AI for Commercial Real Estate Underwriting Quiz

Answers and explanations appear as you take the quiz.

1. A property has $1.2 million of NOI. If the cap rate moves from 6.00% to 6.25%, what happens to the direct-cap value?
   • It rises from $19.2 million to $20.0 million
   • It falls from $20.0 million to $19.2 million
   • It stays at $20.0 million because NOI is unchanged
   • It falls to $12.0 million
2. Which tie-out best catches a rent roll extraction error?
   • Comparing the offering memorandum's cover photo to the listing
   • Checking that the broker's commission is correct
   • Reconciling scheduled rent on the rent roll to rental income on the T-12 after vacancy and concessions
   • Confirming that the exit cap rate matches last year's
3. Why are automated valuation models less reliable for commercial property than for houses?
   • Commercial transactions are fewer and less alike, so there is less comparable data
   • Commercial properties never publish rent rolls
   • Cap rates are fixed by regulators
   • Houses have no operating expenses
4. A lender's model flags a one-time insurance recovery in a borrower's T-12. Why does that matter?
   • It reduces the property's square footage
   • It must be added to debt service
   • It changes the loan's interest rate by law
   • It inflates income that will not recur, which overstates NOI and value
5. What does debt yield measure?
   • NOI divided by the loan amount
   • Annual debt service divided by NOI
   • Loan amount divided by purchase price
   • Rent growth minus expense growth
6. Which underwriting inputs does the guide describe as judgment calls that AI does not decide for the investor?
   • Unit counts and suite numbers
   • Lease start and end dates
   • Rent growth, vacancy, capital spending and exit cap rate
   • Tenant names on the rent roll
7. During lease-up, what extraction mistake can overstate income?
   • Using field-level confidence scores
   • Annualizing a trailing three months as if it were stable income, or recording free rent as full rent
   • Linking extracted fields back to source pages
   • Mapping expenses to a standard chart of accounts
8. How should a broker handle rent and vacancy figures in an AI-drafted market narrative?
   • Keep them if they sound reasonable
   • Round them to the nearest whole number
   • Delete the whole narrative
   • Replace or verify every figure against a licensed data source before use