Short-Term and Long-Term Discount Rates for Commercial Real Estate

2019 ◽  
Author(s):  
Carmelo Giaccotto ◽  
Erasmo Giambona ◽  
Yanhui Zhao
Keyword(s):  
Real Estate ◽  
Commercial Real Estate ◽  
Discount Rates ◽  
Short Term

Challenged from the Outside

2021 ◽  
pp. 216-234
Author(s):  
Daniel R. Garodnick
Keyword(s):  
Real Estate ◽  
Short Term

This chapter discusses how residents of Stuyvesant Town received a colorful missive from Gerald Guterman, a real-estate speculator, which attacked and directly undermined the Tenants Association and Brookfield, the new partner of the complex buildings. It explores Guterman's plan of converting the Stuy Town property to a co-op and selling units to tenants at $130,000 per unit. It also points out how Guterman's plan sparked an anxious debate about who would become the owner of units that were not sold to the tenants who lived in them. The chapter mentions Guterman's intention to sell occupied rent-stabilized units to individual outside investors, a scenario most longtime rent-stabilized renters objected to. It also elaborates Daniel Garodnick's concerns on Guterman's model of short-term ownership that lacked any long-term affordability protections.

scholarly journals THE CHANGING NATURE OF TRANSACTIONS ACTIVITY AND LIQUIDITY IN UK COMMERCIAL PROPERTY

2016 ◽  
Vol 20 (4) ◽  
pp. 384-396 ◽  
Author(s):  
Colin JONES ◽  
Nicola LIVINGSTONE ◽  
Neil DUNSE
Keyword(s):  
Real Estate ◽  
Real Estate Market ◽  
Commercial Real Estate ◽  
Active Management ◽  
Urban Change ◽  
Commercial Property ◽  
Causality Tests ◽  
One Year ◽  
The Uk

This paper examines changing transactions activity and liquidity over thirty years in the UK. It reviews the multi-dimensional concept of liquidity analysis and demonstrates that it is not just a function of the time necessary to sell an asset, a typical real estate perspective. Instead liquidity is defined in terms of transactions activity. The paper then hypothesises that urban change and an increased information base has contributed to a more active management of real estate portfolios and increased liquidity. Superimposed on this long term trend it is also hypothesised that property cycles create rise and falls in liquidity. The empirical core quantifies the changing nature of liquidity and transactions activity over thirty years from 1981 based on the IPD database. It confirms the hypothesised substantial rise in liquidity but increasing variability in the level of transactions activity from one year to the next queries the cyclical liquidity hypothesis. This is supported by causality tests. Over the last two decades a short term opportunity driven real estate investment culture appears to have emerged stimulated by the increased churn of properties, partly the consequence of the pace of urban change. It has brought greater volatility to the commercial real estate market.

Feedback trading strategies in international real estate markets

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Chrysanthi Balomenou ◽  
Vassilios Babalos ◽  
Dimitrios Vortelinos ◽  
Athanasios Koulakiotis
Keyword(s):  
Hong Kong ◽  
Real Estate ◽  
Short Term ◽  
Content Type ◽  
Real Estate Markets ◽  
The Real Estate ◽  
The Uk ◽  
The Impact ◽  
Feedback Trading

Purpose Motivated by recent evidence that securitized real estate returns exhibit higher levels of predictability than stock market returns and that feedback trading (FT) can induce returns autocorrelation and market volatility, the purpose of this study is to examine the impact of FT strategies on long-term market volatility of eight international real estate markets (UK, Germany, France, Italy, Sweden, Australia, Japan and Hong Kong). Design/methodology/approach Assuming that the return autocorrelation may vary over time and the impact of positive feedback trading (PFT) or negative feedback trading (NFT) could be a function of return volatility, the authors use a combination of a FT model and a fractionally integrated Generalized AutoRegressive Conditional Heteroskedasticity (GARCH) model. Findings The results are mixed, revealing that both PFT and NFT strategies persist. Specifically, the authors detect PFT in the real estate markets of France, Hong Kong and Italy as opposed to the real estate markets of Australia, Germany, Japan and Sweden where NFT was present. A noteworthy exception is the UK real estate market, with important and rational FT strategies to sustain. With respect to the long-term volatility persistence, this seems to capture the mean reversion of real estate returns in the UK and Hong Kong markets. In general, the results are not consistent with those reported in previous studies because NFT dominates PFT in the majority of real estate markets under consideration. Originality/value The main contribution of this study is the investigation of the link between short-term PFT or NFT and long-term volatility in eight international real estate markets, symmetrically. Particular attention has been given to the link between short-term FT and long-term volatility, by means of a fractionally integrated GARCH approach, a symmetric one. Moreover, investigating the relationship between returns’ volatility and investors’ strategies based on FT entails significant implications because real estate assets offer a good alternative investment for many investors and speculators.

