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 49-50). / Since 2010, China has put forward ample efforts to liberalize its currency and financial systems to transition into an economy with sustainable growth. However, the severe capital flight in these past two years prompted the government to place capital control regulations on both retail (individual) and institutional investors engaged in cross-border investments. These regulations include temporary halts of various programs such as the Qualified Domestic Institutional Investor Scheme and the Qualified Domestic Limited Partner initially devised to facilitate a smooth capital flow in the Shanghai Free Trade Zone, while promoting new initiatives such as the Stock Connect and One Belt One Road. The action of the government has since stabilized a continuously devaluated Renminbi and increased the alarmingly low level of foreign reserve. On the negative note, however, the regulations also dramatically suppressed the volume of cross-border transactions and subsequently caused changes in Chinese investors' profile, partnership structure and preference for overseas markets. The fast change of the investment dynamics prompts questions including if there is still strong demand for foreign assets by Asian investors, what are the channels to continue to engage with China-based investors and their capital, how to build a sustainable business strategy with a policy-driven economy, and what the potential future risks would be. To answer these questions, it is important to distinguish between channels that are temporally closed but in the long term will continue to play a significant role in liberalizing the Renminbi and channels that are still viable even under the capital control regulations. Hong Kong plays a strategic role in this discussion. This thesis is based on rigorous research combined with an in-depth analysis of the strategies of local market players who have established business relationships with Chinese investors and formed insights into future developments based on the current investment dynamics. The thesis attempts to provide an idea of the gradually changing landscape of global investments and propose more sustainable business strategies with investors domiciled in policy-driven economies such as China's. / by Chang Zhao. / 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. / 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. 81-83). / This paper discusses possible optimal corporate portfolio composition for Japanese trading and investment firms from stakeholders' (specifically shareholders and employees) value maximization perspective. Based on the historical returns of diversified business units of 4 subject companies, performances of individual business units and three portfolios (current, tangency, and "suboptimal") are analyzed and compared. The study suggests adjusting suboptimal portfolio composition based on each business unit's systematic risk and excess market return relative to its systematic risk and industry average. A firm also needs consideration on how the composition adjustment would affect diversification benefits the firm now enjoys and also on its overall management strategy. Key words: corporate portfolio management, diversification, stakeholder theory, portfolio theory, CAPM, Index model, accounting beta, Jensen's Alpha, Treynor ratio, multi-factor model. / by Takanori Ono. / 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, 2015. / Cataloged from PDF version of thesis. / Includes bibliographical references (pages 69-73). / Two tall residential towers in midtown Manhattan were under construction in 2014, prominently setting records for both height and for the early sale prices of their condominium units. These are to be followed in the next several years by at least five more such luxury skyscrapers in the same district. This phenomenon has renewed public interest in the use of air rights in New York City. Despite widespread media attention and studies by community groups, examination of transferable development rights usage in New York has not included the application of rigorous financial analysis. This paper first provides a comprehensive account of the history of various forms of air rights in New York City, particularly chronicling how such air rights have developed and changed over time to the present day. Following on this understanding, and using these two recently-constructed residential towers as examples, this paper provides detailed narratives describing how these projects assembled their development rights, and how this spatial envelope was used. The paper concludes with a canonical comparison of the acquisition prices of these development rights with their final sales prices and a regression of the price on floor height and size. / by Matthew McNelly Jones. / 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, 2017. / Cataloged from PDF version of thesis. / Includes bibliographical references (page 65). / When it comes to financial innovations, Mortgage Backed Security (MBS) has the advantages of scattering risk, increasing liquidity, and lowering the financing costs. However, there are a few obstacles to developing a mature MBS market, among which the pricing of MBS is the vital one. Reasonable pricing will not only lead to the success of MBS issuance, but also pave the way for the China's MBS development in the future. This paper first introduced the definitions and development of MBS, and reviewed studies on the Subprime Crisis from the MBS prospective. This paper then discussed the MBS products, issuance procedures, and pricing principles. In particular, it analyzed the key factors of MBS pricing which affected the cash flow of MBS, and the methods to calculate the cash flow considering prepayment behavior. Based on China's capital market and the differences between Chinese and American capital markets and residential loan markets, this paper explored the appropriate pricing model for China's MBS market, and selected Static Cash Flow Yield method to price the MBS products in China. A simulation case was priced using SCFY. In the final section, the author gave some predictions about the development