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. / The ever evolving macro and microeconomic environment makes real estate developers evaluate their development strategies. They do so in order to generate a maximum present value of profits from their projects. More importantly, they want to avoid completing the projects in an unfavorable environment and missing the financial targets. As the complexity in the production of a real estate project increases, orchestrating the various parts becomes even more important in reaching the desired financial outcomes. Hence, phasing plays an important role as it brings the flexibility to break the whole project into various parts or phases, which could function as standalone entities with or without other parts or phases. And so, it is important to consider how to delineate the project components between the various phases to achieve maximum profitability? The model developed here provides a framework for users to arrive at an optimal phasing scheme for their proposed projects. It is a transparent, easy to use model, which can help a user understand the value generating parameters while evaluating various schemes. It helps one conduct a deterministic analysis, i.e. without uncertainty, to explain the impact of four different parameters - project production profile and duration, real estate cycle periods and phases - on the phasing flexibility of a project. Eventually, a user can run probabilistic analysis including uncertainty in the real estate cycles and phases to determine an optimal phasing. The output from the deterministic analysis combines large amounts of data in a graphical array bringing clarity in phasing decisions. Finally, the probabilistic analysis combines information from the deterministic analysis helping the user arrive at the optimal phasing. / by Saurabh Jalori. / 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. 98). / New Urbanism has been described as an urban design movement promoting the master planning and development of communities that have walkable, human-scale neighborhoods while integrating the necessary elements of modern life such as vehicular traffic and parking, wide ranging retail offerings, and diverse employment centers. As its core, New Urbanism attempts to counter the multitude of problems stemming from the rise of automobile transport and resulting mass migration to the suburbs in the 20th Century, including sprawl, a lost sense of local community, lack of diversity, untenable housing and transportation costs, arduous commuting times, negative environmental impacts, and harmful effects to individuals' physical health. There have been a number of smaller -- "town-scale" -- New Urbanist developments built since the movement gained traction and formal organization in the 1980s. These communities have proved their mettle not only as positive social engineering experiments, but also as profitable business models for real estate entrepreneurs. The context for New Urbanism has changed greatly over the past several decades. Today, design and development firms are undertaking the construction of secondary cities and urban nodes with housing units numbered in the tens of thousands and areas measured in hundreds of acres. These "city-scale" developments carry risks and uncertainties that eclipse the rather controllable and largely foreseeable nature of small town development by requiring exponentially larger amounts of capital over periods typically extending more than a decade. The phasing in of the wide array of product types call for clear vision, steady leadership, and stalwart relationships, despite the real challenges of fickle political support, unpredictable economic cycles, and increasingly opportunistic labor pools. The thesis will primarily focus on Miasteczko Wilanow, a master planned community in southern Warsaw, Poland. Supplemental research, through comparisons to Kentlands, Maryland and Pinehills, Massachusetts, will be presented. Through on-site interviews and analysis of historical documentation, the thesis will aim to 1) present the initial considerations and intentions of Miasteczko Wilanow; 2) chart the development's progress and evolution from groundbreaking to present day; and 3) present conclusions and potential solutions towards better planning and implementation of similar "city-scale" projects. / by Edward J. Olchowicz. / 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. 49-50). / This study examines whether or not investors behave rationally when they price the U.S. office properties. After reviewing several previous studies on the market efficiency, this paper makes three new attempts: first, we employs the actual information on transactions and rents at the property level to resolve the substitution problems; second, we introduce another pricing method which use gross yields and typical cap rate method; lastly, Shiller Test with those actual data is conducted to determine whether future rental growth can be predicted by both or either of those two pricing methods. The major empirical results can be summarized into the two findings: 1) in the pricing models, the gross yield reflects a property's future rental growth, whereas the cap rate is mostly correlated to the relatively short-term rental growth in the past, 2) in Shiller Test, the future rental growth of a property can be forecasted by the gross yield, not by the cap rate. These findings suggest that although not perfect, investors of the US office properties, at least partially, forecast the future income of the investments, and reflect them into the pricings by means of gross yields rather than cap rates. / by Jinbae Jeong. / 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, 2016. / Cataloged from PDF version of thesis. / Includes bibliographical references (pages 131-135). / This thesis evaluates the relationship between rapid rail transit accessibility and investment property values through a series of interviews, literature and report reviews, and a quantitative empirical analysis of over 1,000 investment property sales transactions. Theory tells us that within urban environments, proximity to rail transit generates value that accrues to the real estate owner. Initiatives in various municipalities across the world have attempted to tap into the value created by major projects to help finance infrastructure investment, but there has yet to be one method that is universally applied. Major infrastructure improvements are expensive, time consuming, and challenging to deliver. While there are multiple hurdles to overcome in order to create an expansion or new rail project, finding funding sources is amongst the most difficult. A large focus of the thesis