Exam 23: Development: The Dynamics of Creating Value

Once a specific use has been chosen for a site,the first stage in the development process,often considered the "entry ticket to development," is:

A developer's selection of an architect is a vital step in the development process as the architect fulfills a number of important roles throughout the life of the project.As compensation for contributions in the design phase,the architect is often given a percentage of the construction cost.For moderately complex designs,the average compensation will be:

Even the smallest building project involves a multitude of separate contractors to complete construction.Therefore,it becomes difficult for the developer to monitor the construction process.Which of the following individuals serves as the developer's liaison and representative on the project site?

After construction has been completed,a developer may decide to seek additional financing.If current interest rates are relatively high,but the developer expects them to decline in the near future,the developer would most likely seek financing in the form of a:

Suppose that a developer pre-leases space to a financially strong,national tenant such as Home Depot,without having yet built the structure in which they will be leasing space.This is more commonly referred to as a:

With a site under control,the developer will begin to evaluate the feasibility of the project.The main tool that a developer will use in determining the financial feasibility of a project is:

Suppose that a development group would like to determine if the local zoning and land-use ordinances will permit the type of development they desire.However,they do not want to be obligated to purchase the property if they find that their proposed development will not be permitted.To gain control of the site without being obligated to perform,the development group should purchase which of the following?

In each stage of the development process,the developer faces risks that can have a profound impact on the success of the particular project.Which of the following risks is of primary concern after the construction phase has been completed?

The majority of financing for the acquisition of land for development is most likely to come from which of the following parties?

Since the architect can be involved in various stages of the development process,there are a number of methods used to compensate him for his services,each of which may depend on the particular phase of development.If the architect provides pre-design services or schematics early in the development process,he will typically be compensated:

The strength of a successful developer lies in his or her ability to select design professionals and engineers that play vital roles in the project's plan and completion.Which of the following individuals would be most concerned,on a general level,with the design aesthetics,optimal use and preservation of the site,traffic flows,utility systems and drainage systems?

The expertise of several types of engineers must be coordinated by the architect in bringing together the final structure design.Which of the following types of engineers is responsible for specifications to achieve safety and stability for a structure's foundation?

Development involves a complex organization of many moving parts.Which of the following choices is often viewed as the single greatest cause of project delays and cost overruns?

Since banks seldom loan 100 percent of construction costs,developers often turn to mezzanine financing to obtain necessary funds.With mezzanine debt,which of the following entities is typically pledged as collateral to the lender?

With a multitude of players involved in the development process,it is important to understand where they participate within the various stages of development.Which of the following individuals is the least likely to be involved in the design stage of development?

While uncertainties involving the multitude of players and stages in the development process provide a great deal of risk,market cycles tend to compound these risks.Out of the four phases of a market cycle,which would be the most desirable point for a developer to enter the market?

There are a number of ways that a developer can finance the establishment of site control,each with its own advantages and disadvantages.Which of the following methodologies calls for only the initial land rent to be paid out before development actually gets under way?

In more complex development projects,a developer may choose to combine the roles of the architect and general contractor into one in order to mitigate design-cost conflicts that otherwise must be negotiated when plans are revised.This arrangement is more commonly referred to as a:

While the risks of construction lending may be less in a number of respects than those associated with land acquisition,banks still require a premium in their lending rate as compensation for the risks involved.For construction loans,banks typically require a premium above LIBOR that ranges from:

The developer will face a variety of costs throughout the project's life.Which of the following would be classified as a soft cost?