

Real Estate ETFs offer the following advantages:

 

1. Low cost

2. Tax efficent

3. Stock-like features.

21

There are 6 advantages of listed RE funds:

 

1. ___ of ___

2. ___and ___

3. ___ ___ to RE

4. ___ for investors

5. ___ investments

6. ___-___ income

There are 6 advantages of listed RE funds:

 

1. Diversification of risk

2. Liquidity and divisibility

3. Instant exposure to RE

4. Information for investors

5. Targeted investments

6. Tax-exempt income

22

There are 2 disadvantages of RE funds:

 

1. Trade at ___/___to ___

2. ___ ___ with stocks.

There are 2 disadvantages of RE funds:

 

1. Trade at discount/premium to NAV

2. Highly correlated with stocks.

23

Non-US REITs (do/do not) pay corporate taxes

Non-US REITs do not pay corporate taxes

24

Global REITs differ from US REITs on rules related to ___ and ___of ___

Global REITs differ from US REITs on rules related to management and use of leverage

25

Many non-US REITs have ___ managers

Many non-US REITs have external managers

26

Many non-US REITs have limits on ___ ___

Many non-US REITs have limits on debt financing

27

Most REITs adopt an ___, ___-___style

Most REITs adopt an active, top-down style

28

REITs typically apply a (growth/value) style

REITs typically apply a growth style

29

___-___ ___ are illiquid investments that are available to retail investors through registered investment advisors.

Non-Traded REITs are illiquid investments that are available to retail investors through registered investment advisors.

30

Non-Traded REITs typically have a life span of ___-___years.

Non-Traded REITs typically have a life span of 7-10 years.

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