scholarly journals Effect of Seismic Risk on Lifetime Property Value

2004 ◽  
Vol 20 (4) ◽  
pp. 1211-1237 ◽  
Author(s):  
Keith A. Porter ◽  
James L. Beck ◽  
Rustem V. Shaikhutdinov ◽  
Siu Kui Au ◽  
Kaoru Mizukoshi ◽  
...  
Keyword(s):  
Real Estate ◽  
Earthquake Engineering ◽  
Seismic Risk ◽  
Investment Decision ◽  
The United States ◽  
Market Risk ◽  
Risk Tolerance ◽  
Commercial Real Estate ◽  
Repair Costs ◽  
The Mean

We examine seismic risk from the commercial real estate investor's viewpoint. We present a methodology to estimate the uncertain net asset value ( NAV) of an investment opportunity considering market risk and seismic risk. For seismic risk, we employ a performance-based earthquake engineering methodology called assembly-based vulnerability (ABV). For market risk, we use evidence of volatility of return on investment in the United States. We find that uncertainty in NAV can be significant compared with investors’ risk tolerance, making it appropriate to adopt a decision-analysis approach to the investment decision, in which one optimizes certainty equivalent, CE, as opposed to NAV. Uncertainty in market value appears greatly to exceed uncertainty in earthquake repair costs. Consequently, CE is sensitive to the mean value of earthquake repair costs but not to its variance. Thus, to a real estate investor, seismic risk matters only in the mean, at least for the demonstration buildings examined here.

Cognitive bias, intuitive attributes and investment decision quality in commercial real estate in Uganda

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Moses Munyami Kinatta ◽  
Twaha Kigongo Kaawaase ◽  
John C. Munene ◽  
Isaac Nkote ◽  
Stephen Korutaro Nkundabanyanga
Keyword(s):  
Real Estate ◽  
Loss Aversion ◽  
Cognitive Bias ◽  
Investment Decision ◽  
Commercial Real Estate ◽  
Decision Quality ◽  
Content Type ◽  
Real Estate Sector ◽  
Confidence Degree ◽  
The Relationship

PurposeThis study examines the relationship between investor cognitive bias, investor intuitive attributes and investment decision quality in commercial real estate in Uganda.Design/methodology/approachA cross-sectional research survey was used in this study, and data were collected from 200 investors of commercial real estate in Uganda using a structured questionnaire. Hierarchical regression analysis was used to test the hypotheses derived under this study.FindingsThe results indicate that investor cognitive bias and investor intuitive attributes are positive and significant determinants of investment decision quality in commercial real estate. In addition, the two components of Investor cognitive bias (framing variation and cognitive heuristics) are positive and significant determinants of investment decision quality, whereas mental accounting is a negative and significant determinant of investment decision quality. For investor intuitive attributes, confidence degree and loss aversion are positive and significant determinants of investment decision quality, whereas herding behavior is a negative and significant determinant of investment decision quality in commercial real estate in Uganda.Practical implicationsFor practitioners in commercial real estate sector should emphasize independent evaluation of investment opportunities (framing variation), simplify information regarding investments (Cognitive heuristics), believe in own abilities (Confidence degree), be risk averse (loss aversion) and avoid making decisions based on subjective visual mind (mental accounting) and group think/herding in order to make quality investment decisions. For policymakers, the study has illuminated factors such as provision of reliable information that ought to be taken into account when promulgating policies for regulation of the commercial real estate sector. This will help investors to come up with investment decisions which are plausible.Originality/valueFew studies have focused on investor cognitive bias and investor intuitive attributes on investment decision quality in commercial real estate. This study is the first to examine the relationship, especially in the commercial real estate sector in a developing country like Uganda.

SEL versus SUL: managing seismic risk in commercial real estate investments

2010 ◽  
Vol 21 (6) ◽  
pp. 389-404 ◽  
Author(s):  
Charles C. Thiel ◽  
Thomas E. Kosonen ◽  
David A. Stivers
Keyword(s):  
Real Estate ◽  
Seismic Risk ◽  
Commercial Real Estate ◽  
Real Estate Investments

Collateral Damage: Effects of the Japanese Bank Crisis on Real Activity in the United States

2000 ◽  
Vol 90 (1) ◽  
pp. 30-45 ◽  
Author(s):  
Joe Peek ◽  
Eric S Rosengren
Keyword(s):  
United States ◽  
Real Estate ◽  
Economic Activity ◽  
The United States ◽  
Commercial Real Estate ◽  
Real Activity ◽  
Real Estate Markets ◽  
Real Effects ◽  
Supply Shock ◽  
Loan Supply

