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 (page 54). / How do the various categories of operating expenses for institutional grade office buildings vary with changes in rental income and occupancy? The general consensus held is that, following the linear relationship that exists between variable expenses, occupancy and income; a change in either occupancy or income would result in a change in variable expenses. The question is by how much and in what direction? This thesis contributes to answering that question by exploring how tax, utility, insurance and maintenance expenses for office properties, across key markets in the United States, vary with rental income and occupancy level changes. To achieve this, time-series data on income and expense data for office properties from Q1 2000 to Q4 2014 was analyzed using two panel regressions. One with fixed effects for buildings to exclude all idiosyncratic characteristics of properties and another with fixed effects for time that captured the building differences. The analysis shows that the elasticities of these expenses to changes in income and occupancy vary across expense type and also across geographic location. Additionally, in majority of the cases, these elasticities were statistically significant. / by Peter K. Owusu-Opoku. / 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 89-94). / For decades, construction productivity has been lagging behind the sectors of manufacturing, agriculture and many more, causing many problems to society. Importantly, productivity stagnation can generate housing crises by limiting the supply of additional structures, and prevents public authorities from developing their needed infrastructure. In this thesis, I assess the causes for such stagnation and provide a strategy to foster innovation. My analysis finds that the causes of stagnation stem from a lack of competitiveness that arises from a scarcity of long-term relationships with clients, information asymmetry across stakeholders, poor owner and design specifications. Combined, these issues disincentive innovation, as tendering processes do not focus on suppliers' productivity from efficiency gains or ingenuity in processes. In addition, built product size, complexity and uniqueness, as well as building codes inconsistency, all prevent the industrialization of the industry. My strategy to improve productivity is multifold. The first prerequisite to improving the situation requires promotion of collaborative risk sharing delivery methods, adoption of digitized communication tools and supply chain management. A second prerequisite is a mindset switch towards built products configurability, upgradability and easy disassembly, which will minimize waste, unsustainability and brownfield project issues. Once those prerequisites are reached, then our short- and long-term goals for innovation could be realized. Over the short term, transparency and true cost tendering will promote the industry with competitiveness and subsequent consolidation/integration that are necessary for productivity improvements. Over the longterm, the creation of a production-driven system will allow the industrialization of the industry, with standardization and repetitive manufacturing fostering continuous improvement. With such a rise of disruptive and innovative technologies, there will be a flow of at first efficiency gains and, potentially, in the long-run, productivity gains that meet the standards of the ever changing built environment. / by Nicolas Victor Joseph Gaspard Bolland. / 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 (pages 47-52). / I was raised in a formerly-communist country, where small apartments were mainly built to house working class families. People did not have many options and had to take whatever housing the state assigned to them. Most of those families remained in these assigned small units for the rest of their lives, many of which were growing families of 4 and more. With this unique personal perspective, I felt as if small units were the legacy of a past and archaic system. It appeared to me that in an economy where people have a choice, such type of housing would not be a very viable solution. However, to my surprise, the recent developments in major housing markets proved to me that I was wrong in my initial judgment. It sparked my interest to further research micro-unit housing market in gateway cities, the reasons and trends that influenced its growth in such cities as San Francisco and Los Angeles. / by Marine Potikyan. / 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. 79-81). / Success in frontier markets could mean high returns for real estate developers and investors. In order to succeed, companies must determine how to provide their products or services in an environment that may not necessarily adhere to familiar institutional, legal or even ethical norms. Strategists may never feel informed enough to make educated decisions because there is not enough data to populate sophisticated financial models. However investors and multinationals have a growing desire to gain exposure to underdeveloped markets. This leaves managers with the challenge of evaluating frontier investment markets and navigating risky foreign business environments. This thesis attempts to answer the following question: to what extent can a researcher establish a viable framework to strategically plan for and operate in frontier market built environments? To answer this question, this thesis shall first address the nature of "frontier markets," then proposes a framework for entrepreneurs or multinationals intending to penetrate a frontier market's built environment through either direct investing or real estate development. The framework is a qualitative model, a compilation of analysis tools used by scholars, economists, political scientists, and investors working with and in emerging markets. The framework assesses markets on a broader, strategic echelon as well as an operational business management level. Lastly, we populate the framework with current information from Iraq, one of the most challenging and interesting frontier markets in the world