CMCP Questions - Section 2 (Insurance) Questions and 100% Verified Answers
What is a building' most valuable asset? - ANSWER Tenants
Fair rent calculations may apply to options to do what? - ANSWER Renew, expand, and periodic rental increases
What will the fair market rental val...
What is a building' most valuable asset? - ANSWER Tenants
B
LU
Fair rent calculations may apply to options to do what? - ANSWER Renew,
expand, and periodic rental increases
YC
What will the fair market rental value generally be based on? - ANSWER
Comparable leases of comparable space
D
What is comparable space? - ANSWER The comparable space must be in a
building and area comparable to the premises. (geographically, highly prominent
TU
space, age of the building, configuration of a center, type of tenants in the building,
premium amenities)
ES
In making rent comparisons for a ground lease, it is important to state whether the
premises will be appraised as what? - ANSWER Vacant land or as improved
C
and whether applicable zoning and other private/governmental restrictions will be
A
considered
What does CAM mean? - ANSWER Common Area Maintenance
What is a gross lease? - ANSWER Tenant pays only base rent and landlord
pays for all OpEx. Used in many office leases, especially older buildings
, What is a modified gross lease? - ANSWER Items spelled out that require
additional payment by Tenant. Typically utilities and real estate taxes are excluded.
Used in many suburban office leases.
What is a single-net lease? - ANSWER Base rent is paid to landlord and
B
included OpEx incurred by the landlord. Tenant pays property taxes separately.
Was commonly used for industrial buildings/warehouses in the 70s and 80s but not
LU
as common today.
YC
What is a double-net lease? (net-net) - ANSWER Base rent is paid to the
landlord and includes OpEx. Tenant pays property taxes and insurance separately.
Was commonly used for industrial buildings/warehouses in the 70s and 80s but not
D
as common today.
TU
What is a triple-net lease? (net-net-net) - ANSWER Rental payments are base
rent paid to landlord and do not include OpEx. Landlord undertakes management
ES
of property at the tenant's expense. First used with single-tenant buildings but now
common with large portfolio landlords, especially in urban markets
C
What is an absolute net lease? - ANSWER Similar to triple-net with even more
items being paid for by the tenant. All cost of owning, maintaining and operating
A
the building paid for by the tenant and usually paid directly to the providers of the
services. Almost always used in a single-tenant building and in cases where the
lease is primarily a financing tool
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