The Japanese banking crisis provides a natural experiment to test whether a loan supply shock can affect real economic activity. Because the shock was external to U.S. credit markets, yet connected through the Japanese bank penetration of U.S. markets, this event allows us to identify an exogenous loan supply shock and ultimately link that shock to construction activity in U.S. commercial real estate markets. We exploit the variation across geographically distinct commercial real estate markets to establish conclusively that loan supply shocks emanating from Japan had real effects on economic activity in the United States. (JEL E44, F36)

Commercial Real Estate-Specific Approaches and Ethical Dilemmas in the Relationship Between Stakeholders

2020 ◽  
pp. 16-27
Author(s):  
Ionica Oncioiu ◽  
Dan Adrian Popovici ◽  
Hrisanta Cristina Ungureanu ◽  
Florentina Raluca Bîlcan
Keyword(s):  
Real Estate ◽  
Stock Exchange ◽  
Investment Decision ◽  
Moral Dilemmas ◽  
Commercial Real Estate ◽  
Sufficient Information ◽  
Real Estate Industry ◽  
Corporate Social ◽  
High Degree ◽  
The Relationship

The chapter considers a similarity between Maslow's and Corporate Social Responsibilities pyramids. Various groups of stakeholders may have opposite interests in relationship with related companies, generating moral dilemmas. An analysis of organizational and economic accounting patterns in commercial real estate is provided with examples of companies listed to Stock Exchange. These common patterns are in accordance with all professional standards, but still do not offer sufficient information for an informed investment decision of an average investor. The choice of accounting policy is one of the reasons why real estate industry is perceived as a high risk, as a high degree of subjectivity applies through the choices of accounting treatment. Conflicts between stakeholders should be avoided due to the direct impact on a company's development perspectives and value.

On the Relationship between Market Sentiment and Commercial Real Estate Performance—A Textual Analysis Examination

2019 ◽  
Vol 41 (4) ◽  
pp. 605-637 ◽  
Author(s):  
Eli Beracha ◽  
Marcel Lang ◽  
Jochen Hausler
Keyword(s):  
Real Estate ◽  
Textual Analysis ◽  
The United States ◽  
Real Estate Market ◽  
Commercial Real Estate ◽  
Wall Street ◽  
Related Factors ◽  
Market Sentiment ◽  
Bidirectional Relationship ◽  
The Wall Street Journal

We examine whether and the extent to which news-based sentiment, captured by textual analysis, can predict the performance of the private commercial real estate market in the United States. Our results show that sentiment reflected in news abstracts of The Wall Street Journal predicts returns of commercial real estate up to four quarters in advance. These findings are statistically significant and persist even when controlling for other related factors. This suggests that news-based sentiment can serve as an early market indicator. We are the first to examine the bidirectional relationship between sentiment, measured by textual analysis, and the performance of the private U.S. commercial real estate market. The findings contribute to the academic literature, and carry practical implications for real estate professionals.

Characterising the in-plane seismic performance of infill masonry

2016 ◽  
Vol 49 (1) ◽  
pp. 98-115 ◽  
Author(s):  
Kathy Sassun ◽  
Timothy J. Sullivan ◽  
Paolo Morandi ◽  
Donatello Cardone
Keyword(s):  
Earthquake Engineering ◽  
Concrete Block ◽  
The United States ◽  
Cost Estimates ◽  
Masonry Infill ◽  
Masonry Infills ◽  
Repair Costs ◽  
New Information ◽  
Complete Failure ◽  
Infill Masonry

Masonry infills, commonly found in frame buildings throughout Europe and other parts of the world, have performed poorly in past earthquakes, with infill damage endangering lives, causing disruption and significant monetary losses. To characterize the performance of masonry infills, commonly classified as non-structural elements, an extensive set of experimental test data is collected and examined in this work in order to develop fragility functions for the in plane performance of masonry infills. The collected data stems from testing conducted in Europe, the Middle East and the United States and includes solid and hollow clay brick or concrete block infills, constructed to be in contact within either reinforced concrete or steel framing. The results indicate that infill masonry can exhibit first signs of damage at drifts as low as 0.2% but may not suffer complete failure until drifts as high as 2.0%. Furthermore, it is shown that masonry fragility changes significantly according to the type of infill masonry. Subsequently, a short discussion is provided to highlight the potential use of the infill fragility information within non-linear analysis models of masonry infill. Finally, repair cost estimates for infills in Italy are computed using costing-manuals and are compared with cost estimates obtained through consultation with a number of Italian building contractors, with examination of both the median and dispersion in repair costs. It is anticipated that the results of this work will be particularly useful for advanced performance-based earthquake engineering assessments of buildings with masonry infill, providing new information on the in-plane fragility, repair costs and nonlinear modelling of masonry infills.

