Property Valuation
What is 'drive time analysis' in commercial real estate site selection in Hawaii?
AA. An analysis of how long it takes delivery vehicles to reach a commercial property
BB. An analysis measuring the geographic area accessible within a specified drive time from a location; critical for retailers, restaurants, and service businesses evaluating customer capture rates in Hawaii's traffic-constrained market✓ Correct
CC. A study of road quality and maintenance costs affecting commercial properties
DD. An assessment of traffic counts on highways near commercial properties
Explanation
Drive time analysis maps the geographic area reachable within specified drive times (5 min, 10 min, 15 min) from a location. For retailers and service businesses in Hawaii, this defines the trade area—how many potential customers live within a reasonable drive.
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Key Terms to Know
Comparable Sales (Comps)
Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
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