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Humber College PREX-1060A Exam Syllabus Topics:
Section
Objectives
Topic 1: Commercial Property Types
- Retail and Office Properties
1. Retail Condominiums
2. Office Buildings
3. Property Management Considerations
- Industrial Properties
1. Industrial Site Evaluation
2. Heavy Industrial Uses
3. Light Industrial Uses
Topic 2: Commercial Property Transactions
- Commercial Property Sales
1. Commercial Agreements of Purchase and Sale
2. Property Valuation
3. Due Diligence Procedures
- Commercial Leasing
1. Tenant Representation
2. Lease Structures
3. Management Fees
Topic 3: Property Development and Land Use
- Taxation and Regulatory Considerations
1. Municipal Compliance
2. Assessment Issues
3. Property Tax Adjustments
- Development Analysis
1. Environmental Due Diligence
2. Highest and Best Use
3. Site Servicing Requirements
Topic 4: Financial Analysis
- Commercial Financing
1. Mortgage Terms and Conditions
2. Late Payment Provisions
3. Commercial Mortgages
- Business Financial Review
1. Investment Performance Evaluation
2. Cash Flow Analysis
3. Audited and Unaudited Financial Statements
Humber College Exam 4: Invigilated Theory Sample Questions:
A salesperson is discussing the advantages and disadvantages of owning commercial real estatewith their investor buyer client. Which of the following is NOT an advantage of owning commercial real estate?
A. Potential for tax sheltering possibilities for the investor is an advantage of owning commercial real estate.
B. Potential to recover capital through refinancing is an advantage of owning commercial real estate.
C. Limited equity investment while gaining leverage through financing is an advantage of owning commercial real estate.
D. Quick turnaround time to free up capital when needed is an advantage of owning commercial real estate.
A buyer client and their salesperson are doing a visual check of the industrial property that the buyer is planning to purchase. When they get to the rear of the property, the salesperson observes a potential source of contamination. Which of the following factors is likely the cause of concern for the salesperson?
A. The office building next door has an overflow parking lot.
B. There is a residential neighborhood and playground nearby.
C. The neighboring property includes a restaurant, a dental clinic, and a law office.
D. There is vacant land nearby with a small pond with discolored standing water.
When representing a client who is selling a business, a salesperson must be aware of concerns related to compliance. Which of the following is NOT a compliance concern?
A. The seller discloses all liabilities of the business in writing
B. The seller provides insufficient due diligence documents
C. Income and expense statements contain misrepresentations
D. The condition of goods, chattels, and fixtures cannot be verified
A land developer is interested in purchasing a piece of vacant land. Which of the following statements about evaluating the highest and best use of the real property is correct?
A. The estimate of value is related to how a typical buyer, with a reasonable knowledge of the market and property, wants to use the property.
B. A property's highest and best use is the use that, at the time the building was built, was most likely to produce the greatest net return.
C. A designated appraiser will use all factual sales data to determine the value of the current highest and best use of the property.
D. The land developer can identify the use of the property that is anticipated to produce the highest overall return so the appraiser can complete the appraisal.
The cost approach is one method of real estate evaluation that an appraiser may use to estimate the value of a commercial property. Which of the following is NOT an accurate statement regarding the cost approach?
A. The cost approach is useful for the appraisal of property types for which sales and income data are scarce, such as industrial and special-purpose properties.
B. The cost approach is preferred for newer construction properties, as the appraiser would not need to make a subjective estimation of the accrued depreciation of the building.
C. The cost approach is typically used to appraise income-generating properties.
D. The cost approach is preferred for older construction properties, as calculating depreciation on them is fairly straightforward.
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