A. Obtaining permits
B. Financing
C. Effective communication between developer, architect, and engineer
D. Selecting the architect
With a performance-based management contract, an asset manager's fees are tied
directly to the rate of return earned by investors on the portfolio of managed properties
relative to a benchmark. In private commercial real estate, the choice of benchmarks for
performance is limited in large part to return indices provided by which of the following
organizations?
A. Standard and Poor's
B. National Association of Real Estate Investment Trusts
C. National Council of Real Estate Investment Fiduciaries
D. Wilshire Associates
The purchase price of an income producing property today is $570,000. After analysis
of the expected future cash flows, expected sales price, and expected yield, the investor
determines that the future cash flows have a present value (PV) of $580,000. Taking
into consideration the price of the property today, what is the net present value (NPV)
of this investment opportunity, and should the investor take the deal?