Thesis (S.M. in Real Estate Development)--Massachusetts Institute of Technology, Dept. of Urban Studies and Planning, Center for Real Estate, 2008 [first author]; and, (S.M. in Real Estate Development)--Massachusetts Institute of Technology, Dept. of Architecture, Center for Real Estate, 2008 [second author]. / Includes bibliographical references. / Real estate development is inherently a risky endeavor. Developers encounter varied risks during the different phases of a development project, from permitting to construction and through lease-up and stabilized operations. Flexibility allows a developer to mitigate some of these risks by capitalizing on potential upsides, and reducing the effects from possible downsides. Flexibility, and phasing specifically, enables a developer to manage risk more effectively by allowing a building to grow as market conditions warrant. This thesis investigates the determinants and implementation of vertical phasing, and suggests areas of applicability for vertically phased development. By "vertical phasing", we mean when a building is originally constructed to a certain height, but includes the intentional capacity for it to expand vertically in the future. Vertical phasing is an example of a real option "in" real estate development. A real option embodies a right, but not an obligation to pursue a future course of action. Flexibility, or real options, in real estate is important because it can add value to a project. The significant expansion of tall buildings is a recent phenomenon, though vertical phasing itself is not new. Expanding a one story building to two stories, for example, is a common example of vertical phasing. This thesis examines the decision and development process of major buildings that are constructed with the intentional ability to be expanded vertically in the future without disrupting the occupation and operations of the original building. While the intention is that the vertical expansion will take place at some appropriate time in the future, if such an opportunity never arises, the original building can exist by itself as a complete, fully functioning structure. / (cont.) Drawing from a study of four buildings in the United States and Canada, this thesis examines the context in which vertical phasing of buildings is employed. It first considers the various drivers that lead to vertical phasing. It then discusses the specific issues and challenges with respect to vertical phasing. This thesis argues that while vertical phasing of buildings is rare and complex, it is a viable method of development that has significant potential in enhancing the value of buildings. Specifically, vertical phasing is relevant to corporate real estate development, in which less quantifiable value drivers of a building are tangible and important. By evaluating the drivers and implementation of vertical phasing, this thesis shows that vertical phasing of buildings may be easier than commonly believed, and may be used effectively in corporate real estate development and possibly other sectors of the real estate industry. / by Jason R. Pearson and Kate S. Wittels. / S.M.in Real Estate Development

Thesis (S.M. in Real Estate Development)--Massachusetts Institute of Technology, Dept. of Architecture, Center for Real Estate, 2005 [first author]; and, (S.M. in Real Estate Development)--Massachusetts Institute of Technology, Dept. of Urban Studies and Planning, Center for Real Estate, 2005 [second author]. / This electronic version was submitted by the student author. The certified thesis is available in the Institute Archives and Special Collections. / Includes bibliographical references (leaves 57-58). / The returns and portfolio characteristics of core funds were tested for evidence of herd behavior and performance relative to the NCREIF Property Index (NPI), using a proprietary database that included data from 1985 to 2004. Tests performed include descriptive statistics, regression analysis, and attribution analysis. Results indicate that herd behavior tends to be somewhat correlated with the NPI return. Through our disaggregate (fund specific) analysis, we find that herd behavior, where managers base investment decisions on the collective actions of the market rather than their individual beliefs, may be present in the core fund industry. Regression analysis suggests that herding appears to be positively correlated with fund size and negatively correlated to leverage, fees, and persistence from the one-year lag of the deviation from the mean. Performance analysis results indicate that although fund leverage has increased significantly over time, the use of debt has produced little or no additional return to investors. We found that across funds, net returns to real estate fall short of the NPI, and that across time, there is a negative correlation between the performance of the index and fund performance relative to the index. / (cont.) Attribution analysis revealed that property selection returns have produced the greatest amount of return deviation from the NPI over time, and that selection and strategy returns are negatively correlated. Regression analysis suggests there is persistence in fund performance in the short term, that a fund's fee is positively correlated with gross returns, although that does not necessarily translate into higher returns to the investor, and that larger funds are negatively correlated with performance. / by Valerie