Thesis: S.M. in Real Estate Development, Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate, September, 2020 / Cataloged from student-submitted PDF of thesis. / Includes bibliographical references (pages 107-117). / This thesis investigates the scientific underpinnings of climate change, its physical manifestations, the complications society faces in adapting to this phenomenon and its likely impact on real estate investment values. It concludes by proposing an initial investment framework for real estate investors concerned with climate change. This framework highlights non-traditional due diligence considerations and asserts that probabilistic valuation methods allow for more accurate asset underwriting. The first chapter is structured as a general primer on climate change and includes references for those who would like additional reading on its science. The second chapter describes the geophysical effects of climate change. The intent here is to provide enough background for readers to understand its causes and potential severity. The third chapter covers how geopolitical actors are responding to a warming world and introduces important macroeconomic trends. / The fourth chapter outlines the substantial engineering and insurance challenges ahead and presents cases of societies that have won and lost while dealing with either a changing climate or extreme weather events. The fifth chapter highlights key economic, legal, and demographic research on climate change's impacts to date and those that are likely to occur going forward. The purpose of these chapters is to provide historical context for how dramatic atmospheric changes can lead to dramatic economic losses, and to provide some lessons that real estate investors should incorporate when underwriting new opportunities. The conclusion summarizes the first five chapters and offers an initial framework for how real estate investors can incorporate climate change into their underwriting, including a brief review of how property values are currently underwritten using relatively short-term, deterministic discounted cash flows. / In closing, I describe how a longer timescale underwriting with additional simulations is beneficial to account for the uncertainties associated with climate change and suggest further research to explore possible market mispricing of assets based on widely divergent upside and downside skews given likely future climates. / by Daniel Hare. / 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, September, 2020 / Cataloged from student-submitted PDF of thesis. / Includes bibliographical references (pages 43-45). / Big data and the increasing usage of data science is changing the way the real estate industry is functioning. From pricing estimates and valuation to marketing and leasing, the power of predictive analytics is improving the business processes and presenting new ways of operating. The field of affordable housing development, however, has often lacked investment and seen delays in adopting new technology and data science. With the growing need for housing, every city needs combined efforts from both public and private sectors, as well as a stronger knowledge base of the demands and experiences of people needing these spaces. Data science can provide insights into the needs for affordable housing and enhance efficiencies in development to help get those homes built, leased, or even sold in a new way. This research provides a tool-kit for modern-day real estate professionals in identifying appropriate data to make better-informed decisions in the real estate development process. From public city data to privately gathered data, there is a vast amount of information and numerous sources available in the industry. This research aims to compile a database of data sources, analyze the development process to understand the key metrics for stakeholders to enable decisions and map those sources to each phase or questions that need to be answered to make an optimal development decision. This research reviews the developer's perspective of data science and provides a direction that can be used to orient themselves during the initial phase to incorporate a data-driven strategy into their affordable multi-family housing. / by Sun Jung Park. / 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, September, 2020 / Cataloged from student-submitted PDF of thesis. / Includes bibliographical references (pages 40-41). / The retail industry has transformed markedly in the last decade driven by the confluence of technology, evolving consumer behavior, and innovation. As the sector continues to evolve, retail real estate is coming under significant pressure to keep up with the pace of change. Some centers are poised to quickly adapt and come out stronger, others are left behind and going dark. This paper is particularly interested in examining the geography of distressed retail centers, specifically malls and community centers, understanding what factors lead to their closure, and coming up with a predictive model to measure the properties' probability of defaulting. We analyze the geography of approximately 4,900 malls and community centers across the United States at two intervals, 2010 and 2020. First, we isolate the centers that have died within the last decade to identify what distinguishes between a dead and survived center. Second, for each dead center we estimate the distance of its competitors to assess impact of spatial competition. Third, we use a linear regression to identify determinants that influence the death of a center. Fourth, we run a profit model on the center's survived-dead response based on each variable. We conclude by developing a predictive model to assess which centers are at greatest risk of underperforming. Research shows that a property's net rentable area has an outsized impact on the probability of defaulting, with opposite effects for malls and community centers. As malls grow larger, they are less likely to become distressed -- whereas the growth of community centers leads to a higher probability of failure. The center's