Practice Test Geeks(CRECI) Commercial Real Estate Certification Institute Practice Test
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Asset and Property Management Flashcards

7 cards from real CRECI practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Asset and Property Management flashcards as text

  1. Which metric best measures a commercial property's operating efficiency by comparing operating expenses to gross income?

    Answer: Operating Expense Ratio (OER)

    The Operating Expense Ratio (OER) divides total operating expenses by gross income to measure how efficiently a property is managed.

  2. A property manager discovers that a long-term commercial tenant is consistently paying rent 10 days late. What is the most appropriate first step?

    Answer: Issue a formal notice and review the lease cure period provisions

    The manager should issue a formal late notice and reference the lease's cure period before escalating to legal action.

  3. In commercial real estate asset management, what does 'disposition strategy' refer to?

    Answer: A plan for selling or exiting an asset at the optimal time

    Disposition strategy outlines when and how an asset will be sold or otherwise exited to maximize investor returns.

  4. Which lease structure requires the tenant to pay base rent plus all operating expenses, including taxes, insurance, and maintenance?

    Answer: Triple net (NNN) lease

    A triple net lease passes taxes, insurance, and maintenance costs directly to the tenant in addition to base rent.

  5. A commercial property's NOI is $500,000 and the market cap rate is 6.25%. What is the estimated property value?

    Answer: $8,000,000

    $500,000 ÷ 0.0625 = $8,000,000 is the estimated value using direct capitalization.

  6. What is the primary purpose of a property management agreement in commercial real estate?

    Answer: To define the scope of authority, duties, and compensation between owner and manager

    The property management agreement is the legal contract establishing the relationship, responsibilities, and fees between the property owner and manager.

  7. Which type of commercial lease requires the tenant to pay a base rent plus a percentage of their gross sales above a breakpoint?

    Answer: Percentage lease

    A percentage lease is common in retail properties and ties a portion of rent to the tenant's gross sales performance.