of MBS in China, including improving the primary and secondary mortgage market and the intermediary service system, and furthering interest rates liberalization. / by Shalin Chen. / 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, 2018. / Cataloged from PDF version of thesis. / Includes bibliographical references (pages 71-72). / New York City is projected to add nearly one million residents by the year 2040. At a time when housing supply and affordability are a significant factor for global competitiveness, the city has implemented a variety of regulations and incentives to encourage new development. Current Mayor Bill de Blasio's housing strategy includes an initiative to rezone several neighborhoods to accommodate higher density, encouraging the private real estate development industry to build more units while requiring that a portion of those units be made permanently affordable. While rezoning actions are often studied years later in order to provide enough time to measure their success, the city's plan calls for as many as 15 neighborhoods to be rezoned within 10 years. A real-time analysis of an individual neighborhood rezoning proposal, approved during the time of this thesis, provides the ability to evaluate research questions related to how rezoning is being carried out now and how participants may alter their strategies going forward. The neighborhood of East Harlem, the third area in the city to undergo this rezoning process, is thus used as a case study for how rezoning is carried out, compromised and ultimately approved. The analysis reveals that the total amount of new residential development made possible through rezoning is limited compared to a "no action" scenario. Thus, the most significant impacts of rezoning are not to dramatically increase the number of new residential units to be built, but rather to require that a portion of those new units are made affordable through the introduction of the city's mandatory inclusionary housing program. Additionally, the rezoning process resulted in significant city commitments to public investments in the neighborhood. Yet, these commitments are not guaranteed within a specific timeframe and are almost entirely the responsibility of the public sector to implement. While the ability of rezoning to produce a significant number of new residential units is limited, rezoning will continue to serve as a primary means for the city to attempt to house its growing population. / by Midori Wong. / 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, June 2017. / "September 2016." Cataloged from PDF version of thesis. / Includes bibliographical references (page 94). / The built environment consumes more than 40% of the energy used around the world and nearly 70% of the electricity used in the United States. These same buildings use 25% of the world's fresh water resources and contribute 50% of global waste. In order to make the buildings we inhabit more resource-efficient, strategies are being employed through the use of technology, materials, and design in order to achieve a new standard of environmental impact, called net-zero buildings. To date, only a few dozen buildings in the United States have achieved net-zero or net-positive energy and water status, where they capture as much or more energy and water through renewable energy resources and water collection and reuse mechanisms as they use on an annual basis. This thesis examines the many energy- and water-efficient systems, design solutions, and materials that work together to create more sustainable structures and presents case studies for two highly-efficient developments. These net-zero interventions are then compared to the highest-scoring Leadership in Energy and Environmental Design (LEED) buildings across the United States in an attempt to detail the similarities and differences in the goals of each system. Research of the top 10 highest-rated investor-owned buildings shows a significant gap in performance between the systems and design elements used to achieve LEED Platinum status and the energy and water interventions that are necessary to reach net-zero consumption goals. The gap in performance between LEED and net-zero design is related to regulatory hurdles, technological advancements, and the sophistication of design teams. Combined, these influence the commercial diffusion of net-zero development projects and can be used to understand how the built environment can start to meet sustainability goals. / by Kevin M. Murphy. / 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, February 2018. / Cataloged from PDF version of thesis. / Includes bibliographical references (pages 54-56). / There are neighborhoods right in the heart of a city that seem dead and forgotten. The inhabitants of the city steer clear of these neighborhoods. I believe many people perceive these places to be beyond repair. Yet, there are a few individuals who have seen potential in the forgotten neighborhood and were able to revive them. In most cases they did it with minimal investment coupled with a belief that it could be done. A true underdog story. The questions I aim to answer are: How were these neighborhoods turned around? What are the attributes and characteristics they all share? Essentially, what is the secret sauce to reviving a beat up neighborhood? I believe it is important to study those people that have successfully revived more than one neighborhood, because, if you have done it more than once then it is not a fluke and we should pay special attention. We focus on two men, Tony Goldman and Joe Englert. They are responsible for the successful rejuvenation of seven neighborhoods. My goal in writing this is to give others confidence that a neighborhood can be revived and give them a path to do so. / by Alberto R. Vadia. / 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. 