today. The conclusion assesses the utility of the framework by highlighting information voids as well as potential business opportunities. The conclusion articulates that frontier market analysis will never be as valid as analysis of the developed markets because frontier markets are inefficient and information is difficult to ascertain, thus satisfying the definition of "frontier market". The analysis framework will not yield empirical findings like accurate forecasts of NPV, PV, IRR, etc. It will return, qualitatively, institutional voids in potential business opportunities. Keywords: frontier markets, Iraq, real estate. / by Steven C. Watkins, Jr. / 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. / "September 2011." Cataloged from student-submitted PDF version of thesis. / Includes bibliographical references (p. 51-52). / This thesis provides an empirical analysis of the determinants of foreign direct investment in commercial real estate (FDIRE) in the U.S. We examine the major factors that affect levels of FDIRE in the U.S. and foreign investors' location preferences. First, using panel data from 2002 to 2006, this research develops a model to test the importance of GDP, GDP growth, national investment level, exchange rate, and interest rate in determining levels of FDIRE in the U.S. from major developed countries. Results of the study suggest that economic growth of a country unexpectedly encourages domestic investment rather than foreign investment, and depreciation of currency value of the host country attracts more FDIRE. Second, the study analyzes the spatial distribution of FDIRE at the state level for the time period 1999 to 2007. A set of location determinants is selected to explain the pattern of FDIRE. These determinants include size of population, personal income, commercial real estate vacancy rate, commercial real estate completion rate, population growth, and personal income growth. Results of the study suggest that foreign investors prefer larger and wealthier states for direct commercial real estate investment. There is also evidence showing that foreign investors begin to diversify toward less populous and less wealthy states. / by Min Liang and Sunghoon Yoon. / S.M.in Real Estate Development

Thesis (M. Arch.)--Massachusetts Institute of Technology, Dept. of Architecture; and, (S.M. in Real Estate Development)--Massachusetts Institute of Technology, Program in Real Estate Development in Conjunction with the Center for Real Estate, 2012. / Page 143 blank. Cataloged from PDF version of thesis. / Includes bibliographical references (p. 135-137). / Inspired by Singapore's recent effort in building its new skyline in Maria Bay, the thesis intends to employ econometric structural modeling techniques to Singapore's office market for the period from 1975 to 2011. Using data collected from Singapore's Urban Redevelopment Authority, the regression models established by rent, demand and supply equations, dissect the market behavior and project an understanding of the underlying correlation and market mechanism. With which, the thesis forecasts for the next 10 years, in quarterly interval, the movement trajectory of Singapore's office market. Living and working as activities in this current milieu where role play in the system of power are essential to success was problematized; In the era when social and financial "cloud participation" has given rise to ebay, Facebook, Twitter and Wikipedia, what does work, live and play mean in this current environment where indulgence and consumption for its very own sake is very much part of the cultural lifestyle. Where is Architect in this financial time? In as much as it is about providing plausible answers, this thesis challenges the existing power system in the Real Estate industry, instead of taking dweller's spatial appropriation as guerrilla activities, the thesis proposes ways that channels private equity "financial cloud participation" into system of value production. Architectural proposition therefore works in way which turns these underlying power struggle scenarios into formal expression. / by Aoran Alex Sun. / S.M.in Real Estate Development / M.Arch.

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 91-94). / The Low Income Housing Tax Credit (LIHTC) program is one of the most successful government subsidy programs for the creation of affordable housing in the history of the United States. Over its 27 year existence, more than two million affordable apartments have been developed or rehabilitated using private equity financing through the sale of federal tax credits. Over the past 12 years the industry has digested the first wave of transactions getting to the end of the 15 year Initial Compliance Period. This is the point at which the Investor Limited Partner (ILP) is able to exit the transaction without tax credit recapture risk with the IRS. There is often a recapitalization event that accompanies the exit, but many times there is not. Since the secondary market for both LP and GP interests both during and after the compliance period is relatively illiquid, it is difficult to discern the fair market value of such an asset. This is further complicated by the unique and multi-layered financing structures common in these transactions and the additional 15-year Extended Use Period requiring the property to remain as affordable housing, in many cases beyond its useful life. This study will use limited partner transaction disposition data provided by a national tax credit syndicator to create a hedonic pricing model to determine the factors that drive valuation at disposition. Using the sample of 223 observations, the characteristics of which closely resemble the population of dispositions industry wide, the resultant hedonic model suggests that a partnership's original total development cost, net operating income (NOI) at disposition, cash or reserve balances on hand at disposition, the strength of the rental market and whether affordability requirements are expiring are the driving forces behind valuation of ILP interests at Year 15. As expected, some common factors that drive valuation in conventionally financed multi-family real estate transactions, including transaction size and regional location, have little predictive impact on valuation as determined by the model. The results of the analysis are contained within, along with the policy implications and some suggested programmatic reforms that could help to enhance the value of LIHTC properties at Year 15 and thus increase the likelihood of long-term financial health and ultimate preservation as Affordable Housing. / by Jakob B. von Trapp. / 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. 