CFA Practice Question

There are 195 practice questions for this study session.

CFA Practice Question

In times of prosperity, which type of commercial properties will likely to perform the best?
A. Office buildings.
B. Warehouses.
C. Shopping malls.
Explanation: Demand for space causes rental rates to increase and an extended time period is required to build an office tower to relieve the pressure on the market and rents.

User Contributed Comments 3

User Comment
pires100 I think the same thing can be said about retail properties. True, maybe not the the extent of office properties but retail properties also have percentage rent clauses which would allow the owner to benefit from much higher income during prosperous times.
BradRoss agree with pires. Two good choices
paynito1 Maybe something about the anchor tenants like Sears/JCPenney's/Dillards having super-long term leases like 25 years, so it keeps you from jacking up your AvgPricePerFoot as much in retail, but you the rates adjust upward for office space more quickly.
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