is understanding value creation along rail access nodes in pursuit of evaluating alternative financing sources. We take both a qualitative and quantitative approach to understanding the value creation, including the "announcement effect" prior to actual completion of the infrastructure project. These issues are explored through an examination of the practices in the Boston Metropolitan Region. Specifically, we use a current, in-progress rail expansion, the Green Line Extension (GLX), to investigate the process of delivering a substantial infrastructure project and its impact on real estate value. Such projects have far reaching impacts and effects, so throughout the thesis we broaden the lens and highlight issues, ancillary benefits, and experiences of other cities that have endeavored to undertake similar projects. Among our major quantitative findings, we observe that, within the Northwest Boston Basin (our focus area), having close proximity to operational rail rapid transit stations adds up to $48/SF, or nearly 39%, to property value, holding all else constant as best as data allows (including land use). We find some evidence that the GLX project may ultimately increase property values even more than this, as our study indicates that properties near planned GLX stations appear to have already increased substantially in value relative to otherwise similar properties subsequent to the announcement of specific planned station locations in 2008. / by Austin Paul and Stacey Spurr. / 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. / Page 53 blank. Cataloged from student-submitted PDF version of thesis. / Includes bibliographical references (page 52). / Modern Portfolio Theory has been developed over the last fifty years, and there are several studies linking Modern Portfolio Theory with the allocation of real estate property in multi-asset portfolios. However, in reality, most real estate fund managers don't use MPT as a guideline when they are structuring a portfolio and deploying allocation strategy for a real estate fund. The main reason for this gap between theory and reality is that the traditional mean-variance approach of MPT requires accurate data of variances, covariance and expected return over the long term; and those data are quite difficult to collect on an ad hoc base. This Thesis applies a new technique to examine property asset allocation strategies and improve the performance of a real estate investment sample portfolio in the US. We straight-model the portfolio weight in each property type of asset as a function of the asset's characteristics: either physical attributes such as property size, vacancy rate, property type, location etc.; or financial attributes such as Cap Rate. The coefficients of this function are found by optimizing the investor's average utility of the portfolio's return over a certain period of years. The aim of this approach is to find a simple and easily modified methodology for real estate portfolio managers when they are deciding on acquisitions and making portfolio policies. In general, this Thesis aims to apply the new technique to help practitioners and other researchers improve the practical implementation of optimal portfolio policies. / by Tingting Fu. / 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. 149-151). / The thesis aims to address the long lasting phenomena of evolution of financial services industry both in US and Europe. The topic has never been more emphasized since the Great Depression. The dramatic fact of cost cutting and diminishing the headcount in financial services industry creates question if the geographic location has substantial effect in their business activities. This study is conducted to analyze whether there is substantial change in the geographic preference of financial services industry which can result immigration away from the Metropolitan Statistical Areas (MSAs) like Chicago, New York in US and London, Paris in Europe to smaller MSAs. This thesis presents a quantitative model to find out about the historical trends, correlation with other significant variables and significance of the causalities between the variables. Furthermore, the qualitative part of the thesis will try to explain the motivations behind the change and the accelerations and decelerations of the trend at a certain point of time. The thesis examines and tests the hypothesis in two parts, US and Europe with a comparative approach. In the first section of the thesis, the specialization and concentration variables of US will be computed and ranked by taking 1974 as base year in order to observe the evolution since then for each category and subcategory of sectors. The trends of those variables along the time horizon as well as the correlation to other variables are explained for the top 4 and top 10 MSAs. Moreover, the significance of those variables is tested in order to verify the reliability of the results. / (cont.) In the second section, previously selected nine major cities in Europe are selected according to the criteria of availability of continuous data along the time period, level of the finance employment and total employment levels. Although the detailed data related to subcategories of the finance industry were not available, the value added measures of financial industry shed light on productivity measures at each city level. The outcomes of the two studies is compared and contrasted and the reasons of the deviations are investigated. Therefore, the study is also a gateway to project what trends may be expected in the future. / by Pinar Boyar and Onur Celen. / 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, 2016. / Cataloged from PDF version of thesis. / Includes bibliographical references (pages 45-46). / Modem mixed-use development has gained significant popularity since its conceptual introduction in the 1960s. Numerous benefits and risks have been elaborated on throughout the literature, but even today little empirical evidence exists to support these suppositions. Additionally, major data providers to the real estate industry, such as NCREIF, NAREIT, RCA, and CoStar, do not currently provide comprehensive data that identifies mixed-use developments. As such, financial analysis associated with mixed-use developments often segregates the project into its constituent uses and evaluates each use's performance individually, without much consideration, if any, for potential synergies. This study creates a database that allows for evaluation of transaction prices against different use-mixes for Boston, Massachusetts. We analyze this data for a better understanding of how and where premiums exist in this market, and to confirm the overall validity of