107-110). / The retail industry in the 21st century is undergoing a confluence of transformative changes. In this paper we discuss particularly noteworthy changes related to demography, retail economics and the Internet. We note how, in reaction to those transformations, brick-and-mortar retailers have developed innovative strategies to maintain growth and store performance, such as urban market penetration and multi-channel selling. We also have done a rigorous analysis of retail performance across major U.S. markets to determine the ex post and ex ante effects of trends and strategy changes. The hypothesis of this paper is that the conventional definition of "good" retail real estate has substantially changed in the last decade. The analytic approach of this paper is to: 1) observe broad retail industry trends, 2) conduct industry interviews to identify corresponding retailer strategy shifts, 3) perform cross-metro analysis of retail performance and 4) extrapolate meaningful effects on retail real estate. This provides owners, operators and developers of retail properties insight into the evolving characteristics and needs of tenants as they adapt to the new retail environment. Conclusions include description of the attributes of markets, properties, tenant mixes and amenities that best support contemporary retailing. Commentary and analysis is also provided on the impact of e-commerce and bricks-and-mortar retailers' adoption of multi-channel selling. Some results are that larger, denser markets have less consumption per capita, but those markets are generally underserved and have greater store gross revenues. Retailers are motivated to enter urban markets with flexible prototypes and online platforms. Population growth serves as a wealth proxy and corresponds strongly with sales growth. Housing prices are positively correlated to retail sales. Income growth has a much stronger relationship to sales performance than static income levels. Ethnicities and incomes are sorted and stratified in dense markets, making performance forecasting more nuanced. Relatively higher Internet usage in a metro corresponds to significantly higher brick-and-mortar retail sales. / by Kevin William Fagan. / 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 (pages 51-54). / Through most of history cities have grown slowly, organically following the contours formed by the intersection of geography and commerce - with occasional guidance from master planners - to create resilient and equitable forms. But the industrial age begat zoning, new forms of taxation, and hastened infrastructure investments, all of which upended centuries of measured and incremental growth. Codified separation of distinct land uses required new methods of real estate taxation and enabled new forms of value creation. Time and cost savings in infrastructure construction facilitated exponential growth in the speed at which a city's form could change. Amidst the quickening morphosis, the city's ability to diligently and thoughtfully create urban forms that maximize equity for all stakeholders has been diminished; bureaucratic barriers to housing production increased costs, and necessitated subsidization in order to create affordable housing. In order to reenergize the city's ability to create an equitable city, we must reexamine our use of land-use regulations, tax policies, and formulate clear ways forward. This thesis first seeks a broad and versatile definition of an equitable city in order to understand the desired end-state of potential interventions. Second, the author explores the formal characteristics of the equitable city, the way current land-use regulations are either facilitating or impeding the creation of that form, and the potential for a better way forward. Third, the author taxonomizes the fiscal tools available to the city which influence the urban form. Lastly, the author looks at the Highland neighborhood of Austin, TX - a marginal neighborhood with recently completed light-rail stops, a regional mall being redeveloped into a mixed-use project anchored by a community college, and building typologies which do not comply with current zoning - and proposes palatable changes to the way real estate is taxed, which will facilitate the creation of a more just, equitable, and sustainable neighborhood. / by Witt McCall Featherston. / 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 59-61). / The real estate industry is very conservative and risk averse, yet innovation is critical to its long term viability. While innovation does occur in real estate development, it is often discouraged and not the standard approach. This thesis focuses on understanding the motivations and obstacles facing real estate developers who decide to pursue innovative products, processes and systems. The study explores the challenges of developing co-living, a recent innovative real estate product in order to understand why this product is taking off across the country, and how it has been implemented in Boston and New York City. Insight into the innovation processes are derived from site visits and multiple interviews with professionals from different sectors of real estate: developers, consultants and regulatory authorities. The thesis concludes by describing five principles of innovative real estate development, relating to: Market Demand, Vision, Adoption, External Forces and X-Factors. While these principles are derived from experience in creating co-living projects, they are illustrative and important for the innovation process in all types of real estate products. / by David S. Drobnis. / S.M. in Real Estate Development