82-85). / With 1 billion people living in the slums of cities today and no signs of a decrease in the rate of urbanization and population growth, it is obvious that new approaches to combating poverty and the global housing crisis are needed. Acknowledging the recent growth of the microfinance industry and social investing, this thesis investigates how for-profit social investment techniques could be used to create housing and combat the growth of slums. It compares various for-profit social business models and provides a "toolbox" of potential structures which could be employed based on the characteristics of a specific community. In the end, it shows that social business techniques hold promise as effective ways to draw money into developing nations from the world's capital markets to improve the lives of millions of informal settlers. Using literature reviews, interviews with industry participants, and a feasibility study based in Manila, the paper shows that: - There are multiple for-profit social business structures for producing low-cost housing which could be employed based on the characteristics of the particular community. - The social investment landscape has developed to the point where there is significant capital available for investments in housing. - A social business structure would be effective in providing housing for the lower-middle class population of informal settlements in Manila; and the implementation of such a program would be effective in relieving a large financial burden from public institutions, allowing them to serve more households in the lowest income segment. / (cont.) - These social business models could be scaled-up to numerous communities to create a significant impact on the housing crisis. As real estate developers fancy themselves as choreographers of a dance of multiple disciplines which, when orchestrated well, improves the quality of the built environment, I hope this paper presents a unique multidisciplinary approach to the issue of informal settlements, combining elements of finance, urban planning, law, and policy. / by Kurtis C. Fusaro. / 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, 2018. / Cataloged from PDF version of thesis. / Includes bibliographical references (pages 70-74). / This thesis explores relationships between experiential retail and historic adaptive reuse, and develops an understanding of their mutual potentials. The emergence of e-commerce is pressuring traditional brick-and- mortar retail to focus on enhancing experiences irreplaceable by online shopping. Meanwhile, an adaptive reuse approach on historic structures carries forward the city's legend via story-telling. A space and a story make a place, with uniqueness, character, innovation, and sustainability. Between online and offline retail, physical space is the differentiator that activities take place and emotions are felt in person. I look beyond the boundary of asset types to study an experiential trend shared by hospitality, residence, office, and retail. The main difference between experiential and traditional retail is understanding customers' social needs as part of the experience. The socializing effects are partially reflected by social media posts, sharing about unique products, digitalized service, various activities beyond merely shopping, and special space. Historic redevelopment is centered around continuing the heritage and creating synergy. Adaptive reuse is a resourceful alternative to save historic buildings from demolition, but not to be confused with historic preservation. The success of adaptive reuse depends on the right creation of program, one that matches the history and activates the place by engaging users. Historic redevelopment conveys meanings and references to the past that enhance the experience of users. This synergy can be a powerful mechanism to create value in real estate. After examining 10 cases involving experiential retail and adaptive reuse, I see unique opportunities that match the space characteristics in experiential retail and historic buildings, especially in a mixed asset type. Experience is intensified by the collaboration of multiple programs, and strengthened by interacting with a unique historic story. With a theoretical framework summarized from case studies, I compose a practical "menu" of space revamps and program creations for developers to "order from". Based on a sample of approximately 2500 social media hashtags, I characterize unique retail experiences. Applying the menu, I make recommendations to redevelop LA's Bradbury Building, one of the oldest commercial landmarks in Downtown LA, to be a mixed-program experiential center. / by Alice Chen. / 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. / Cataloged from student-submitted PDF version of thesis. / Includes bibliographical references (pages 82-84). / This thesis investigates the use of the game theory and the real options theory in real estate development at the strategic level, trying empirically to explain different economic observations among different metropolitan cities and different property types. The real options theory provides a rich theoretical framework to analyze investment values in real estate development. It takes the market uncertainty into consideration, while the widely used neoclassical NPV valuation method takes a deterministic approach. A simplified real options valuation model is set up in this thesis to calculate the option premium value of waiting for developers. However, since it is done in a monopolistic setting, the strategic interaction aspect of real estate development will be analyzed using the game theory model. The interaction of the game theory model and the real options model will provide a comprehensive and powerful framework to study the timing strategy of developers. Using data spanning quarterly from 1995 to 2013 among 5 property types (single-family house, apartment, industrial, office, and retail) and 44 MSAs, this thesis analyzes the relationships empirically between the volatility of underlying assets, the land cost ratio, the option premium value, and the timing of development. The aims of the study are twofold. First, the study compares different market characteristics among different MSAs and different property types from the option game theoretic perspective. Second, it analyzes the effect and the use of the game theory and the real options theory in the context of real estate development. / by Chun Kit So ( Timothy So ) / S.M.in Real Estate Development