FACTORS AFFECTING THE MARKET PRICE OF COMMERCIAL REAL ESTATES IN NAIROBI. A CASE STUDY OF HURUMA ESTATE

2017 ◽  
Vol 2 (5) ◽  
pp. 19
Author(s):  
Dan Nduti ◽  
Wambugu Mr.Wambugu
Keyword(s):  
Standard Deviation ◽  
Real Estate ◽  
Market Price ◽  
Commercial Real Estate ◽  
Transport Infrastructure ◽  
Property Value ◽  
Factors Affecting ◽  
The Real Estate ◽  
The Mean ◽  
Social Amenities

Purpose: The study sought to determine the factors affecting the market price of commercial real estates in Nairobi. A case study of Huruma estateMethodology: This study employed descriptive survey design. The target population comprised of both managerial rand non-managerial employees in the real estate agencies. The real estate agencies registered by Kenya Property Developers Association (KPDA) and operating in Huruma area are 69 in number. The study sample comprised of 30% of all real estate firms registered by Kenya Property Developers Association (KPDA) in the region.  Therefore, the sample size is 21 firms. The use of census survey was employed for statistical research, population count or business marketing purposes. Primary information was gathered by use of a Likert scale questionnaireResults: The result displays results of responses regarding the first variable which was rent as determinant of market price of commercial real estate. This finding was supported by an overall responses mean of 3.94 which means that more respondents were agreeing with the statements on this objective in the questionnaire. The responses were also spread from the mean at a 0.779 standard deviation. The second objective was to establish the effect of transport infrastructure on the market price of commercial real estate. The findings show that most of the respondents agreed with most of the statements as support by a mean score of 3.89. The responses were also spread from the mean at a 1.045 standard deviation. The third objective was to establish the effect of security on the market price of commercial real estate. The findings show that most of the respondents agreed with most of the statements as support by a mean score of 3.80. The responses were also spread from the mean at a 1.102 standard deviation. The last objective was to establish the effect of social amenities on the market price of commercial real estate. The findings show that most of the respondents agreed with most of the statements as support by a mean score of 3.77. The responses were also spread from the mean at a 1.056 standard deviation.Unique contribution to theory, practice and policy: The study recommends that investors should invest in a way to ensure fair rent on the tenants so that the worth of such property value is not compromised by their rental charges ensuring the tenants enjoy and experience satisfaction. Adequate transport infrastructure should be ensured in making investment decisions by investors as proper infrastructure increases property value. Security and social amenities should be improved and where necessary increased for such measures are a positive contributor to commercial real property value.Keywords: Market Price, Rent, Transport Infrastructure, Real Estate, Social Amenities, Security 

Relation of Statistically Significant, Abnormal, and Typical WAIS-R VIQ-PIQ Discrepancies to Full Scale IQs

2000 ◽  
Vol 16 (2) ◽  
pp. 107-114 ◽  
Author(s):  
Louis M. Hsu ◽  
Judy Hayman ◽  
Judith Koch ◽  
Debbie Mandell
Keyword(s):  
Graphical Method ◽  
The United States ◽  
Full Scale ◽  
True Score ◽  
Absolute Value ◽  
Normative Population ◽  
The Us ◽  
The Mean ◽  
And Performance ◽  
Quadratic Models

Summary: In the United States' normative population for the WAIS-R, differences (Ds) between persons' verbal and performance IQs (VIQs and PIQs) tend to increase with an increase in full scale IQs (FSIQs). This suggests that norm-referenced interpretations of Ds should take FSIQs into account. Two new graphs are presented to facilitate this type of interpretation. One of these graphs estimates the mean of absolute values of D (called typical D) at each FSIQ level of the US normative population. The other graph estimates the absolute value of D that is exceeded only 5% of the time (called abnormal D) at each FSIQ level of this population. A graph for the identification of conventional “statistically significant Ds” (also called “reliable Ds”) is also presented. A reliable D is defined in the context of classical true score theory as an absolute D that is unlikely (p < .05) to be exceeded by a person whose true VIQ and PIQ are equal. As conventionally defined reliable Ds do not depend on the FSIQ. The graphs of typical and abnormal Ds are based on quadratic models of the relation of sizes of Ds to FSIQs. These models are generalizations of models described in Hsu (1996) . The new graphical method of identifying Abnormal Ds is compared to the conventional Payne-Jones method of identifying these Ds. Implications of the three juxtaposed graphs for the interpretation of VIQ-PIQ differences are discussed.

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