Securitization of Lodging Real Estate Finance

In the early 1990s, the U.S. lodging industry witnessed a severe shortage of debt capital as traditional lenders exited the market. During this period hotel lending was revolutionized by the emergence of real estate debt securities. The author discusses key factors which have affected the growth and development of commercial mortgage backed securities and their changing role as a significant source of debt capital to the lodging industry.

Innovative real estate development finance – evidence from Europe

The authors would like to thank the Royal Institution of Chartered Surveyors (RICS) for their financial support of the project and the numerous respondents who gave so freely of their time.

Real Estate Research in Europe

Peer reviewed

Risk factors of European non-listed real estate fund returns

Acknowledgements: We thank INREV (the European Association for Investors in Non-Listed Real Estate Vehicles) for funding a previous version of this research and providing non-listed fund data as well as very useful comments. This version is published as Delfim, J.-C. and Hoesli, M., 2015, Risk Factor Analysis of European Non-Listed Real Estate Funds, Amsterdam: INREV. The usual disclaimer applies. We also thank three anonymous reviewers and the guest editor, Graeme Newell, for insightful remarks.

Technology is Set to Change Real Estate Forever

Major developments in the technological environment can become commonplace very quickly. They are now impacting upon a broad range of information-based service sectors, as high growth Internet-based firms, such as Google, Amazon, Facebook and Airbnb, and financial technology (Fintech) start-ups expand their product portfolios into new markets. Real estate is one of the information-based service sectors that is currently being impacted by this new type of competitor and the broad range of disruptive digital technologies that have emerged. Due to the vast troves of data that these Internet firms have at their disposal and their asset-light (cloud-based) structures, they are able to offer highly-targeted products at much lower costs than conventional brick-and-mortar companies.

Living with Terminal Capitalization Rates: A Look at Real Estate Valuation Model Parameter Setting

This paper examines assumptions about future prices used in real estate applications of DCF models. We confirm both the widespread reliance on an ad hoc rule of increasing period-zero capitalization rates by 50 to 100 basis points to obtain terminal capitalization rates and the inability of the rule to project future real estate pricing. To understand how investors form expectations about future prices, we model the spread between the contemporaneously period-zero going-in and terminal capitalization rates and the spread between terminal rates assigned in period zero and going-in rates assigned in period N. Our regression results confirm statistical relationships between the terminal and next holding period going-in capitalization rate spread and the period-zero discount rate, although other economically significant variables are statistically insignificant. Linking terminal capitalization rates by assumption to going-in capitalization rates implies investors view future real estate pricing with myopic expectations. We discuss alternative specifications devoid of such linkage that align more with a rational expectations view of future real estate pricing.

2016 Real Estate Industry Leader Profile: MaryAnne Gilmartin

[Excerpt] Cornell University and the Baker Program in Real Estate are pleased to announce the 2016 Real Estate Industry Leader Award recipient: MaryAnne Gilmartin, President & CEO of Forest City Ratner Companies. MaryAnne’s leadership in the real estate industry has made a powerful and positive impact on society as a driving force behind several of the highest-profile, largest-scale additions to the urban landscape of New York City.

Real Estate Case Competitions

Real Estate is by nature a hands-on business in which real-world experience and new challenges are the best teacher. With this in mind, graduate real estate education has embraced case competitions as a way to apply education-based learning to real world project simulation. In recent years, teams from Cornell have consistently stood out in these competitions, making impressions and forming relationships that they will carry with them over their careers. In this issue of the Review, we recognize a composite of previous winners of the four major real estate-focused case competitions, and look back on what was a very successful year for case competition teams at Cornell. The case competitions draw students from all the constituent programs of Real Estate at Cornell, including the Baker Program, Johnson Graduate School of Management, City and Regional Planning, Architecture, and Landscape Architecture.

Autonomous Vehicles and Commercial Real Estate

Hardly a day goes by without the release of a handful of news stories about autonomous vehicles (or AVs for short). The proverbial “tipping point” of awareness has been reached in the public consciousness as AV technology is quickly becoming the new focus of firms from Silicon Valley to Detroit and beyond. Automation has, and will continue to have far-reaching implications for many human activities, but for driving, the technology is here. Google has been in talks with automaker Ford (1), Elon Musk has declared that Tesla will have the appropriate technology in two years (2), GM is paired-up with Lyft (3), Uber is in development-mode (4), Microsoft and Volvo have announced a partnership (5), Apple has been piloting its top-secret project “Titan” (6), Toyota is working on its own technology (7), as is BMW (8). Audi (9) made a splash by sending a driverless A7 concept car 550 miles from San Francisco to Las Vegas just in time to roll-into the 2016 Consumer Electronics Show. Clearly, the race is on.

