K C Ch-9

Question 1

What is the role of the facilities manager in dealing with internal customers

Answer 1

landlord

Question 2

When is it most favourable to own rather than lease

Answer 2

when interest rates are low and there is a substantial difference in cash flow beyond the break-even/payback point

Question 3

What do a company’s profit and loss situation and its choice to allocate costs as operating or capital directly affect?

Answer 3

tax liability

Question 4

When a corporation is acquiring new property through merger or downsizing, the facilities manager should review the impact of corporate objectives by concentrating on what?

Answer 4

budgetary implications of changes in the space inventory

Question 5

What macroeconomic conditions should the annual strategic real estate and facilities plan consider?

Answer 5

prime rate, unemployment rate, and inflation rate

Question 6

What is used to compare your corporate plans with each site’s ability to support those plans

Answer 6

an inventory review

Question 7

From the perspective of a takeover company, how is owned property viewed

Answer 7

as an asset, since it can be sold to raise capital

Question 8

What must be obtained to avoid environmental liability when buying or selling a commercial property?

Answer 8

environmental impact statement

Question 9

land use control measures that require a developer to transfer property, donate various types of improvements to a local government, or pay fees in exchange for the privilege of developing a property

Answer 9

mandatory dedications

Question 10

a measure imposed by local governments to insure requirements are met in area of fire, safety, sanitation, health, etc., before occupancy can occur

Answer 10

certificate of occupancy

Question 11

Companies that must invest in expensive capital and fixed equipment, such as production line machinery, tend to prefer which method of occupancy?

Answer 11

owning their facility

Question 12

What is a downside to building a highly specialized property?

Answer 12

it creates an asset that is valuable only to the corporation and may be difficult to sell

Question 13

Build-to-suit, enabling a corporation to assume ownership by using a developer to hold ownership until the project is complete, is known as what?

Answer 13

expensing costs

Question 14

a lease that vests the highest degree of responsibility for control of the property and payment of operating costs with the tenant

Answer 14

triple-net lease

Question 15

What are some lease clauses that are advantageous to the lessor but disadvantageous to the lessee?

Answer 15

rate adjustments, expense pass-throughs, and expense caps

Question 16

When negotiating a lease, the negotiating team should include what members

Answer 16

the customer’s facilities manager, a legal expert, and an outsourcing specialist

Question 17

In leased space, who is the official tenant that participates legally in the lease contract?

Answer 17

the facilities manager

Question 18

an arrangement whereby a company uses its own capital to develop a project, then sells that completed project to a developer who then executes a lease with the same company

Answer 18

sale-leaseback

Question 19

a property’s value when the seller-tenant vacates the property

Answer 19

reversionary value

Question 20

In leased space, who should request any building services affected by the lease contract

Answer 20

the facilities manager

Question 21

Standard services that every commercial tenant requires are known as what

Answer 21

building standard services

Question 22

Costs the landlord bears and then charges back to the tenants on a pro rata basis, such as extra utilities, are called what?

Answer 22

indirect costs

Question 23

When the tenant must vacate the property before the end of the lease, who should make the initial buyout offer?

Answer 23

the tenant

Question 24

When making the buyout offer, the initial offer made to the landlord is usually what amount?

Answer 24

one-half or less of the break-even number

Question 25

Why are due diligence environmental audits necessary?

Answer 25

they protect the health and safety of occupants, your company’s environmental liability, and your ability to remarket the property