REA Portfolio Management & Asset Strategy 3

Question 1

What does 'same-store NOI growth' measure in a REIT's operating performance?

Accepted Answer

NOI growth from properties owned throughout both the current and prior comparison period

Answer

Total NOI growth including acquisitions and dispositions

Answer

NOI growth attributable solely to rent increases on renewed leases

Answer

Year-over-year change in funds from operations per share

Question 2

Which disposition strategy minimizes tax impact for a real estate investor in the US?

Accepted Answer

1031 exchange to defer capital gains by reinvesting in like-kind property

Answer

Installment sale to spread capital gains recognition over multiple years

Answer

Charitable remainder trust to receive a charitable deduction

Answer

Straight sale and immediate reinvestment in a Qualified Opportunity Zone

Question 3

What is 'recapitalization' in the context of real estate asset management?

Accepted Answer

Restructuring ownership or debt on an asset, often by bringing in new equity or refinancing

Answer

Converting a property from leased to owner-occupied status

Answer

Completing capital improvements to bring a property to current market standards

Answer

Refinancing short-term construction debt into permanent financing

Question 4

An analyst benchmarks a portfolio against the NCREIF Property Index (NPI). What does outperforming the NPI indicate?

Accepted Answer

The portfolio generated higher risk-adjusted returns than the broad unleveraged institutional property universe

Answer

The portfolio achieved higher leverage than the institutional average

Answer

The portfolio disposed of assets at premium valuations during the period

Answer

The portfolio's vacancy rate was lower than the national average

Question 5

In real estate portfolio management, what is the 'J-curve effect'?

Accepted Answer

Early negative returns in a closed-end fund due to fees and unrealized assets, followed by positive returns as assets mature

Answer

The gradual increase in NOI as a newly acquired property is leased to stabilization

Answer

The U-shaped relationship between leverage and equity returns

Answer

The lag between cap rate movements and property value adjustments

Question 6

What is the primary function of a 'capital expenditure reserve' (cap-ex reserve) in property management?

Accepted Answer

Setting aside funds annually to cover future major repairs and replacements

Answer

Holding back earnest money from tenants until lease commencement

Answer

Reserving cash to fund tenant improvement allowances on new leases

Answer

Maintaining a liquidity cushion to cover debt service during vacancies