CGA Exact Questions
The "as vacant" highest and best use is for retail and the as improved highest and best use is
for single tenant-office .... What principle underlies the valuation process? - ANS Consistent
Use
A property's site is leased for $40,000 per year, which is considered the market rate. The site
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represents 35% of the total value. The overall cap rate is 10% and the building cap rate is 11%.
What is the site value? - ANS $491,228
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A property was purchased for $325, 000 and the buyer expected to hold the property for five
years. The pro forma projections call for a net opera. income of $30,000 for Yrs 1 & 2, $35,000
for Yrs 3& 4 and $37,000 for Yr. 5. The property is expected to increase in value to $375k at the
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end of the holding period. What is the overall capitalization rate from the investment? - ANS
12.5%
In preparing a market value appraisal with a retrospective date of value, is the appraiser allowed
to consider any info after the eff. date of value, and why? - ANS Yes, the appraiser may use
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data subsequent to the eff. date as a confirmation of trends.
Which of the following demand-side economic factors creates value? - ANS Desire and
effective purchasing power
*"Always Appears" - If the overall cap rate for the fee simple interest is 10% and the leased fee
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cap rate is 8.5%, market net operating income is $20,000 and contract net operating income is
$12,500. What is the implied leasehold cap rate? - ANS 14.17%
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A staff appraiser, employed by a local bank for 5 years, plans to leave the bank to open an
independent appraisal business. Must the appraiser remove all work files for assignments
completed for the bank? - ANS No; the appraiser may make arrangements with the bank to
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access or retrieve the files.
The subject property is a 5,000 sf single tenant office building that is currently leased for $9.00
per sf with three years remaining on the lease... vacancy credit loss 10% ... owner expenses
25% of of eff. gross income ... market rent $12 per sf per year. Market overall rates 9.5%. a sale
of a leasehold interest sold for $29,000 with a net leasehold inocme of $12000 per year with 3
yrs remaining. What is the value of the leasehold estate, rounded to the nearest $1000 - ANS
$36,000
A property sold for $330, 000 with 10% down, financed at 7.5% interest for 20 years with
monthly payments. The property has a gross annual income of $42k. / Vacancy / collection loss
, totals 8% and expenses are $8k per year. What is the equity dividend rate indicated by this
sale? - ANS 5.85%
The market value of a property is $2,300,000 at stabilized occupancy. The direct building cost is
$1,500,000. The indirect costs are $200,000 and the land costs are $125,000. What is the
indicated entrepreneurial profit? - ANS $475,000
What term refers to a division of a total market based on the preferences of buyers and sellers?
- ANS Submarket
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The subject property has 200 acres on improved pasture, 300 acres of native pasture, and 500
acres of woodland. Comp A has 300 acres of improved pasture, 300 acres of native pasture,
and 400 acres of woodland. Comp A sold for $1050 per acre. Assuming native pasture sells for
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80% of improved pasture prices and woodland sells for 40% of improved pasture prices, what is
the per acre value of the subject property? - ANS $960 per acre
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An apartment complex was purchased 5 yrs ago for $850k, the owner received the following net
cash flows:
1: 50k
2: 52k
3: 48k ("sometimes the number is another 50k")
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4: 53k
5: 54k
At the end of yr. 5 the owner sold the property for $975,000. What is the IRR from this
investment? - ANS 8.51%
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An office building is expected to generate the following over its 5 year holding period:
Yr 1: $120,000
Yr 2: $130,000
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Yr. 3: $120,000
Yr. 4: $140,000
Yr. 5: $145,000
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If the appropriate yield rate is 13% what is the level income equivalent of this income stream? -
ANS $129, 572
What technique can be utilized to value a leasehold estate? - ANS Present worth of the rent
advantage.
The appraiser is asked to value a proposed assisted living facility. The appraiser surveys the
bed count and occupancy at existing faciiliites, checks with local authorities on other proposed
facilities, and interviews operators about any planned closure of beds. What portion of the
market analysis has the appraiser completed? - ANS Supply analysis
