CFM - Certified Facility Manager Real Estate and Property Flashcards
6 cards from real CFM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CFM - Certified Facility Manager Real Estate and Property flashcards as text
What does due diligence involve when an organization is considering acquiring a new property for facility use?
Answer: A comprehensive investigation of the property physical condition, legal status, environmental conditions, financial performance, and market positioning before completing the acquisition
Due diligence uncovers physical, legal, environmental, and financial risks before an acquisition is completed.
What is cap rate (capitalization rate) and how is it used in property valuation?
Answer: A ratio of a property net operating income to its market value or purchase price, used to evaluate real estate investments and compare properties
Cap rate expresses the unleveraged yield of a property, enabling comparison across investment alternatives.
What is an ASTM Phase I Environmental Site Assessment and when is it required?
Answer: An investigation of a property environmental history to identify recognized environmental conditions (RECs) - potential contamination from past or current uses - typically required before property acquisition
Phase I ESA protects buyers from inheriting environmental liability by identifying potential contamination before purchase.
What is tenant improvement allowance (TI allowance) in a commercial lease?
Answer: A sum provided by the landlord to fund construction of improvements to the leased space for the tenant use, typically negotiated as part of the lease deal
TI allowances are a key negotiating point in commercial leases and directly affect occupancy costs and fit-out quality.
What is lease abstraction and why is it important for FM portfolio management?
Answer: The process of summarizing complex lease documents into standardized data fields for portfolio management and analysis
Lease abstraction converts lengthy legal documents into structured, searchable data that enables portfolio-wide analysis and critical date management.
What is market rent and how does it differ from contract rent in a commercial lease?
Answer: Market rent is the current rent for comparable space in the market; contract rent is the rent specified in an existing lease, which may be above or below market
The gap between market rent and contract rent determines whether a tenant is paying above or below market, which affects lease renewal strategy.