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A planned unit development (PUD) is a residential development that differs from traditional residential subdivisions in all of the following ways EXCEPT:

• it encompasses a blend of detached single family, attached single family, townhouses, and apartments.

• it typically has larger individual lots with extensive side-yards on the property.

• it typically includes a variety of common areas.

• it typically includes a variety of recreational facilities.

In the Elysian Forest example, the planned unit development was destined to be an unsuccessful venture from its inception because:

• there was a comparable project in the community that was successful.

• the site and location of the project was atypical of the area as there were significant disadvantages in terms of location and visual appeal.

• the target market was a nontraditional segment that relied heavily on a small portion of the local University City population.

• University City was a big, high density city that could not support such development.

In the Palm Grove Office Complex example, the project was destined to be an ill-fated venture from its inception for all of the following reasons EXCEPT:

• the zoning laws of University City ultimately prevented the project’s developers from starting the construction process.

• University City was not well-suited for large office space geared toward firms with greater than 25 employees.

• Palm Grove Office Complex lacked the visual exposure, convenient access, and parking that its competitors held significant comparative advantages in.

• the structures were primarily designed as general-purpose office space, which excluded potential occupants such as laboratories or medical offices.

Since most data for a given market study is not readily available, analysts must be creative in their use of data that they are able to obtain. The primary source for detailed household demographic information is:

• the U.S. Bureau of the Census.

• the Federal Reserve.

• the local tax collector’s office.

• not available publicly.

In collecting data for nonresidential property analysis, it is helpful to understand the business community that currently exists in the specific area in question. A preliminary approach for ascertaining the number of firms by size, industry, and location is to obtain data from:

• the Bureau of Labor Statistics.

• the National Transportation Service.

• the U.S. Bureau of the Census: County Business Patterns.

• the Federal Reserve.

A new residential development will face competition from other new developments, other builders, and sales of existing homes. To determine if demand in that market segment will be sufficient to justify proceeding with the project, a developer would be most interested in estimating a:

• capture rate.

• capitalization rate.

• risk-free rate.

• risk premium.

The amplitude of real estate cycles can vary significantly across property types. In considering cycles in vacancy rates, which of the following property types historically exhibits the least volatility in its cycle (i.e., the lowest amplitude of peaks and troughs throughout the cycle)?

• apartment

• office

• retail

• hotel

The presence of real estate cycles presents a major challenge when forecasting real estate market parameters. If the market value of a residential developer’s project exceeds its construction costs, an increase in the supply of units will occur. As the market becomes oversupplied, we would expect which of the following to occur?

• an increase in occupancy rates

• an increase in market values

• a decrease in real rental rates

• a decrease in construction costs

If the market value of a residential developer’s project falls below its construction costs, builders cease to build. With supply thus curtailed, we would expect which of the following to occur?

• a decrease in occupancy rates

• a decrease in market values

• an increase in real rental rates

• an increase in construction costs

Development of subdivisions, apartments, offices, or other commercial structures can have a lead time of two years or more. In general, the longer the construction lead time:

• the lower the construction cost.

• the greater the supply of units.

• the lower the market value.

• the greater the amplitude of real estate cycles.