Kwong and George Ryan Robison. / 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, 2016. / Cataloged from PDF version of thesis. / Includes bibliographical references (page 65). / Real estate development in China is a fast-paced business. Volatile market conditions have prompted Chinese developers to build and sell quickly in an attempt to mitigate market fluctuation risk, especially when the real estate market is hot. But are they leaving money on the table? We've conducted a rigorous quantitative analysis of Dushi Huayuan-a large-scale residential project in the fictitious city of Gangkou Shi-from the standpoint of its developer Acumen Properties. The thesis takes the form of a traditional business case study: we first crafted the story based on actual events, then built a Monte Carlo simulation model using Excel to test the value of flexibility specifically the value of dividing the project into multiple phases-at Dushi Huayuan, and finally designed three exercises for students to learn not only the technical aspects of modeling, but also the business concepts related to working in the Chinese real estate market. The exercises will walk students through the following: (1) build a simulation process to reflect the crucial exogenous dynamic economic variables that largely determine the project's financial outcome; (2) expand upon this model by introducing phases in the project to understand how this new flexibility can affect expected net present value; and (3) employ the use of a waterfall analysis to examine fairness from an investment perspective between joint venture partners using standard-market terms. Chinese developers-along with most developers worldwide-typically make decisions based on their experiences and intuition but without the use of detailed quantitative analysis. Our thesis ultimately seeks to change generally accepted industry practice by creating a pedagogical tool to help future real estate leaders better understand the advantages of using quantitative methods to inform rational business decisions. / by Qing Ye and Eric Mo. / 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. / 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 (page 59). / Since 2013, investors from the People's Republic of China (PRC) have made significant strides in the global real estate market, especially in developed regions such as North America, Australia, and Western Europe. From 2014 to 2016, this trend became stronger, and by 2016 Q3, China became the top cross-border real estate investment country by transaction volume. We ask the following question: After the prosperity of the last three years, will the global investment trends of PRC investors remain steady or not? This thesis first reviews the progress made by PRC investors in recent years and the key reasons for it. It then discusses PRC investors investment preferences and strategies. The discussion then focuses on includes pragmatic considerations of tax matters and domestic regulatory problems in the PRC. The thesis concludes by exploring new trends in the market and speculating about the future of cross-border real estate investments by PRC citizens. / by Qing Wang. / 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. 141-142). / Real estate investment firms have the ever increasing need for understanding their firm's strengths and weaknesses, their performance relative to their peers and competitors, and for developing assessment tools for facilitating more informed investment and management decisions. One potentially very useful tool to further these objectives, a tool that is so far underutilized and underappreciated, is investment performance attribution analysis. Such performance attribution may be broadly characterized as the partitioning of the total investment return of a particular manager or portfolio in order to quantify and help to understand and assess the components and determinants of the overall investment performance. Traditional investment attribution analysis, adopted from the securities investment industry, has focused primarily on the portfolio level, where property selection and allocation factors are the two primary attributes of total return that can be parsed and benchmarked. In the case of real estate investments, property-level investment functions such as operational management and asset transaction execution, which are not captured by a traditional attribution analysis, also play a major role in the overall investment returns. During the past two decades a system to drill the investment performance attribution down to a deeper level, separating the asset "selection" component into further breakouts, including income return and components of the capital return (cash flow change and yield change), have been propounded by influential firms such as the Investment Property Databank (IPD) based in the UK. In a 2003 article David Geltner proposed a system for property-level performance attribution (PPA) based on the since-inception IRR of each individual property investment. This thesis furthered Geltner's work on PPA by an in depth exploration of the application of the IRR-Based Property-Level Performance Attribution analysis based on a large-scale, real-world-based case study of a complete set of actual core-asset round-trip transactions completed by several internally managed funds in the institutional investment industry. Furthermore, this thesis explored the use of PPA for organizational management diagnostics, and thereby demonstrated the potential of using the PPA analysis as an investigative tool for developing plausible hypotheses about a firm's investment management strengths and weaknesses. / by Tony Feng. / 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. 