Week 3 - Market areas ch4

Question 1

what is plot ratio

Answer 1

> floor area ratio

PR is defined as the gross floor area of all buildings on a site divided by the area of the site, but excluding the area of stairs, loading bays, access ways or car parking areas, or any area occupied by the machinery required for air conditioning, heating, power supply or lifts. (Melbourne Planning Scheme Ordinance)

Grandfathering: Buildings built before the introduction of zoning regulation (height and/or plot ratio) can maintain overbuilt space

Question 2

types of ownership

Answer 2

Ownership in severalty
Joint Tenancy
Tenancy by the Entirety
TIC (Tenancy in Common)
Partnership
REIT

Question 3

characteristics of efficient markets

Answer 3

large number of buyers and sellers
homogenous products
buyers and sellers act with knowledge and information
supply and demand never far out of balance (equilibrium)
market mechanism

Question 4

what are the 4 property cycles

Answer 4

expansion = sustained growth in demand, increasing construction

Decline = positive but falling demand and increasing vacancy

Recession = Falling demand, decreasing vacancy

Recovery = Increasing demand, decreasing vacancy

Question 5

define submarket

Answer 5

division of total market that reflects preferences of particular buyer or seller

Question 6

define market segmentation

Answer 6

process by which submarkets within larger markets are identified and analysed

Question 7

Define disaggregation

Answer 7

Grouping properties together based on similar attributes

Question 8

market delineation process

Answer 8

identify property type
identify property features (including occupancy and customer base)
market area
available substitute properties
complimentary properties

Question 9

define market area

Answer 9

geographic delineation of the market for a specific category of real estate - the area in which alternative, similar properties effectively compete with the subject property

Can encompass one or more sub-markets
Market for a specific category of RE
Area where alternative, similar properties compete

Question 10

define neighbourhood

Answer 10

a group of complementary land users: grouping buildings businesses or enterprises

The immediate environment / vicinity / surroundings

Question 11

define suburb / district

Answer 11

type of market area defined by homogenous land use e.g. apartments, houses, commercial, industrial

Question 12

market areas 4 stages

Answer 12

growth - gains public favour + acceptance

stability - market experiences equilibrium without marked gains or losses

Decline - stage of diminishing demand in a market area’s life cycle

Revitalisation - epitomised by renewal, redevelopment, modernisation and increasing demand

Question 13

explain gentrification

Answer 13

Gentrificationis a process of renovation and revival of deteriorated urban neighbourhoods by means of influx of more affluent residents, which results in increased property values and the displacing of lower-income families and small businesses.

Residents who lived in the gentrified area are likely to be displaced by the influx of more affluent residents

Question 14

main types of sub markets

Answer 14

Residential
Commercial
Industrial
Retail
Agricultural

Question 15

explain single family sub market

Answer 15

Predominance of owner-occupied homes, low density areas

Categories 
Detached houses
Custom-built subdivisions
Senior housing
Rural housing

Value influences
Transportation services
Access to workplace, shopping centres 
Quality of local schools
Reputation of area
Supply of vacant land likely to be developed

Question 16

explain multi family residential sub markets (apartments)

Answer 16

Predominance of rented occupancy
Higher density than single-family residential sub-markets

Categories
Multistorey/high-rise buildings
Townhouses
Condominiums

Proximity to employment
Proximity to open spaces, parks, lakes, or other natural features
Parking for tenants and guests (outdoor vs. indoor and snow…)
Vacancy rates

Question 17

explain office sub markets + ratings

Answer 17

Buildings used as office premises
Leased or owner-occupied
Sale & Leaseback (not limited to office)

Categories – Premium, A, B, C or D Grade

Criteria used:
Size, design, configuration, environmental performance, location, communications, security, lifts, air-conditioning, mechanical, and other services and amenities.

Question 18

explain premium grade offices

Answer 18

Excellent location and accessibility, high-quality building and management, over 20,000 m2

Question 19

explain A grade offices

Answer 19

Good location and accessibility, high-quality building and management, over 10,000 m2

Question 20

explain B grade offices

Answer 20

Good location and access, structure showing minimal obsolescence, minimum size 5,000m2

high-quality buildings that don’t have certain amenities or lack the “wow” factor

Question 21

explain C grade offices

Answer 21

reasonable standard of finish & maintenance, but may have some functional obsolescence or be in less-desirable locations

Question 22

Explain D grade offices

Answer 22

lower or poor quality finish, lack basic functionality, or are in very undesirable locations

Question 23

value influences of office sub market

Answer 23

Location - time and distance from potential labour force e.g. access, highway
Physical characteristics
Environmental sustainability
Direction of observable growth in the submarket
Availability of land for expansion
pedestrian and vehicle traffic flow

Question 24

define retail sub markets and there categories

Answer 24

Concentration of retail locations often along major street

Categories:	
Shopping centres
Department stores
Regional shopping centres
Major regional shopping centres

Question 25

Explain shopping centre sub market

Answer 25

Typical size Usually < 10,000m2 Typical catchment area Immediate neighbourhood Radius of 2 KM Typical tenants 1-2 small supermarkets along with food and non-food specialty shops and services

Question 26

explain department store submarket

Answer 26

Typical size Approx. 20,000 m2 Typical catchment area Radius of 2 to 4 KM Typical tenants A supermarket, and specialty shops; may also offer professional, financial services and recreational facilities

Question 27

explain regional shopping centre submarket

Answer 27

Typical size 30,000 to 50,000 m2 Typical catchment area May include several neighbourhood centres Radius of 5 KM Typical tenants Full department stores plus banks, service establishments, recreational facilities, general merchandise

Question 28

explain major regional shopping centre submarket

Answer 28

Typical size 50,000 to 85,000 m2 Typical catchment area Includes multiple neighbourhood centres Radius of 10 KM Typical tenants Multiple full scale department stores supported by a wide range of other retail facilities

Question 29

Value influences of retail submarkets

Answer 29

Value influences Purchasing power of people likely to patronise Location, time-distance from customers Accessibility Physical characteristics of property Availability of customer parking and future expansion space

Question 30

define industrial sub markets + explain

Answer 30

Defining characteristic – Cluster of industrial concerns, e.g. a manufacturer and its suppliers Industrial properties include Manufacturing spaces Warehouses and distribution Transport and distribution facilities Availability of labour Availability of raw materials Effect of environmental controls

Question 31

define + explain agricultural submarkets

Answer 31

Underdeveloped land used for production of foodstuffs, timber, oil and other agricultural products ``` Categories Dairies Grain farms Timber logging Land used for oil/mineral extraction ``` Value influences ``` Climate Topography Soil types Transportation Availability of labour Land size ```