Thesis: S.M. in Real Estate Development, Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate, 2019 / Cataloged from PDF version of thesis. / Includes bibliographical references (pages 35-36). / Even the most seemingly straightforward developments are not without risk. Given development's speculative nature, developers are taking a risk today that there will be future demand for their project at the time of delivery. Additionally, given the high fixed costs of development, such as land value and construction costs, developers face the risk that their projected rental revenue or asset valuation might shift unfavorably by the time of delivery. While nearly all developments face these risks, developers acquiring a parcel of land that must still go through the entitlement and permitting process are faced with a host of additional risks given the uncertainty surrounding third party approvals. As zoning is a localized set of regulations, the process and associated risks vary from market to market. / The purpose of this thesis is to understand what uncertainties are considered the riskiest by developers and how the clarity of the local zoning code can create or mitigate these risks and impact a developer's risk tolerance. Through a set of interviews with groups experienced in development in three major U.S. markets, this paper explores how developers are pricing the additional risk of acquiring unentitled land into their return requirements and if their methods suggest that they are being adequately compensated for taking on greater uncertainty. It appears that while developers do underwrite a premium for unentitled land, among different unentitled opportunities, this premium is fairly homogenous within a given market. Differences exist however between markets depending on how transparent and easily understood the approval process is. / In a city where the approval process for obtaining entitlements is clear and codified, developers feel confident in the path to construction commencement and therefore underwrite only a moderate return premium. However, in cities with ambiguous or byzantine zoning codes, uncertainty and perhaps even skepticism of the process causes developers to require a greater return premium, resulting in decreased land values, to compensate themselves for the increased risk in obtaining entitlement approvals. / by Gina Pfingston. / S.M. in Real Estate Development / S.M.inRealEstateDevelopment Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate

Thesis: S.M. in Real Estate Development, Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate, 2017 / Cataloged from PDF version of thesis. / Includes bibliographical references (pages 45-46). / With the strong drive of seeking stable returns and hedging against a slowing economy, Chinese investors have extended their investment aggressively around the world to diversify their holdings. In 2016, according to JLL's Global Capital Flow, Chinese investment hit the new height in the overseas property markets, rushing US$33 billion into real estate investments. It led to an increase of nearly 53% y-o-y (Morgan, 2017). Among those, almost half of the transactions happened in the U.S (Wildau, 2017). In the past years, high profile deals were always unsurprisingly related to Chinese investors' name in the U.S. 2017, however, has been whirlwind for Chinese investors in the U.S. Along with the election of Donald Trump as the President of the United States, the Chinese government imposed capital control on foreign investment. Although the mainstream is saying that the new administration of the U.S. is not considered a significant threat to the investment and the temporary policy of capital control would not outweigh the long-term strategy of investment overseas, the uncertainties and prolonged procedure of the outflow capital does delay the pace of outbound investment. This thesis is aiming to dive into the fundamentals of Chinese outbound investment in the U.S. real estate market. It will focus on the primary investment strategies the Chinese investors are using, including the selection of property type, the size of the deal, geographic targeting, and local partnership. This thesis will also conduct interviews and case studies with institutional investors who have a long-term strategy of investing in the U.S. market. The case studies will not only address the above questions but also seek different perspectives on their strategies for dealing with the current business climate. After the analysis, this thesis intends to figure out potential constraints and opportunities for Chinese investors and their partners in the U.S. real estate market. / by Mengjing Ni. / S.M. in Real Estate Development / S.M.inRealEstateDevelopment Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate

Thesis: S.M. in Real Estate Development, Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate, 2017 / Cataloged from PDF version of thesis. / Includes bibliographical references (pages 40-43). / The digital age of real estate provides access to new data and techniques to evaluate properties. Real estate brokerage and technology firms are assembling this data to produce user-friendly scores that serve as powerful metrics to identify real estate trends and evaluate buyer behavior. This paper examines Redfin's "Walk score" that measures a location's walkability to amenities like grocery stores or parks and uses a hedonic pricing model to find the $/square-foot premium for high Walk scores in three communities in the San Francisco Bay Area. The data is composed of residential transactions from 2014 to early 2016 that are analyzed at the neighborhood level and normalized to improve the precision of the hedonic model. This neighborhood lens produces a more robust analysis than the broader data sets used in the majority of prior Walk score research. The results shown in this paper demonstrate that a high Walk score is highly correlated with increased property values in a broad range of communities with diverse socioeconomic characteristics. This study includes a framework for using Walk scores (and several related scores) by discussing the composition of the scores, economic principles underpinning them and the critical assumptions for hedonic regressions using Walk scores. These considerations are critical to assessing the real premium of Walk scores. The paper concludes with an analysis method for investors to use walk scores to identify real estate home-buying trends, find under-valued property and create development programs that leverage and build upon walkability. / by Nicholas Foran. / S.M. in Real Estate Development / S.M.inRealEstateDevelopment Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate

Thesis: S.M. in Real Estate Development, Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate, 2017 / Cataloged from PDF version of thesis. / Includes bibliographical references (pages 65-66). / Over the past several decades, the real estate market has surged in Beijing. Meanwhile, Beijing suffers severe air pollution now and then. Because of the dissatisfaction of air quality, clean air becomes a highly valued factor of the overall quality of life. When people choose to buy properties, they would be willing to pay more for a unit that is located in less polluted areas than for an otherwise identical unit that is located in more polluted areas. This study aims to establish a relationship between air pollution's spatial distribution and property price by using historical air quality record and property transaction data in Beijing. Although people cannot purchase clean air directly, variations in the air quality of different areas should be indirect reflected in housing prices. Employing the hedonic pricing model, the results suggest a strong positive relationship between a unit's resale price and the air quality of the area where the unit is located, meaning that properties that are located in an area with relatively better air quality are sold at a premium and vice versa. Besides, by using a matching regression, relationship between air quality's seasonal variation and property price is discovered, although it is not statistically significant. Another matching regression confirms that compared to property buyers, property renters care less about the air quality of the area where the unit is located, but care more about the unit's other specific locational attributes and physical attributes, such as job accessibility and interior decoration. / by Sai Fang. / S.M. in Real Estate Development / S.M.inRealEstateDevelopment Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate

Thesis: S.M. in Real Estate Development, Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate, 2017 / Cataloged from PDF version of thesis. / Includes bibliographical references (pages 67-69). / Latin America has witnessed many upheavals and controversies in the recent past. However, the region continues to show strong and stable growth as business carries on despite political and social turbulence. Local economies are open to foreign investment. Markets have developed in both depth and sophistication as first risk-seeking frontier investors and then larger Institutional Investors entered the market. Today, open economies, increased market transparency and liquidity, sophisticated local partners, the availability of debt financing from both local and global parties and a variety of structures provide opportunities for Foreign Institutional Investors (FIls) to invest capital in assets in Latin America with attractive risk-return profiles. This thesis will assess the five largest Latin American markets for FIs, describing their economies' evolution and the formation and development of the FDI market. Investing in Latin America has become a central pillar of many international corporations' and developed countries' economic strategies. Many North American, Asian, and European firms have material investments in Latin America's real estate sector. The thesis will outline a series of best practices to follow when sourcing opportunities and managing a portfolio of assets in Latin America, along with the risks that may be encountered. / by Lisseth Enciso Huayek. / S.M. in Real Estate Development / S.M.inRealEstateDevelopment Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate

Thesis: S.M. in Real Estate Development, Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate, 2017 / Cataloged from PDF version of thesis. / Includes bibliographical references (pages 169-172). / In this thesis, we will examine robotic parking systems. This form of parking infrastructure has the capacity to park the same number of vehicles as a traditional garage in half the space. As the global population increases and waves of people continue to choose urban dwelling, it will be essential to choose the most efficient, environmentally sound, and socially responsible forms of infrastructure. In all three of these aspects, the robotic parking garage is superior to the ramp parking garage. Main topics include: i) the history of mechanized parking systems; ii) specifications for various modem-day ramp and mechanized solutions; iii) current worldwide and domestic factors of demand; iv) a personally researched and written case study; and v) a decision-tree tool that assists developers to hone in on a narrow selection of automated systems for accessory parking. The decision-tree responds to a combination factors, namely, vehicle throughput, site characteristics, and designated primary use. Above all, this thesis will seek to answer the following question: With so much riding on the successful operation of a project's accessory parking, when, if ever, is it in a real estate investor's best professional interest to risk relying on an alternative parking typology? / by Ladd M. Thorne, Jr. / S.M. in Real Estate Development / S.M.inRealEstateDevelopment Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate

Thesis: S.M. in Real Estate Development, Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate, 2017 / Cataloged from PDF version of thesis. / Includes bibliographical references (pages 74-76). / The value of a given parcel of land is determined by a multitude of factors based on its location and physical characteristics. No two parcels are alike, making direct comparison between parcels and the study of underlying land values difficult. Further, in locations where land is most valuable, there are often existing improvements on the land. In order to determine a land-only value, the value of the existing buildings or infrastructure must be estimated. This leads to the potential for errors and other issues. There has been a great deal of research conducted on land value for specific real estate uses, such as residential or office. However, little research has been conducted on industrial land. This study will focus specifically on industrial land value and the individual factors that drive it. This study analyzes a database of 1,000 transactions in 10 of the largest industrial real estate markets in the United States. / The data set is unique because most of the data points are land only, lessening the impact of appraisal and estimation techniques. Additional variables were added to each data point to account for local land use regulation, as well as spatial location. A regression analysis determined how these variables influenced the underlying land values. From this analysis, the following conclusions emerged: First, land use regulation is a strong driver of industrial land values. Using index values from the Wharton Residential Land Use Regulatory Index (WRLURI), the analysis showed that land values increased when the stringency of land regulation increased. Second, proximity to interstate highways, airports, and the central business district are also significant drivers of industrial land value. Decreased distances to these points of interest resulted in increased land value. Third, industrial land values are also positively influenced by the cumulative income of the surrounding population. / A 1 percent increase in cumulative population income resulted in an approximately 0.47 percent increase in land value. Lastly, physical land features impacted land values intuitively. Flattened, developed sites were much more valuable than raw, undeveloped sites. / by Mark F. Callahan. / S.M. in Real Estate Development / S.M.inRealEstateDevelopment Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate

