PowerPoint CH2 Flashcards
What are projects with high market risks?
-Hotels and motels
-Restaurants and entertainment
Why do hotels have high market risk?
they are seasonal and occupancy is based on a nightly rate
Why do restaurants have a high market risk?
they are reliant on the surrounding area, jobs, and the market
What are projects with prospective major changes in the market?
Lease rollover for major tenants, major renovations
What is lease rollover?
When multiple leases end at the same time
What are some things that impact market risks?
Default risk, jobs, vintage, occupancy, location
What is the multiplier effect?
base income is re-spent, producing additional income
What makes a multiplier effect in a city greater?
-more isolated
-more diversified
-larger
-the base activity uses more local goods and services
Why might there be a leak in the economic base multiplier?
online shopping
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What are the ‘industry economies of scale’?
Efficiencies of production due to scale of local industry
What happens when there is a growth of an industry within a city?
it creates special resources and cost advantages for that industry
What are agglomeration economies?
Efficiencies in production due to multiple local, large-scale industries
Cities with industry economies may be more _______ to downturns due to cost advantage.
resistant
What long-term advantages will cities with agglomeration economies have?
-Incubator for new businesses
-Cost advantage for emerging industries
Urban growth causes real estate market ___.
growth
What factors affect a bid-rent curve?
-Number of bidders (commuters or firms)
-Wage rate (time cost) of commuters
-Speed of travel
-Frequency of trips
What does bid-rent analysis do?
Explains how urban land uses are determined
What does bid-rent analysis assume?
Assumes all commuters have one demand for access (a single “linkage” defined as a relationship between land uses)
What is the concentric circle model?
- CBD –Industry, commerce and Downtown
- Warehouse
- Transition (Industrial/Mfg)
- Blue collar
- White-collar Clerical
- Executive