proximity to competition, and the amount of available space both increase the impact on the likelihood of going under. The opportunity to renovate, on the other hand, mitigates the impact.. / by Morgan Fleischman. / 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, September, 2020 / Cataloged from student-submitted PDF of thesis. / Includes bibliographical references (pages 30-31). / There is currently more retail space per capita in the United States than in any other country, especially suburban mall space. Most American malls built throughout the twentieth century were designed to satisfy the American consumer's reliance upon the automobile and were subsequently strategically placed adjacent to major transportation arteries just on the outskirts of then existing communities. At the time of their construction, this was considered an economical strategy, as large swaths of land on the edge of town could be purchased at a significant discount when compared to land with closer proximity to increased population density; however, changes in consumer preference, along with population growth and now COVID-19, have all contributed to the continued downfall of the suburban mall. How will these massive centers, now situated in prime locations, be able to reinvent themselves and add value to the community if the community sees no value in their present use? This thesis seeks to examine this question through a case study analysis of the adaptive reuse of Highland Mall in Austin, TX. Through an intricate public-private partnership agreement, 1.2 million square feet of dying retail was able to be master planned into a thriving mixed-use development. Research material is derived from existing writings and personal interviews with relevant stakeholders. The conclusion this work leads to is that public-private partnerships provide a solution to the capital intensive process of reinventing retail properties. / by Ian Duncan Bradley. / 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, September, 2020 / Cataloged from student-submitted PDF of thesis. / Includes bibliographical references (pages 57-61). / The government of the District of Columbia in 2019, unveiled a 2020 - 2050 Housing Production Goal popularly tagged "#36000by2025". The Initiative details Washington DC's goal to develop 36,000 new housing units in partnership with developers in the city, including 12,000 affordable housing units between the years 2020 and 2025. The Initiative seeks to reduce homelessness, alleviate the constrained local housing market, and preempt an anticipated housing shortage in relation to the forecasted economic and population growth in Washington DC. This thesis focuses on identifying and analyzing the types of incentives or barriers for developers to add additional affordable housing. This thesis first explores the details of this Initiative, reviewing its history and the factors that led to its creation. The thesis will also review its specific goals and proposed methods towards achieving them. / Through a literature and policy review, the thesis defines the framework within which the city and developers define affordability for housing development projects. The thesis then looks to real estate developers operating in the city who have or intend to proceed with market-rate, mixed-income, and affordable housing projects. Through interviews, an analysis of housing development trends, and a review of upcoming housing projects, the thesis seeks to understand what challenges developers face with the housing affordability requirements and how Washington DC's Initiative and Comprehensive Plan affects their developmental goals. The thesis will also review what barriers real estate developers face and explore how they can be overcome. This thesis will also pivot to Washington DC Government's planning process to review what incentives are being proposed which encourage both new affordable housing development and the preservation of endangered affordable units. / Via interviews and literature review, the thesis explores possible areas of improvement on the initiative that meet the city's goals and support real estate developers' ambitions. Keywords: Real Estate Development, Multifamily Housing, Affordable Housing, Washington DC, #36000By2025, Community Benefits. / by 'Kayode Agbalajobi. / 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, September, 2020 / Cataloged from student-submitted PDF of thesis. / Includes bibliographical references (pages 54-55). / This thesis studies the application of securitization such as Project Finance Asset-Backed Securities (PF ABS) and Mortgage Backed Securities (MBS) as a method of real estate finance in Korea. Real estate in Korea has developed substantially with a remarkable economic growth in last 20 years. As real estate became one of the most popular investment methods, real estate finance also developed into a more diversified and complex structure. Real estate securitization provides an alternative to the traditional way of financing by liquidating the real estate related assets and makes access easier for all participants in the process. In Korea, real estate securitization was first adopted in 1999, with the initiation of the Asset Securitization Act. Though the concept of Asset-Backed Securities (ABS) started late compared to the global securitization industry, the Korean ABS market has grown so substantially that the total issuance amount reached $43 billion in 2019, having expanded by almost eight-fold from the beginning of the market in 1999. With a considerable progress in the market, some of securitization products have developed with distinctive features. Of many products, this thesis mainly studies two types of real estate securitization products, Project Finance Asset-backed Securities (PF ABS) and Mortgage-backed Securities (MBS). By going through the market trends and social context of both products, it will cover what can be suggested for further improvement of the real estate finance market in Korea / by Jee hee Baek. / 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, September, 2020 / Cataloged from student-submitted PDF of thesis. / Includes bibliographical references (pages 39-40). / Recently the South Korean government announced its comprehensive measure to revitalize the indirect real estate investment market, especially to expand the public offering market to be ten times larger than its current state. The measure can be interpreted as a change of state in the Korean real estate market and an acknowledgment of its need for the vital role of indirect real estate investments. As a low-interest environment continues and the amount of floating money increases, real estate speculation has never been more of an issue, which cannot be solved without changing the investment paradigm. Vitalization of the indirect real estate market can provide individuals alternative ways to invest their money in real estate and redistribute profits generated from real estate investments that are currently driven by few institutional investors. This thesis aims to study the overall indirect real estate investment market in Korea focused on two main vehicles, Real Estate Investment Trusts and Real Estate Funds. The two vehicles will be studied in depth on their history, current market status, behaviors and characteristics to analyze their roles in the market. Analysis will be done on indirect real estate investment vehicles in comparable countries to take away lessons learned and find areas for possible market improvements. Data will be collected from various literatures, journals, statistics from fund assessment companies and investment associations to attempt to find inefficiencies that can be improved in the market. / by Cho Hae Park. / 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, September, 2020 / Cataloged from student-submitted PDF of thesis. / Includes bibliographical references (pages 88-94). / Permitting and executing large scale real estate developments in Boston, Massachusetts is difficult. The process is time and capital intensive due to the nature of an outdated zoning code that exists to induce project-by-project negotiation with the central permitting authority, the Boston Planning and Development Agency ("BPDA"). Critics of the BPDA and Boston's zoning system contend that the city's zoning practices favor developers and investors at the expense of thoughtful neighborhood building and public benefits. In light of this argument, this paper analyzes the public benefits secured by the city at Seaport Square and compares them against the estimated public benefits produced by the highly prescriptive zoning code of Seattle, Washington. The analysis begins with a general comparison of prescriptive versus negotiated zoning frameworks before more specifically comparing the respective systems in Seattle (highly prescriptive) and Boston (highly negotiated). It then provides a narrative overview of the Seaport Square zoning and permitting process to date to provide context around the public-private negotiation, itemize public benefits secured, and illustrate the mechanics of how those benefits are delivered. After evaluating the actual public benefits generated in Boston, the application of zoning regulations of an analogous neighborhood in Seattle is used to estimate public benefit outputs of Seaport Square under a legislatively prescribed zoning environment. Finally, it assesses common arguments against Boston's current zoning framework and discusses potential implications of a shift toward a more predictable, prescriptive system. / by Patrick Downey. / 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, September, 2020 / Cataloged from student-submitted PDF of thesis. / Includes bibliographical references (pages 41-42). / This thesis examines the potential for reinventing an existing asset class -- limited service hospitality properties -- as new workforce housing properties. Due to the cyclical demand profile, modest price points, and relatively fragmented ownership of limited service hotels in the United States, these properties often escape the attention of highly sophisticated investors and developers. Furthermore, as relatively low margin businesses, many of the properties are visually unappealing and have significant deferred maintenance needs. Coupled with this dynamic is the fact that the United States is facing a nationwide housing crisis and suffers from a structural shortage of affordably priced housing alternatives. This thesis examines the economics of limited-service hospitality assets; the growth of workforce housing as a residential asset class; and the potential for redeveloping legacy hospitality properties into new workforce housing. In order to supplement the aforementioned macro and secular analyses, this thesis also includes a case study of the redevelopment of an antiquated motel in Oceanside, California. / by Eric DeWees. / 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, September, 2020 / Cataloged from student-submitted PDF of thesis. / Includes bibliographical references (pages 49-53). / The outbreak of the COVID-19 pandemic in late 2019 has largely impacted the global economy by changing every aspect of our living environment with limited social and economic activities throughout 2020. This unprecedented economic downfall exposed real estate properties to high risk of default, pushing the CMBS loans delinquency rate to 10.32% in June 2020. As such an economic halt is likely to prevail, it is expected that the Commercial Real Estate (CRE) market would experience more distress in terms of debt service. Thus, it is imperative to overview the CMBS securitization process, the servicing structure, and the workout scenarios in case of loan default in order to understand the complexity of the CMBS structure and better prepare appropriate measures or strategies in response to current market landscape. By having a case study on 666 Fifth Avenue in New York, this paper will analyze one of the most high-profile properties that was transferred to special servicing to review strategies to resolve financial distress. / by Joon Keun Chang. / 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