A critical review of methodologies for measuring rental depreciation applied to UK commercial real estate

Real estate depreciation continues to be a critical issue for investors and the appraisal profession in the UK in the 1990s. Depreciation-sensitive cash flow models have been developed, but there is a real need to develop further empirical methodologies to determine rental depreciation rates for input into these models. Although building quality has been found to be an important explanatory variable in depreciation it is very difficult to incorporate it into such models or to analyse it retrospectively. It is essential to examine previous depreciation research from real estate and economics in the USA and UK to understand the issues in constructing a valid and pragmatic way of calculating rental depreciation. Distinguishing between 'depreciation' and 'obsolescence' is important, and the pattern of depreciation in any study can be influenced by such factors as the type (longitudinal or crosssectional) and timing of the study, and the market state. Longitudinal studies can analyse change more directly than cross-sectional studies. Any methodology for calculating rental depreciation rate should be formulated in the context of such issues as 'censored sample bias', 'lemons' and 'filtering', which have been highlighted in key US literature from the field of economic depreciation. Property depreciation studies in the UK have tended to overlook this literature, however. Although data limitations and constraints reduce the ability of empirical property depreciation work in the UK to consider these issues fully, 'averaging' techniques and ordinary least squares (OLS) regression can both provide a consistent way of calculating rental depreciation rates within a 'cohort' framework.

The performance effects of composition changes on sector specific stock indices: The case of European listed real estate

This paper examines the impact of changes in the composition of real estate stock indices, considering companies both joining and leaving the indices. Stocks that are newly included not only see a short-term increase in their share price, but trading volumes increase in a permanent fashion following the event. This highlights the importance of indices in not only a benchmarking context but also in enhancing investor awareness and aiding liquidity. By contrast, as anticipated, the share prices of firms removed from indices fall around the time of the index change. The fact that the changes in share prices, either upwards for index inclusions or downwards for deletions, are generally not reversed, would indicate that the movements are not purely due to price pressure, but rather are more consistent with the information content hypothesis. There is no evidence, however, that index changes significantly affect the volatility of price changes or their operating performances as measured by their earnings per share.

1992 census of financial, insurance, and real estate industries.

[v. 1] Geographic area series (FC92-A-1) -- [v. 2] Nonemployer statistics series (FC92-N-1) -- [v. 3] Subject series: Establishment and firm size (FC92-S-1) -- [v. 4] Sources of revenue (FC92-S-2) -- [v. 5] Miscellaneous subjects (FC92-S-3).

Occupational employment statistics : mining, construction, and finance-insurance-real estate.

"June 1993."

1992 census of financial, insurance, and real estate industries.

"FC92-A-1."

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.

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.

Findings from the 2015 Institutional Real Estate Capital Allocations Monitor

Since 2013, the Baker Program in Real Estate and Hodes Weill & Associates have co-sponsored the Institutional Real Estate Capital Allocations Monitor (the “Allocations Monitor”). The Allocations Monitor was created to conduct a comprehensive annual assessment of institutional allocations to real estate investments through analyzing trends and collecting survey responses of institutional portfolios and allocations by region, type, and size of institution. The Allocations Monitor reports on the role of real estate investments in institutional portfolios, and the impact of institutional allocation trends on the investment management industry.

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.

Joint Leverage and Maturity Choices in Real Estate Firms: The Role of the REIT Status

We explore the interdependence of leverage and debt maturity choices in Real Estate Investment Trusts (REITs) and unregulated listed real estate investment companies in the U.S. for the period 1973-2011. We find that the leverage and maturity choices of all listed real estate firms are interdependent, but in contrast to industrial firms, they are not made simultaneously. Across the different types of real estate firms considered, we find substantial differences in the nature of the relationship between leverage and maturity. Leverage determines maturity in non-REITs, whereas maturity is a determinant of leverage in REITs. We suggest that the observed differences reflect the effects of the REIT regulation, rather than solely being a function of real estate as the underlying asset class. We also present novel evidence that the relationship between leverage and maturity in both firm types can be used to moderate the effects of other exogenous financing policies.

