RE 165 Real Estate Economics
Due 5/10/2012
Quiz for Chapter 10: Commercial and Industrial Markets
1. Which of the following is least important for a business
property investor?
A. rent level
B. noneconomic amenity
C. credit rating of the tenant
D. terms of the lease
2. Nearness to other compatible businesses is called:
A. accessibility
B. location
C. linkage
D. trading area
3. Which of the following regarding the commercial real
estate market is generally false?
A. Demand is tied to swings in the business cycle.
B. Income tax law changes can influence the rate of
construction.
C. Lenders can have veto power over projects.
D. Buyers and sellers are unsophisticated.
4. Once the building of a commercial or industrial project
begins, it is difficult to stop even if it becomes apparent
that the demand for the project has declined. This is
known as the:
A. gravity effect
B. pipeline effect
C. financial effect
D. continuous effect
5. A thin line of commercial development along a city
street is a:
A. strip development
B. power-point cluster
C. neighborhood center
D. community center
6. Small local clusters of trendy retail stores are called:
A. power-point clusters
B. regional centers
C. megacenters
D. super regional centers
7. Changes that have influenced the location of commercial
properties include:
A. the shift from emphasis on the production of goods to
the providing of services
B. increased use of the automobile
C. changes in consumer tastes
D. all of the above
8. Which of the following is a current trend in the industrial
real estate market?
A. large multiple-story buildings
B. downtown locations
C. industrial parks
D. locating near upscale housing developments
9. A market-oriented industry tends to seek a location near
its:
A. raw materials
B. customers
C. lenders
D. employees
10. Which of the following is considered a store selling
‘‘convenience’’ goods?
A. minimarket
B. jewelry store
C. gun store
D. high-fashion retail outlet
11. The ability of business to pay rent is influenced by
economic conditions, leading to changes in property net
income and value.
A. true
B. false
12. Development of business property tends to:
A. lead changes in demand
B. result when rents are dropping
C. lag changes in demand
D. not involve market changes
13. Project design, layout, types of tenants, and the like are
often influenced by the lender.
A. true
B. false
RE 165 Real Estate Economics
Due 5/10/2012
Quiz for Chapter 10: Commercial and Industrial Markets
14. Government income tax changes have tended to
stimulate or suppress the rate of business real estate
development.
A. true
B. false
21. Linear commercial strips are:
A. favored by city planners
B. often of marginal economic quality
C. usually weakest at major crossroads and strongest in
midblock
D. usually dominated by national or regional chain tenants
15. Good leases add important value to business property.
Regarding a net lease, a potential investor is least
concerned with the:
A. length of the lease
B. risk of default by the tenant
C. protection in the lease against inflation
D. age of the building
22. Outlet malls and warehouse clubs are new examples of
changes in commercial real estate arising from:
A. new zoning categories
B. changes in building design
C. changes in consumer taste
D. changes in climate
16. Which type of shopping center tends to cater only to
people within a single city?
A. neighborhood
B. community
C. regional
D. super regional
23. A very low turnover rate over a long period of time in a
commercial neighborhood is:
A. a good sign
B. irrelevant
C. a bad sign
D. a bad sign if store sales volumes are increasing
17. Changes in consumer tastes and lifestyles will not
change commercial real estate patterns.
A. true
B. false
24. Which of the following is a trend in retail sales?
A. increase in T.V. home shopping networks
B. decrease in catalog sales
C. decrease in credit card purchases
D. increase in downtown department stores
18. Which of the following is an example of a marketoriented commercial use?
A. gravel pit
B. lumber mill
C. garment district
D. clothing mill
19. The telecommunication explosion has altered the need
for some businesses to seek a location near their
customers.
A. true
B. false
20. The number of large department stores in the
downtown area of most major cities in the United
States is at an all-time high.
A. true
B. false
25. Footloose industries tend to locate:
A. to be close to their customers
B. to be close to their workers
C. because of personal noneconomic reasons
D. to be close to raw materials