Thesis: S.M. in Real Estate Development, Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate, 2018. / Cataloged from PDF version of thesis. / Includes bibliographical references (pages 58-61). / Smart buildings have grown from an increase in digital technologies that can sense, recognize and verify the experiences of the building and its inhabitants. Nascent literature has identified what it means to be considered smart. Buildings must respond to all three components of systems, performance, and service and has to have the following components: a) Smartness and technology awareness, b) economic and cost efficiency, c) personal and social sensitivity and d) environmental responsiveness. Yet, it is unclear whether these systems have any value to the users or its owners. This thesis studies the economic impact of Smart, Connected and Green buildings upon rents and transaction prices. Using numerous data sources, we identify buildings that offer at least one so-called "smart" amenity and link them with the building's achieved rent and transactions prices as well as to other so-called "innovation" amenities, like greenness and or fiber-lit connectivity. Results documented in this study suggest that buildings that offer a more integral solution (i.e. buildings that are Smart, Connected and Green) have a premium in both rents and transaction prices over similar office products. While products that offer a more disintegrated solution have a smaller premium or even no incremental value premium, with the exception of green only buildings that offers a premium by themselves. This study contributes to the vast literature on real estate innovation but explores particularly the recent commercial office products that are Smart Buildings. / by Alfredo Keitaro Bando Hano. / S.M. in Real Estate Development

Thesis (S.M.)--Massachusetts Institute of Technology, Program in Real Estate Development in Conjunction with the Center for Real Estate, 2009. / This electronic version was submitted by the student author. The certified thesis is available in the Institute Archives and Special Collections. / Cataloged from student submitted PDF version of thesis. / Includes bibliographical references (p. 71-73). / Within commercial real estate, women are not as likely as men to achieve senior-level executive positions. Commercial real estate has been slow to change in terms of achieving gender parity, and though improvements have been made in the status of women in leadership positions, gender-based disparity still exists. The purpose of this study is to shed more light on the facilitators and barriers to career advancement of women in commercial real estate who have achieved top-level leadership positions. Thirteen women holding senior-level management positions in the commercial real estate industry were interviewed regarding facilitators to career advancement and notable barriers, the role of mentors, and work-life balance issues. What route did these women take to the top and what did they encounter along the way? Each story told involved some combination of diligent work, the pursuit of opportunities, and the will to succeed. The results from this study supported much of the research that has been done on this topic. Gender barriers, biases, and stereotypes were met along the way, but these women succeeded in spite of these barriers. The women attribute their success to facilitators of career advancement such as a strong work ethic, relationship building and risk-taking. While this thesis shed light on the careers of women in commercial real estate, it also raises at least two questions. How similar are the career paths of women and men in commercial real estate in terms of facilitators and barriers to advancement? Does the glass ceiling appear thin or non-existent once female executives are above it? / by Jodie Copp Poirier. / S.M.

Thesis: S.M. in Real Estate Development, Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate, 2015. / Cataloged from PDF version of thesis. / Includes bibliographical references (pages 52-53). / This thesis investigates flexibilities in commercial lab buildings with the help of the real options theory. The qualitative component of the thesis explores the development of the lab building as a building typology and its relationship to economic value creation for developers. It also investigates various strategies employed by developers during the design and development of lab buildings to hedge against the downside risk. The quantitative component builds upon that hypothetical lab building development case and creates a Real Options case as a framework for applying and valuing flexibility in this complex building type. Through this demonstration, valuation of flexibility employed in the current practice is derived. / by Kartik Shah. / S.M. in Real Estate Development

