fi331 - ch 1

real estate is ___
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Terms in this set (37)
real estate is ___
property
two types of property:

1. ___
2. ___
tangible, intangible
type of property:

- physical assets that can be owned
- can be real or personal property
tangible
type of property:

- non-physical assets such as stocks, bonds, mortgages, leases
intangible
real estate as a ___:

◦"raw" land
◦improvements to the land
-- excavation & fill
-- sewers & other utilities
-- roads & driveways
◦structures (improvements on the land)
tangible asset
real estate as a ___:

◦ exclusive possession of the real property
-- use or enjoyment
---> can use as rental property to generate cash flow
◦ disposition
◦ can be unbundled in many ways
-- ex: owner leases property to renter
bundle of rights
real estate as a ___:

◦ brokerage
◦ development
◦ leasing
◦ property management
◦ asset management
◦ real estate law
◦ appraisal
◦ market consulting
◦ mortgage finance
◦ planning
industry & profession
real estate in the ___:

half of the world's wealth is in real estate

◦ generates over 25% of U.S. gross domestic product (GDP)
-- housing alone accounts for almost 17-18%

◦ generates nearly 70% of local government revenue (property tax)

◦ creates jobs for nearly 9 million Americans
economy
___ real estate is second only to the public stock market in total market value
non-government, non-corporate
"___" RE is all rental/income producing property (including apartments)
commercial
real estate values are determined by interactions in 3 distinct markets/sectors 1. ___ markets 2. ___ markets 3. ___ sector(s)user (space), capital, governmentuser market: market for the ___ real estatephysicaluser market: "buyers" receive ___ to use space & is called the "space" market or "rental market" & where ___ are determinedright, rental ratesuser market: these markets are very "___" & usually ___ competitivelocal, highlyuser market: ___ local markets for various property types: retail, office, etc.separateuser market: demand & supply on ___ side - individuals, households, & firms require space either for consumption or productiondemanduser market: demand & supply on ___ side - real estate owners/operators who rent space to tenantssupplysegmentation of user/space markets: - both supply & demand side of user markets are very specific to ___ & ___ type - implies user/space markets are highly ___ - because of market segmentation, rental ___ for physically similar space can vary widely both across locations & property typeslocation, building, segmented, prices*capital markets* - RE competes for ___ in capital markets (stocks, bonds..) - investors select investments based on ___ expectationsfunds, risk/returnRE discount rates are largely determined in the ___ marketscapital*capital markets* bidding (demand) by investors determines: - ___ of various maturities (treasury "yield" curve) - ___ for risky investmentsrisk free rates, required risk premiums*public capital markets* - small ___ units/shares trade on exchanges - ___ buyers & sellers - ___ quotes are available for all to see - markets are characterized by a high degree of ___ - ___ efficienthomogeneous, many, price, liquidity, informationally*private property markets* - absence of ___ market (or even price lists) - assets trade ___ in private transactions (thus a lack of ___) - common for "whole" assets to be traded in a single transaction (___) - less ___ with higher transaction costscentralized, infrequently, transparency, indivisibility, liquidity*property/asset markets* - market for ___ claims to RE assets - buyers/owners receive rights to cash flows generated by ___ space to tenants - demand side of property market is made up of investors wanting to ___ property - supply side of property market is made up of investors wanting to ___ property - property market is ___, not segmented like space market (i.e., investment capital can come from anywhere)ownership, leasing, buy, sell, integrated*quadrant of real estate capital market* private or public markets -- equity/owners or debt/lenders individuals, partnerships, limited liability corporations, private equity fundsprivate markets, equity/owners*quadrant of real estate capital market* private or public markets -- equity/owners or debt/lenders public real estate investment trusts (REITs) & real estate operating companiespublic markets, equity/owners*quadrant of real estate capital market* private or public markets -- equity/owners or debt/lenders banks, insurance companies, finance companies, private lendersprivate markets, debt/lenders*quadrant of real estate capital market* private or public markets -- equity/owners or debt/lenders commercial mortgage-backed securities (CMBS) & mortgage REITspublic markets, debt/lendersequity participants are the ___ of real estateownersdebt participants are the ___ of real estatelenders___ land represents approximately 6% of land in the USdeveloped*improvement on or to the land* fenceson*improvement on or to the land* wallson*improvement on or to the land* buildingon*improvement on or to the land* streetsto*improvement on or to the land* sewer systemto*improvement on or to the land* walkwaysto