83). / Housing unit prices differ among 75 street blocks per time period in Chengdu, China. Housing unit price's appreciation also moves differently in the 75 street blocks between 2005 and 2010. With solid transaction data acquired from Chengdu Housing Administration Department, two regression models, Level Model and Change Model are exercised to explore two questions: What are determinants of cross-section housing unit price difference and what are determinants of housing unit price movement in time? The findings are consistent with urban economic theory and actual practice in the market. In conjunction with physical attributes and locational features, the thesis found from the Level Model that economic and demographic characteristics, which are representations of urban economic growth, industrial restructuring and demographic transformation, are also significant determinants that have been capitalized into housing unit price at various levels. In a rapid developing city like Chengdu, the thesis found from the Change Model that instead of the change of various factors, inherent locational features and the initial price per street block play significant roles moving unit price upward in both short-term (1-year) and relatively long-term (5-year). Such finding exhibits consistent market anticipation that housing and amenity demand constantly outpace its supply in Chengdu. Additional Level Models defined by unit size reveal differentiated capitalization effects from same group of locational features. The result ties various sizes of units with corresponding housing products. Subsequently it proves that demographic structure is a significant determinant of housing price dynamics. Field trip and interview are conducted to bridge academic analysis with real market. The findings from qualitative research contribute valuable inputs to improve the models. Understanding determinants that are capitalized into price and move price appreciation is useful to household to guide wise investment. The research is also referable to developer who can make sound assessment on developable land with better understanding of its potential value. The more inclusive analysis of spatial housing price dynamics will assist policy maker to establish proper urban policy in the effort to balance urban structure between housing and jobs. / by Jin 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, 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. 85-87). / Real estate is often considered an asset to provide long term value enhancement and to protect institutional investors against inflation risk. It is a typical real asset due to the physical form and fixed geographic location with a steady return. However, real estate has its limitations. Risks associated with it such as lack of trading flexibility, special property management expertise required, and a growth prospect not always applicable towards the short term favor have impeded certain institutional investors from allocating major investment in real estate. In management of a dynamic investment portfolio, how institutional investors look at certain real assets is the key issue discussed in this thesis. Infrastructure, for instance, which can refer to roll roads, shipping or railways, is a comparable asset with real estate as it demonstrates a term with physical form and stable income stream. There are other types of real assets such as commodity, regulated utilities, and maritime assets which are also studied. This thesis delves into the dynamic structure of an institutional investment portfolio and targets to explore the following questions: What do real assets contribute to institutional investors' traditional stock-and-bond portfolio? What kinds of correlations do real assets have with typical equity and fix-income assets? How do institutional investors strategize their investment plan by allocating real assets in their global portfolio? The thesis is designed to study the underlying factors for determining the asset allocation framework from both a qualitative and a quantitative perspective. A quantitative analysis including mean-variance optimization, downside risk, correlations, risk parity and Value at Risk will test out how various asset allocation frameworks position real assets in a portfolio. The study also brings in selected real estate indexes to examine how different parings compare with each other and what impact does illiquidity exhibits on portfolio management. An interview-based research is designed to provide understanding of institutional investors' perspective on how they apply the theoretical framework to the real world practice and how they strategize the management of investment portfolios. / by Xiangyu Li. / 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. 83-87). / Real estate investment is becoming increasingly international. As China's economy rises as a major force in the world, its continuous growth in fiscal surpluses and accumulation of wealth are making up an expanding segment of the capital market. Traditionally, state-owned enterprises (SOE) and banks were important sources of international real estate investment from China; more recently, increasing high-net-worth individuals and private real estate equity funds have merged and are seeking opportunities around the world. This paper identifies the important policy indicators that are pertinent to Chinese private investors' activities in the U.S. real estate market, examines the investment landscape in both countries, gives particular attention to associated challenges, barriers and risks, and finally explores the potential business opportunities that can be recognized and turned into meaningful strategies. / by Ya Wang. / S.M.in Real Estate Development

