Lodging Real Estate Finance: Securitization

Commercial Mortgage Backed Securities (CMBSs) introduced to the U.S. lodging industry in the early 1990’s were a panacea during a period of severe shortage of debt capital. These instruments changed commercial real estate capital markets by providing flexibility and liquidity to an otherwise illiquid investment As a relatively new form of financing to the lodging industry, the mechanics of securitization, the types of CMBS investments, and their structure are not well understood. The article illustrates the process of securitization and its importance as a significant source of debt financing to the lodging industry

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.

Industry Expresses Attitudes Toward Accounting, Finance Curricula

A survey of hospitality financial executives provides guidance for those planning accounting and finance curricula for schools of hospitality management. The authors discuss the results of their survey sponsored by the Association of Hospitality Financial Management Educators.

A Comparative Analysis of Corporate Finance in the United States and Japan From 1880 to 1930

This study explained the diversity of corporate financial practices in two nations. Existing studies have emphasized the reliance on equity finance in U.S. firms and bank loans in Japanese firms. In fact, patterns of corporate finance were much more complex. Financial institutions, which were created by national economic policy and regulation, affected corporate financial practices, but corporate financial practices often differed from what policymakers expected. Differences in corporate financial practices between nations also reflected differences in the mixture of industries in each nation. Many factors such as the amount of fixed capital, the process of production, the level of risk, the degree of innovation, and the importance of the industry in the national economy affected corporate financial practices. In addition, corporate financial practices within each nation differed from firm to firm due to managers’ considerations about stock ownership, which would affect their control power; corporate finance was closely related to control over management through ownership. To explain these complexities of corporate financial practices, the study linked corporate finance with the development of financial institutions in the United States and in Japan. While financial institutions affected corporate financial practices, the response of the firms to financial institutions and opportunities were diverse. The study also attempted to grasp variations in corporate financial practices by dealing with companies in three sectors: railroads, public utilities, and manufacturing. Finally, the study examined the structure of firm ownership. Contradictory to the widely held belief that U.S. firms distributed securities more widely to the public than did Japanese firms, many large American firms remained closely held, while some Japanese counterparts built publicly-held corporations.

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.

Solidarity Finance to Link Investors with Businesses

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Colorado's Piceance Basin: Variation in the local public finance effects of oil and gas development

A large increase in natural gas production occurred in western Colorado’s Piceance basin in the mid- to late-2000s, generating a surge in population, economic activity, and heavy truck traffic in this rural region. We describe the fiscal effects related to this development for two county governments: Garfield and Rio Blanco, and two city governments: Grand Junction and Rifle. Counties maintain rural road networks in Colorado, and Garfield County’s ability to fashion agreements with operators to repair roads damaged during operations helped prevent the types of large new costs seen in Rio Blanco County, a neighboring county with less government capacity and where such agreements were not made. Rifle and Grand Junction experienced substantial oil- and gas-driven population growth, with greater challenges in the smaller, more isolated, and less economically diverse city of Rifle. Lessons from this case study include the value of crafting road maintenance agreements, fiscal risks for small and geographically isolated communities experiencing rapid population growth, challenges associated with limited infrastructure, and the desirability of flexibility in the allocation of oil- and gas-related revenue.

Essays in Macro Finance

I study the link between capital markets and sources of macroeconomic risk. In chapter 1 I show that expected inflation risk is priced in the cross section of stock returns even after controlling for cash flow growth and volatility risks. Motivated by this evidence I study a long run risk model with a built-in inflation non-neutrality channel that allows me to decompose the real stochastic discount factor into news about current and expected cash flow growth, news about expected inflation and news about volatility. The model can successfully price a broad menu of assets and provides a setting for analyzing cross sectional variation in expected inflation risk premium. For industries like retail and durable goods inflation risk can account for nearly a third of the overall risk premium while the energy industry and a broad commodity index act like inflation hedges. Nominal bonds are exposed to expected inflation risk and have inflation premiums that increase with bond maturity. The price of expected inflation risk was very high during the 70's and 80's, but has come down a lot since being very close to zero over the past decade. On average, the expected inflation price of risk is negative, consistent with the view that periods of high inflation represent a "bad" state of the world and are associated with low economic growth and poor stock market performance. In chapter 2 I look at the way capital markets react to predetermined macroeconomic announcements. I document significantly higher excess returns on the US stock market on macro release dates as compared to days when no macroeconomic news hit the market. Almost the entire equity premium since 1997 is being realized on days when macroeconomic news are released. At high frequency, there is a pattern of returns increasing in the hours prior to the pre-determined announcement time, peaking around the time of the announcement and dropping thereafter.

Finance past, finance future: a brief exploration of the evolution of financial practices

As we work our way through the latest financial crisis, politicians seem both powerless to act convincingly and unable to craft from the welter of diverse and antagonistic narratives a coherent and convincing vision of the future. In this article, we argue that a temporal lens brings clarity to such confusion, and that thinking in terms of time and reflecting on privileged temporal structures helps to highlight underlying assumptions and distinguish different narratives from one another. We begin by articulating our understanding of temporality, and we proceed to apply this to the evolution of financial practice during different historical epochs as recently delineated by Gordon (2012). We argue that the principles of finance were effectively in place by the eighteenth century and that consequent developments are best conceptualized as phases in which one particular aspect is intensified. We find that in different historical periods, the temporal intensification associated with specific models of finance shifts, over history, from the past to the present to the future. We argue that a quite idiosyncratic understanding of the future has been intensified in the present phase, what we refer to as proximal future, and we explain how this has come to be. We then consider the ethical consequences of privileging an intensification of proximal future before mapping an alternative model centred on intensifying distal future, highlighting early signs of its potential emergence in the shadows of our present.

Governing Big Data: The Political Economy of Power, Knowledge and Consumer Finance in the Digital Age

This dissertation offers a critical international political economy (IPE) analysis of the ways in which consumer information has been governed throughout the formal history of consumer finance (1840 – present). Drawing primarily on the United States, this project problematizes the notion of consumer financial big data as a ‘new era’ by tracing its roots historically from late nineteenth century through to the present. Using a qualitative case study approach, this project applies a unique theoretical framework to three instances of governance in consumer credit big data. Throughout, the historically specific means used to govern consumer credit data are rooted in dominant ideas, institutions and material factors.

Islamic Infrastructure Finance and Sustainable Development Goals

This was a very interesting discussion with the pioneers of Islamic finance regarding infrastructure finance and the sustainable development goals.