Thesis: S.M. in Real Estate Development, Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate, 2016. / Cataloged from PDF version of thesis. / Includes bibliographical references (pages 60-61). / The current practice of building is a slow-moving, fragmented, and conflicted industry that operates on a variety of scales, emotions, professions and realities. The current practice of making buildings has the potential for innovation to align interests among otherwise adverse parties. Buildings are complex and dynamic physical realities, operating as economic, social, and emotional constructs in the urban environment. Buildings also constitute the single unifying element upon which all stakeholders in the process place their expectations. Financial, spatial, emotional, and civic success hangs in the balance of a zero-sum process. The background of the development process is presented, focusing on the current practices of real estate development and architecture and highlighting the critical relationship between each entity. Following the description of the underlying relationships and processes, three case studies of actual practices are presented as innovative and unique alternatives to the current process of building. Each case study outlines a potential integration and convergence of real estate development and architectural design, providing a new viewpoint from which to analyze current practice. Five principles of excellent development emerge from the case studies as decisive benchmarks to analyze the building process. Following initial background information and explicit understanding of current processes and potential innovative alternatives, this thesis proposes a new practice model of integrated real estate development and architectural design, the Convergent Model, which seeks to simplify the building process and align economic, social, and cultural goals within a truly interdisciplinary team of professionals. The process is a potential solution to the compounded and interconnected issues of current practice and is more likely to meet the five principles of excellent development. Finally, the Convergent Model is put into practice through a hypothetical demonstration project. The demonstration project consists of a comparison between a Baseline and a Proposal, two developments on the same site. The Baseline utilizes traditional practices and the Proposal employs the Convergent Model. The development processes are compared side by side and evaluated as an illustrative depiction of the potential for a new development process that is more capable of creating excellent buildings. / by Jason Fisher. / S.M. in Real Estate Development

Thesis (S.M. in Real Estate Development)--Massachusetts Institute of Technology, Program in Real Estate Development in Conjunction with the Center for Real Estate , 2010. / Cataloged from PDF version of thesis. / Includes bibliographical references (p. 54-56). / Between 2010 and 2018, approximately $410 billion of maturing CMBS loans are expected not to able to refinance; that is, they are in high risk of default. The current real estate downturn has not only pushed delinquencies to a historic high but has also inflicted losses to bondholders. When losses are realized through foreclosure, junior bondholders can have the face amount of their investment significantly reduced with no cash payment, while the senior bondholders receive partial repayment of their investment at par. Alternatively, loan modifications, or workouts, yield different outcomes which are more favorable to the junior bondholders. The rising tide of loan defaults and loan workouts will certainly exacerbate the ongoing "tranche war" among the CMBS bondholders. Consequently, it is imperative to understand how the CMBS servicing structure governs default resolution and loan workouts. By analyzing the recent default of Peter Cooper Village-Stuyvesant Town, this study will examine the case of the largest commercial real estate default in the US history as a real life example to illustrate whether the overlapping role of B-Piece buyer and Special Servicer adversely affects workout prudence. Through interviews with industry professionals and a review of the Pooling and Servicing Agreement (PSA), and a review of the transcript of the CMBS Investment Grade Bondholder Forum in June, 2010, the study proposes structural changes that could potentially mitigate agency risk inherent in the current servicing structure.. / by Hengwa Lai. / S.M.in Real Estate Development

Thesis: S.M. in Real Estate Development, Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate, 2014. / This electronic version was submitted by the student author. The certified thesis is available in the Institute Archives and Special Collections. / Cataloged from student-submitted PDF version of thesis. / Includes bibliographical references (page 65). / As the number of investors in real estate expands and current investors increase their target allocations, we can expect to see a substantial increase in the investment pace in real estate for institutions. Investors seeking high yields have been shifting their focus away from core investments due to high prices and resulting low yields, and have started to look beyond core properties and core markets for opportunities. This thesis examines the historical performance of Class A buildings in secondary markets and Class B buildings in primary markets from 2005 to 2013. Historical performance data is used from NCREIF, and the CoStar database is used to classify each property as Class A or Class B. Through this study we hope to shed some light on the importance of location and asset type (Class A or Class B buildings) as determinants of returns in commercial real estate investments. An analysis of our empirical findings, on an aggregated basis of an entire real estate cycle (2005-2013), indicates that while office and multifamily properties have demonstrated similar behavior throughout the cycle, this has not been the case for industrial properties. In the case of office and multifamily properties, Class B buildings in primary markets have outperformed Class A properties in secondary markets and the NCREIF NPI. As opposed to these distinct results, in the case of industrial properties, Class A buildings in secondary markets have outperformed Class B properties in primary markets and the NCREIF NPI. One explanation for this unpredictable behavior might be associated with the substantial economic and physical differences of industrial properties, specifically when compared to office and multifamily properties. Another possible explanation of this result has to do with the relatively small size of NCREIF data on industrial properties, and, consequentially, the industrial property data in this thesis was comprised of merely 93 industrial properties. Based on the overall empirical findings of our study, a savvy real estate investor, who is dedicated to maximizing his long run returns, would be better off investing in office and multifamily properties in primary markets, and in industrial properties in secondary markets. / by Omer Katz and Kailash Gupta. / S.M. in Real Estate Development