Real estate agency practice and profitability : an analysis of house sales and agency profitability in Sydney

Large cities provide a broad range of residential property types, as well as a range of socio-economic locations. This results in a significant variation in residential property prices across both the city itself and the individual suburbs. The only constant across such a diverse range of residential property is the need for the majority of residential property owners to employ the services of a real estate agent to sell their property or to purchase a residential property. This paper will analyse the Sydney residential property market over the period 1994 to 2002 to determine the change in real estate offices numbers over the period, the profitability of real estate agency offices based on the residential house price performance of houses and units in these specific locations and the extent of changing residential house prices on agency profitability. Suburbs have been selected to provide a full range of housing types, socio-economic areas, older established and developing residential suburbs and location from the

Competitiveness factors : a study of the real estate market in China

The execution of 'macro-adjustment' policies by the central government to cool down the overheated real estate market in the past few years has created an unfavourable operating environment for real estate developers in Mainland China. Developers need to rethink their business model and create a new form of competitive advantage in order to survive. Despite this, research into the factors that influence the competitiveness of the real estate market in China has been limited. Therefore, a survey of 58 real estate actitioners, experts and academics in China was conducted to probe opinion on the factors that influence competitiveness in real estate firms in China. Survey results suggest that the developer's financial competency, market coverage and management competencies are vital to its competitiveness. Findings also highlight the importance of industry ecognition/award, share in different types of property sales/development projects, profit after tax, growth rate of their securities price, and diversification of R&D in reflecting the competitiveness of real estate developers in China. The findings provide an insight into the factors that influence competitiveness in China's real estate market and also assist practitioners to formulate competitiveness improvement strategies.

The role of U.S. timberland in real estate portfolios

Timberland is seen as a long-term investment which has recently received increased institutional investor attention in many countries and potentially provides added value in a mixed-asset portfolio. Using the National Council of Real Estate Investment Fiduciaries (NCREIF) timberland series, this paper analyses the risk-adjusted performance and portfolio diversification benefits of timberland in the United States over the period of 1987-2007. U.S. timberland is seen to have been a strongly performed asset class with significant portfolio diversification benefits over this period; with a significant portfolio role separate to that of real estate. However, recent years have seen reduced risk-adjusted returns, with some loss of portfolio diversification benefits of timberland with stocks and real estate. Global drivers are likely to see increased future demand for timberland investment.

The impact of spin on Australian real estate journalism : a Queensland study

Regardless of ‘bear’ or ‘bull’ markets, the great Australian dream remains to own your own home. Central to this dream of home ownership is unflagging interest in the property market, reflected in bulging real estate news sections of newspapers in South East Queensland, the focus area for this thesis research. While there has been much scholarly research into other areas of public relations spin and its impact on news-gathering processes, there appears to be next to no research on real estate spin, how it is prepared and by whom, and journalism’s attitude to and the managing of the spin. Real estate spin remains an under-researched topic requiring further investigation not only in South East Queensland but Australia-wide given the ‘big bucks’ allotted to the promotion of real estate and the income it generates for news media outlets, particularly newspapers. This thesis examines the influence of public relations practitioners and journalists specialising in real estate spin through interviews, content analysis, and how real estate spin envelopes itself in today’s society. From content analyses and observations of journalism in the real estate rounds of the two major newspapers in South East Queensland, I found that journalists were using massive quantities of real estate spin supplied by PR practitioners and other associated industry sources. This spin is supplanting investigative newsroom journalism, thus allowing newspapers to operate with minimal staffing levels yet still able to publish large weekly real estate news sections. My research also revealed growing commercialisation of real estate news through increasing outsourcing of journalistic work to a writing bureau, which could jeopardise both the professions of journalism and public relations in the future.