Chapter 8

1.)

1.) Preleasing is an effective risk-mitigation strategy since it increases the probability of success early in the project. T

2.) When developers put their philosophy into operation they divide the development process into four sets of activities. F-2 sets; precommitment and postcommitment p202

3.) During the construction phase a major challenge that construction lenders face is making sure that the money released for construction doesn’t run ahead of the actual construction. T p216

4.) The usual cost of a performance bond is around 10% of the total construction cost. F 1% p214

5.) A written document signifying that the constructed buildings meets all requirements of ordinances and codes is called:

a) Certificate of occupancy

b) Codes and ordinances

c) California ordinances

d) None of the above

a-p219

6.) Ordinances that regulate the construction, design, materials, and occupancy of all buildings within a jurisdiction are called:

a) Building restrictions

b) Administrative ordinances

c) Enforceable requirements

d) None of the above

d- building codes p219

7.) During what stage of the precommitment process does the developer form a team which ensures that the cash flows and financial returns envisioned are delivered:

a) Stage1

b) Stage4

c) Stage6

d) All of the above

c-p220

8.) Developers favor increasing tenant improvements over free rent because:

a) It could potentially add value

b) It saves them a lot of money

c) It could get rid of bad tenants

d) All of the above

a-p219