Thesis (S.M. in Real Estate Development)--Massachusetts Institute of Technology, Program in Real Estate Development in Conjunction with the Center for Real Estate, 2013. / This electronic version was submitted by the student author. The certified thesis is available in the Institute Archives and Special Collections. / Appendixes are printed landscape orientation. Cataloged from student-submitted PDF version of thesis. / Includes bibliographical references (pages 50-51). / An emerging trend in real estate is the development of sustainable buildings, partially due to the huge environmental impact of the design, construction and operation of commercial buildings. This thesis provides a brief history of the green building movement and the two (2) programs that encourage the development of energy-efficient and sustainable buildings in the United States: the U. S. Green Building Council's Leadership in Energy and Environmental Design (LEED) program and the Energy Star program, jointly sponsored by the Department of Energy and the Environmental Protection Agency. This thesis also summarizes a study by Piet Eichholtz, Nils Kok and John Quigley titled "Doing Well by Doing Good? Green Office Buildings" published December 2010 in the American Economic Review. This study found a commercial building with an Energy Star rating will rent for three percent (3%) more per square foot. The addition to effective rent was approximately seven percent (7%). The increase in value for a sale of a green building was as much as sixteen percent (16%). Then, using the same data as Eichholtz, Kok and Quigley, this thesis reports on the location and ownership of these green buildings, and calculates Loan to Value (LTV) ratios using the most recent sales price and financing amounts from the CoStar Group. In addition, the property's current LEED certification status is provided as well as a review of Federal and State incentives for sustainable buildings. The results indicate that more green buildings are located in California, Texas and Colorado. Investment Management firms, National Developer/Owners and Real Estate Investment Trusts own the majority of green properties. The Loan to Value (LTV) ratio for green buildings is no higher than those for conventional office buildings. Not enough information is available to compare mortgage interest rates between green and conventional properties. The number of LEED buildings and level of certification has increased since 2008. The states with the largest number of LEED buildings are California, Texas, Colorado and Virginia, correlating with the top states for green buildings overall. Although a worthy goal, there is limited Federal and State assistance for financing of sustainable buildings. / by Christopher John Pierce. / S.M.in Real Estate Development

Thesis (S.M. in Real Estate Development)--Massachusetts Institute of Technology, Program in Real Estate Development in Conjunction with the Center for Real Estate, 2011. / This electronic version was submitted by the student author. The certified thesis is available in the Institute Archives and Special Collections. / Cataloged from student-submitted PDF version of thesis. / Includes bibliographical references (p. 52-53). / The purpose of this research project is to examine the market pricing behavior of condos with hotel amenities in the Manhattan condo market. To do this, data was compiled from multiple sources to track variations in price paid per square foot controlling for whether the unit was part of a building with hotel amenities, among other things. Prices were tracked from 2004 through 2011 to capture the peak and fall of the most recent real estate cycle, during which luxury branded condos with hotel amenities saw a surge in popularity. The resulting analysis reveals a number of buyer preferences for building attributes as well as unit attributes. To determine the value of each attribute, the regression controls for variables such as neighborhood, floor on which each unit is located, maintenance fees per square foot and bedrooms and baths. The results of this analysis reveal that buyers are willing to pay a premium for units in buildings which have been branded. It also reveals that, controlling for all other variables, buyers do not value hotel amenities as part of the branded package. The timeliness of this research given the current surplus of unsold luxury condos should help developers responsible for the disposition of these assets by providing quantitative data to support the market and financial analysis tools already at their disposal. While this data focuses on the Manhattan condo market, the analysis and process can easily be translated to other major markets making this paper applicable to a wide range of readers. / by Amelia Jane Dolan. / S.M.in Real Estate Development