our approach so that the methodology can be expanded to other markets. With over 2,200 commercial property transactions from Boston, Massachusetts in the database, we conclude the following: First - location matters, and better amenitized neighborhoods (i.e. mixed-use neighborhoods) are well correlated with higher property values. Second - value in mixed-use buildings is likely derived from higher density and/or lease-up speed rather than operational premiums (e.g. higher NOI or lower perceived risk). Third - larger master-planned, mixed-use developments with 3 or more uses tend to be located in less amenitized (i.e. less desirable) locations, and benefits associated with the mix of uses provided is insufficient to completely overcome the negative externalities of the general location. As such, these developments typically under-perform against the general market. / by Jason A. Tilley. / 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 59-62). / This thesis examines the spatial and operational efficiencies of major US retailers in relation to their physical real estate and e-commerce footprints. The continued rise of e-commerce has altered the dynamics of the retail industry in such a way that has forced retailers to drastically reallocate their resources to stay profitable. One of the biggest questions modern retailers face is how much traditional brick and mortar retail space should be retained as opposed to other resources dedicated to delivered goods, which can include inventory warehouses, distribution centers, fulfillment locations, or simply a strengthened online presence. To shed light on this issue, we conduct a cross-sectional analysis that investigates the leading factors shaping retailer efficiency and effectiveness using performance data from over 120 of the largest retail companies currently operating in the United States. The results show that e-commerce sales, indirect sales, and gross margin have positive correlations to distribution space share, employment efficiency, and spatial efficiency and have negative correlations to total cost share, labor cost share, and space cost share. We also determine that indirect sales and gross margin have no correlation to e-commerce sales and accumulated store square footage. By understanding the drivers behind retailer performance, new insight for the outlooks of both retail and industrial real estate asset classes can be gleaned, which can prove to be beneficial to retailers, landlords, and developers alike. / by Edward C. Tung. / S.M. in Real Estate Development

This electronic version was submitted by the student author. The certified thesis is available in the Institute Archives and Special Collections. / 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 / Pages 105 and 106 blank. Cataloged from student-submitted PDF version of thesis. / Includes bibliographical references (pages 96-101). / This thesis assesses the residential real estate development industry in Greater Boston and makes policy recommendations to increase the supply of middle-income housing. Boston's rapid growth in the decade since the Great Recession has caused a housing shortage for middle-income families who cannot afford luxury housing nor qualify for subsidized units. This analysis addresses the problem with a broad study of the real estate market using public reports, market data, and professional interviews. It concludes that opportunities for middle-income housing can be expanded by adding supply to the larger market, reducing development costs to build housing in naturally affordable areas, and utilizing funds for income restricted housing. This thesis makes thirteen specific recommendations in six categories, including land use and zoning, design, construction, transportation, finance, and taxes. These recommendations can be implemented together or individually to mitigate high housing costs for middle-income families in eastern Massachusetts. / by Phillip D. Cohen and William T. Stattman. / 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

This electronic version was submitted by the student author. The certified thesis is available in the Institute Archives and Special Collections. / 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 student-submitted PDF version of thesis. / Includes bibliographical references (pages 63-64). / This study introduces a geographical approach to analyze the market for new housing in Bogota, Colombia and address limitations of currently available research that is not sensitive to underlying spatial determinants in this city. The overall purpose of this investigation is to provide a framework to evaluate this market from a data-driven perspective in a context where information is often limited or disperse, while illustrating the importance of spatial interactions to develop estimations through quality-adjusted hedonic price models. The analysis is based on a dataset with information of more than 400 thousand new condominium transactions during the period between August 2010 and August 2018 in Bogota and surrounding municipalities. The properties are reverse-geocoded, assigned to their specific local planning jurisdictions within the city and surroundings, and analyzed in relation to their structural parameters. / The intersection between transactional and spatial data is explored to provide three approaches that contribute to the notion of the importance of social-political territorial subdivision as a driver of the residential market, while suggesting an initial route to develop accurate predictive models based on location rather than overly-detailed datasets for this city. The first approach consists of a comprehensive data summary that integrates several variables into graphical and geographical representations to portray urban characteristics of the city, reveal patterns and provide insights through the lens of the new housing market. The second approach involves the construction of quality-adjusted housing price indices for new housing. / The precision of a model with limited structural attributes is enhanced by including a combination of neighborhood fixed effects and factors that provide a qualitative assessment of the properties' socioeconomic context, a method that results effective to substantially augment coefficients of determination and lower residual standard errors. The scope of the price index is then expanded to analyze price dynamics according to locations and socioeconomic strata. Finally, the same methodology for the construction of the price indices is implemented to generate estimations for property area and prices at individual levels. / by Sebastian Perez Sarralde. / 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