Question: Why do Class B properties generally sell at higher going-in cap rates than Class A properties?

Why do Class B properties generally sell at higher going-in cap rates than Class A properties?

Step by Step Solution

★★★★★

3.39 Rating (155 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

Relative to class A properties class B properties are more ris... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (2 attachments)

PDF file Icon

1468_605aea4c7b587_667872.pdf

180 KBs PDF File

Word file Icon

1468_605aea4c7b587_667872.docx

120 KBs Word File

Students Have Also Explored These Related Real Estate Principles Questions!

Q:

Assume the same information as in Exercise 2-5 except that instead of paying a cash earnout, Pritano Company agreed to issue 10,000 additional shares of its $10 par value common stock to the...

Q:

You are appraising a single-family residence located in the Huntington neighborhood at 4632 NW 56th Drive. The property is being acquired by a mortgage applicant and you have been asked to appraise...

Q:

In general, what effect would a reduction in risk have on "going in" cap rates? What would this effect have if it occurred at the same time as an unexpected increase in demand? What would be the...

Q:

Renaud Development Corporation (RDC) is a real estate development company that is 60% owned by Bertrand Renaud. RDC has three shareholders: (1) Bertrand Renaud, a major figure in real property...

Q:

Answer the following questions from the book A Real Esate Approach: A Value Approach, 5th Edition chapter 18 5. You are considering the purchase of a quadruplex apartment building. Effective gross...

Q:

Answer the following questions from the textbook, The Real Esate Princples Princples, A value Approach, 5th edition chapter 18. 6. Why do Class B properties generally sell at higher going-in cap...

Q:

Why do Class B properties generally sell at higher going - in cap rates than Class A properties?

Q:

Rita asks you, her new hire, to calculate the usual ratios her firm applies to development feasibility analysis (she knows they are simple somewhat ad hoc rules of thumb, but hey, they seemed to have...

Q:

Hello, This is the Fina 210 Course about Real estate. Could you help me to solve this problem and show me a solution? because i want to know how to solve this type of question in exam. Thank you! ps:...

Q:

Find the company selected for the Week 2 ( Starbucks ) assignment's annual report from SEC.gov or the investor relations section of the company's website. Be careful not to use quarterly reports....

Q:

Flag question: Question 1 Question 1 1 pts A client wants to reduce the property's hazard insurance coverage substantially, in order to save money on the premiums. If the property manager tries to...

Q:

Idont know what happened. When the new system was installed, the systems analysts made a clean getaway, as far as I can tell, says Marc Schnieder, waxing philosophic. Recall that he is owner of the...

Q:

Transmission through thin layers in Figure light is incident perpendicularly on a thin layer of material 2 that lies between (thicker) materials 1 and 3. (The rays are tilted only for clarity.) Part...

Q:

Assume that you purchased shares at a price of $40 per share. At this time you purchased a put option with a $40 strike price for $3. The share currently trades at $45. The profit/loss on this option...

Q:

=+g. Adam Smith puzzled over an analogous dilemma: He observed that people were willing to pay exorbitant amounts for diamonds but virtually nothing for water. With water essential for sustaining...

Q:

What are some of the types of risk that should be considered when analyzing real estate and other categories of investment?

Q:

An investor has projected three possible scenarios for a project as follows: PessimisticNOI will be $200,000 the first year, and then decrease 2 percent per year over a five-year holding period. The...

Q:

Use the same information as in problem 3. Now assume a loan for $1.5 million is obtained at a 10 percent interest rate and a 15-year term. a. Calculate the expected IRR on equity and the standard...

Q:

When you have visited edinburg, you have plan to purchase a benz car for 40000 pounds , payable in 3 months. You have enough cash at your bank in california city, which pays 0.35% interest per month,...

Q:

An investor must choose between two bonds: Bond A pays $85 annual interest and has a market value of $760. It has twelve years to maturity. Bond B pays $97 annual interest and has a market value of...

Q:

Please answer Question #39 and show work. A Treasury bill matures in 68 days and has a bond equivalent yield of 4.05 percent. What is the effective annual rate? A. 4.12 percent B. 4.14 percent C....