Thesis: S.M. in Real Estate Development, Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate, 2014. / This electronic version was submitted by the student author. The certified thesis is available in the Institute Archives and Special Collections. / Cataloged from student-submitted PDF version of thesis. / Includes bibliographical references (page 45). / In the last years, Fort Lauderdale, West Beach, and Miami together became the 8th largest metropolitan area in the U.S. with a population of approximately 6 million people. During the last four years the population of such area increased almost 5%. Along with the population, the number of jobs and firms, the supply of new homes, the car commuters, and traffic congestion increased exponentially throughout the area, especially in Miami. The former Miami zoning code, Z.O. 11000, incentivized the large availability and construction of parking spaces in new real estate developments throughout the city, encouraging people to own and use cars even more. The excess of parking spaces due to the former parking requirements, in practice, generated two distinct, immediate effects: (i) an increase in the number of cars throughout the streets; and (ii) higher construction costs for real estate developers. In 2010, the City of Miami adopted the Miami 21 form-based zoning code, changing the zoning and parking requirements. These changes incentivized the construction of transit-oriented developments throughout the city. The parking ratios for all the uses were reduced and some exceptions to the parking requirements were implemented, especially for new residential developments in urbanized transects. The reduction in parking ratios diminished significantly the construction costs of parking garages for real estate developers, increasing their returns on investments. The outcome is that real estate developers became even more interested in developing in the core of Miami. In addition to these economic incentives, the new residents of Miami are willing to live, work, and play in the same area without having to commute long distances. These conditions are transforming the skyline of Miami. There are now approximately 50 new residential developments being built in transit-oriented areas throughout the city, which represents an increase of more than 400% within the last 15 years. The purpose of this thesis is to analyze (i) the current parking requirements; (ii) the impact of parking ratios in the construction costs; and (iii) the changes that occurred in the location of new constructions in Miami after the adoption of the Miami 21. / by Rafael Libman. / S.M. in Real Estate Development

Thesis (S.M. in Real Estate Development)--Massachusetts Institute of Technology, Program in Real Estate Development in Conjunction with the Center for Real Estate, 2012. / "September 2012." Cataloged from department-submitted PDF version of thesis. This electronic version was submitted and approved by the author's academic department as part of an electronic thesis pilot project. The certified thesis is available in the Institute Archives and Special Collections. / Includes bibliographical references (p. 82-84). / Commercial Real Estate is a large asset class, increasingly owned by professional investment managers. Investment managers need a thorough understanding of the risk return relationship and tools to adequate implement sound investing, portfolio management and risk management strategies. Equilibrium asset pricing models are tools that identify and quantify the risk factors priced by the capital market and establish risk adjusted LONG RUN expected returns. This thesis creates portfolios of properties by property type, geographic location and asset size. Total return indices are created for each portfolio to test single factor and multifactor asset pricing models cross sectionally within the commercial real estate asset class. Historical total return data is used from three sources including: NCREIF; the stock market-based FTSE NAREIT Pure-Property Index Series; and a novel "synthetic" total return index created by the researcher from the repeat sale transaction-based Moody's/RCA CPPI Indices. The asset pricing model test results for the NCREIF and PureProperty indices show that a substantial amount of the variation in LONG RUN total return can be explained by a portfolio's beta with respect to a market index and property specific variables such as property type, location and asset size. The asset pricing model test results for the RCA indices were poor and failed to explain the cross-section of commercial real estate returns. Thus, it appears that certain parts of the commercial real estate market may be operating without a systematic relationship of risk and return. / by Ryan Hunter Jones. / S.M.in Real Estate Development