Manipulation in U.S. REIT Investment Performance Evaluation: Empirical Evidence

We investigate whether Real Estate Investment Trust (REIT) managers actively manipulate performance measures in spite of the strict regulation under the REIT regime. We provide empirical evidence that is consistent with this hypothesis. Specifically, manipulation strategies may rely on the opportunistic use of leverage. However, manipulation does not appear to be uniform across REIT sectors and seems to become more common as the level of competition in the underlying property sector increases. We employ a set of commonly used traditional performance measures and a recently developed manipulation-proof measure (MPPM, Goetzmann, Ingersoll, Spiegel, and Welch (2007)) to evaluate the performance of 147 REITs from seven different property sectors over the period 1991-2009. Our findings suggest that the existing REIT regulation may fail to mitigate a substantial agency conflict and that investors can benefit from evaluating return information carefully in order to avoid potentially manipulative funds.

Auction sale to close estate of Mary P. Chrystie, dec'd, 23 building plots, also Harlem River water front, near Morris Heights stations, N.Y. Central and N.Y. & Northern railroads : Wednesday, November 22d, 1893, at 12 o'clock noon at no. 111 Broadway, New York Real Estate salesroom : by order of Morris & Steele, attorneys ... New York City /

Street map showing properties to be sold, existing buildings (some with owners' names), and railroad stations.

Foreign direct investment motives and location decision factors under economic recession: Three cases of Finnish FDI in Portugal

The purpose of this thesis was to study how uncertainty in economic conditions of the FDI host country affects location decision of an investment, and what kinds of motives are behind the investment decision to a country in economic recession, in this case Portugal. The country has attracted foreign direct investment steadily, but it is evident that most multinational firms and investors tend to be more interested in emerging economies in general. The aim was to find out also which host country specific advantages are important in this kind of cross-border investment and which factors are important for an FDI to succeed under economic uncertainty at the host country. The study was done by analyzing three Finnish case companies: a private equity and real estate investment firm Pontos Group, A wave energy technology research and development company AW Energy and NSN, Nokia Solutions and Networks, a global telecommunications company. The research was done empirically, by interviewing experts on the subject, mainly persons representing these companies. In addition relevant articles, journals and content from case companies’ web-pages is used for the desk research regarding the topic. The results of this thesis showed that the FDIs with strategic asset-seeking investments seem most profitable FDI types under uncertain economic conditions. This kind of investments aim to strengthen the company’s long-term strategy, including the time after recession. Firm-specific ownership advantages that bring competitive advantage proved out to be important under these circumstances, as well as first-mover advantages and externally created assets such as government promotional policies regarding FDI incentives. Also the location was considered suitable for resource- or efficiency seeking motives, based on the lowered price level at the host country. Problems were related mainly to financing, but as foreign companies receive financing usually from their home countries, the economic recession of the host country does not have significant effect for FDI decision, according to this study

Improving the Efficiency of the South Carolina Real Estate Commission's License Renewal Process

The goal of this project is to increase the amount of successful real estate license renewals while reducing the disruption caused by manual processing and calls for assistance with renewals and technical issues. The data utilized in this project will demonstrate that the Real Estate Commission renewal process can be improved by utilizing electronic resources such as more detailed website information and repeat e-mail notices, through modifications to the online renewal process to reduce applicant error, and by increasing the visibility of online renewal log-in instructions while decreasing the visibility and use of mail-in applications.

Dislodgement of commercial property public debt markets : the case of U.S. and Australia

The paper investigates if there are any discernible trends in the U.S. and Australian commercial property public debt markets with the onset of the global financial crisis (GFC). Commercial mortgage-backed securities and unsecured bonds issued by real estate investment trusts for the period 2000 to Q3:2009 are reviewed. It is shown that events in the equity markets have an impact on the pricing of these two instruments. Furthermore, the impact of subdued activity in these financing instruments on the commercial property market is discussed.