The main aim of this thesis is to design a new and more advanced methodology for valuation of real estate portfolios and incorporate uncertainty into the valuation process. From the comprehensive real estate literature we identified the main value drivers whose treatment is often neglected in the traditional appraisal methodology as they are used as a single point estimates. The identified parameters are the discount rate, inflation, prime rent, occupancy and market capital value changes. In contrast with the traditional approach, we calibrate distributions of these parameters from historical data and allow their variation through the Monte Carlo simulation. This enables us to model their impact on the market value of our real estate portfolio, which comprises of A-class office buildings with detailed property level data including their lease structure. The methodology presented here builds on the widely used DCF approach, which is augmented by the risk parameters and through the thousands of iterations of the Monte Carlo simulation we arrive to a distribution of all potential values of the portfolio. Finally, the knowledge of relevant risk factors and their impact on returns of their property portfolio then provides investors with better and more reliable foundations for their decisions and...

Thesis: S.M. in Real Estate Development, Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate, February, 2021 / Cataloged from the official PDF of thesis. / Includes bibliographical references (pages 101-107). / Corporations and their employees, often referred to as talent, have historically been concentrated in gateway markets in the United States. In particular, the San Francisco and New York metro areas have become ubiquitous hubs for the technology and financial services industries, respectively. These markets, however, are becoming increasingly expensive and cost prohibitive for employers and employees alike, spurring the migration of both parties to smaller markets. Smaller markets provide corporations the opportunity to better align employee incomes and costs-of-living, often while providing cost savings to corporations and a better quality of life to employees. Corporations' propensity to position headcount and footprint growth in non-gateway markets is increasing, both driven by and driving further demographic migration to these smaller markets. The growth of firms outside of gateway markets will provide opportunities for smaller markets to participate in future corporate growth. / This thesis studies recent population and corporate migration trends to these emerging hub markets, evaluates the various factors that corporations consider when deciding how and where to physically grow their footprints, and evaluates the resulting pattern of corporate development in these new hub markets, aiming to provide a level of understanding to developers and investors performing diligence these new markets for investment. COVID-19 will likely accelerate these trends as workforce distribution becomes more commonplace, driven by the COVID-disruption-forced implementation of more sophisticated, strategic real estate planning at corporations across the technology and financial services industries. / These corporations' quickly-evolving policies regarding remote work and telecommuting, employee demands to live in more affordable and livable markets, and corporate desires to reduce personnel, operating, and tax expenses, will result in further distribution of corporations and their talent across the country. / by Barclay Macfarlane. / S.M. in Real Estate Development / S.M.inRealEstateDevelopment Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate

Thesis: S.M. in Real Estate Development, Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate, February, 2021 / Cataloged from the official PDF of thesis. / Includes bibliographical references (pages 80-81). / With a large, growing, and young population, Brazil suffers from a chronic shortage of affordable housing. This crisis, in particular, negatively affects new and economically ascending entrants to the housing market. This economic crisis is unfolding concurrently with the global environmental challenges associated with climate and sustainability. This thesis explores the application of modular construction in an affordable housing project in Cuiaba, Brazil. This thesis is comprised of three distinct sections. Section I provides a historical overview of offsite construction with a particular focus on precast concrete in modular construction. It describes the forces and some of the most notable projects and figures that shaped precast construction - especially in its European cradle. It further provides a comprehensive classification of current modular construction and discusses its benefits and limitations. Section II analyzes Brazil's ongoing housing crisis and Brazil's economic trends and realities. It discusses Brazil's National Housing Policy and its flagship program - Minha Casa, Minha Vida. Section III takes the reader to Cuiaba, Mato Grosso's capital, and proposes a 528-unit affordable housing development project there. It explores the establishment of a mobile concrete precasting plant and analyzes the production and application of a novel modular concrete system in the project. Particular attention is paid to the financial viability of the project. / by Daniel Smicka. / S.M. in Real Estate Development / S.M.inRealEstateDevelopment Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate