URES Workshop 4 Recap

An apartment has eleven stories. What type of multifamily type is this?

• Mid-Rise (Inner Loop)

• Podium

• Garden Style (Suburb)

• High-Rise (Urban)

What does a triple net (NNN) lease include?

• Base Rent, Utilities, Maintenance, Renter's Insurance

• Base Rent, Escalations, Admin, Property Tax

• Base Rent, Insurance, Property Tax, Common Area Maintenance

• Insurance, Repair & Maintenance

What is the correct order of the capital stack, from lowest to highest risk?

• Debt, Equity, Preferred Equity, Mezzanine Debt

• Common Equity, Preferred Equity, Mezzanine Debt, Debt

• Senior Debt, Mezzanine Debt, Preferred Equity, Common Equity

• Debt, Preferred Equity, Mezzanine Debt, Common Equity

What is the primary risk associated with investing in the common equity portion of the capital stack?

• Lower returns than debt investors

• Loss of principal in the event of a default or liquidation

• Limited control over the project’s operations

• Higher priority for repayment in case of liquidation

What is a "hurdle rate" in an equity waterfall structure?

• The rate at which debt is repaid

• A minimum return threshold that must be met before profit-sharing kicks in

• The rate of return paid to the sponsor

• The required amount of equity investment for the project to proceed

Every CRE deal must be financed with all four parts of the capital stack.

• True

• False

What does "clear height" refer to in an industrial property?

• The total height of the building from the ground to the roof

• The height from the floor to the lowest point of the ceiling or overhead obstruction

• The height of the warehouse's front entrance

• The height of the storage racks within the building