Property Valuation
A Massachusetts property is subject to a long-term below-market lease. The 'leased fee' value compared to the 'fee simple' value would be:
AHigher because leases add stability
BLower because the below-market rent reduces income compared to a property leased at market rates✓ Correct
CThe same because leases don't affect fee simple value
DHigher because leases attract better tenants
Explanation
A property subject to a below-market lease has a leased fee value lower than its fee simple (market rent) value because the income is suppressed. The difference represents the leasehold interest's value held by the tenant.
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