Factors affecting financial leveraging for BSE listed real estate development companies in India

2018 ◽  
Vol 23 (3) ◽  
pp. 274-294
Author(s):  
Rakesh Kumar Sharma
Keyword(s):  
Real Estate ◽  
Capital Structure ◽  
Short Term ◽  
Firm Level ◽  
Content Type ◽  
Factors Affecting ◽  
Tax Shield ◽  
Total Debt ◽  
Real Estate Sector

PurposeThe real estate sector in India has assumed growing importance with the liberalisation of the economy. Developments in the real estate sector are being influenced by the developments in the retail, hospitality and entertainment (e.g. hotels, resorts and cinema theatres) segment, economic services (e.g. hospitals, schools) and information technology-enabled services (such as call centres), and vice versa. This paper aims to study the determinants of capital structure by taking into account 125 major Bombay Stock Exchange (BSE) listed real estate companies selected on the basis of their market capitalisation.Design/methodology/approachTo discover what determines capital structure, nine firm level explanatory variables (profitability-EBIT margin, return on assets, earnings volatility, non-debt tax shield, tangibility, size, growth, age debt service ratio and tax shield) were selected and regressed against the appropriate capital structure measures, namely, total debt to total assets, long-term debts to total assets, short-term debts to total assets, total liabilities to total liabilities plus equity, total debt to capital used and total debt to total liabilities plus equity. A sample of 125 real estate companies was taken and secondary data were collected. Consequently, multivariate regression analysis was made based on financial statement data of the selected companies over the study period of 2009-2015.FindingsThe major findings of the study indicated that profitability, size, age, debt service capacity growth and tax shield variables are the significant firm-level determinants.Research limitations/implicationsThe present study is carried out by taking data of only 25 companies listed on the BSE and time period covered from 2009 from 2015. Time period and sample size may be limitations of the current study.Practical implicationsThe present study is an empirical analysis of the determinants of leverage of real estate sector in India with most recent available data. Different regression equations have been formed to develop the models using firm-specific determinants and different measures of leverage or capital structure. Data were regressed using SPSS application software, and the resulting (or obtained) regression outputs are analysed. This study will help the Indian real estate companies to the know the impact of different variables while raising short-term and long-term loans.Social implicationsThe current study will benefit all stakeholders of society who are fascinated to be acquainted with the financing of real estate companies and the factors affecting long-term and short-term financing of this sector. Specifically, public engrossed in different modes of investment and financial institution will be the prime gainers.Originality/valueThe present study has been completed using authentic data from the annual reports and database. This study uses explanatory variables and different measures of leverage which were limited in use in previous studies. Moreover, this research is a comprehensive study that deals with developing different regression models by using diverse measures of leverage.

Legal Construction of Employer Payment Bond System in Engineering Management

2012 ◽  
Vol 174-177 ◽  
pp. 3339-3342
Author(s):  
Jia De Yuan
Keyword(s):  
Real Estate ◽  
House Price ◽  
Engineering Management ◽  
Short Term ◽  
Construction Enterprise ◽  
Wide Range ◽  
Bond System ◽  
Potential Risks ◽  
Transfer Potential

With the rational regression of house price and the decline in volume of real estate transactions across the country, both real estate development enterprise and construction enterprise face a series of fund shortage in the short term, or even medium-to-long term. Because construction enterprise has a lot of workers , lack of funding leads directly to a wide range of negative social effects. How to make construction enterprise avoid and transfer potential risks effectively? the resolutions include revising the existing laws, consolidating the project priorities of No. 286 clause of contract law, endowing clearly the contractor with the lien, establishing practical employer payment bond system.

scholarly journals International Real Estate Review

2014 ◽  
Vol 17 (3) ◽  
pp. 359-394
Author(s):  
Paul Gallimore ◽  
◽  
J. Andrew Hansz ◽  
Wikrom Prombutr ◽  
Ying Zhang ◽  
...  
Keyword(s):  
Real Estate ◽  
Portfolio Diversification ◽  
Portfolio Performance ◽  
Short Term ◽  
Vector Autoregressive ◽  
Real Estate Markets ◽  
Market Portfolio ◽  
Cointegration Tests ◽  
Causality Tests

We investigate long-term cointegrative and short-term causal relations among seven U.S. sectoral REITs. First, cointegration tests identify one long-term cointegrative relation among five of the sectors, which suggests that two of the sectors are outside the cointegrative space. Second, short-term Granger causality tests identify three leading and two following cointegrated sectors. Third, a proposed vector autoregressive model indicates that a stronger cointegrating effect is induced by declining real estate markets and a multivariate sensitivity regression model shows that unexpected inflation significantly and negatively influences the cointegrative disequilibrium. Lastly, our cointegration-based portfolio performance analyses show that the inferior performance of the all-sector market portfolio stems from containing the redundant cointegrated sectors which shatter portfolio diversification.

scholarly journals Chasing Housing Prices?

2012 ◽  
Vol 28 (2) ◽  
pp. 237 ◽  
Author(s):  
Allen Atkins ◽  
Kevin C.H. Chiang ◽  
Ming-Long Lee
Keyword(s):  
Real Estate ◽  
Housing Prices ◽  
Commercial Real Estate ◽  
The Real Estate ◽  
Value Stocks ◽  
The Future ◽  
Asset Class ◽  
Asset Classes ◽  
Or Organization

If a person or organization is planning to buy real estate in the future but is unable or unwilling to buy it now, how can they best hedge this purchase? In what class of asset should they invest their money until they are ready to purchase the real estate? This paper uses Monte Carlo simulation and bootstrap techniques to investigate the effectiveness of using traditional asset classes in managing the long-term risks associated with the future purchase of real estate. We find that the best purchase early hedge for both residential and commercial real estate is small value stocks. Small value stocks would be the most likely to provide returns at least as good as real estate and they would be least likely to suffer losses relative to real estate. The effectiveness of the hedge increases the longer the time horizon of the investor. Large value stocks and equity REITs are also quite good but not as good as small value stocks. Other asset classes are not nearly as effective. The least effective asset class is T-Bills.

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