Thesis: M.C.P., Massachusetts Institute of Technology, Department of Urban Studies and Planning, 2014. / 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. / Cataloged from PDF version of thesis. Page 124 blank. / Includes bibliographical references (pages 118-123). / This thesis aims to examine impact of financial decisions on the city morphology, specifically on the current crop of new city projects undertaken in India. While there has been some existing research on impact of capital market, institutional framework, on the existing cities and their struggles, there is littl that tis spoken about the motivations of development agencies, their manifestos and aspirations, for the new cities that are being planned. My research explores green field projects in an attempt to distill, through comparison and contrast, cities developed as a private or public goods. The physical design of the urban fabric of a city is a result of many forces. These could be the economic, social, cultural, political or the aspiration aspects that dictate the physical form of the city With the inflow of capital in the developing world new cities are being built from scratch in many parts of the developing world. Visualized as products in the real estate industry as investments and assured long term returns, these regions are conceived as places of enhanced productivity Cities are now considered the drivers of consumption and accelerateors of economic growth. India, with an increasingly open economy and history of social ideals, poses a unique dichotomy of resultant new city building processes. As the state edges towards more open markets pro-urbanization policies, disparate methods of developing and financing new city projects wIl emerge. The unique presence of two polar development strategies within the same macro context shall enrich this study and let me draw parallels to distill the parameters. The thesis shall explore the cases thorgh the lens of finance specifically and the implications of financial strategies on the resultant urban form. A narrative format weaves in the socio political and cultural aspects along with specific market conditions, of the two cases -Naya Raipur and Jaypee Sports City, and provides detailed accounts of the policies and agency practices, what landlords and realtors are responding to, and how ultimately these plans in place today evole into future cities. Ultimately, these findings indicate how deeply embedded both social and fianncial scenarios are in the development of cities and the need to question the adequacy of just one model instead of the other. / by Akanksha Raina. / M.C.P. / S.M. in Real Estate Development

Thesis: M.C.P., Massachusetts Institute of Technology, Department of Urban Studies and Planning, 2014. / 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.. / Page 93 blank. Cataloged from PDF version of thesis. / Includes bibliographical references (pages 89-92). / Gas stations are found throughout the US, but their ubiquity causes them to go largely unnoticed. Because their purpose - refueling vehicles - is so uniform and so integral to the existing automotive transportation system, stations share extensive siting and design similarities across many contexts. Recent corporate, market, and regulatory pressures have led to the closure of tens of thousands of these stations in the past few decades. Increasingly stringent Corporate Average Fuel Economy (CAFE) standards will likely continue the trend of station closures. CAFE standards are expected to reduce future US gasoline consumption and spur the production of alternative powertrain vehicles. Of these new powertrain technologies, electric vehicles (EVs) demand particular attention because their introduction has been quite strong and because their adoption has the potential to significantly change the location and physical environment in which vehicles are "refueled." EVs differ from other propulsion systems in that they rely on electricity for power. Unlike liquid fuels, which are most efficiently distributed from centralized facilities, electric power can be obtained from a number of dispersed outlets. This thesis seeks to rethink the physical infrastructure that is and has been necessary to fuel the US's vehicles by exploring the most effective deployment of EV charging systems and by proposing potential reuses for unneeded gas station sites. After studying vehicle travel patterns and EV charging requirements, at-home suburban charging systems emerge as the most effective way to support electric vehicles. In addition to the environmental benefits to the transportation system, solar and smart-meter components of this charging system enable the greening of the power grid as well. As such, this thesis posits that the most effective deployment of EVs and their associated chargers would be in suburban areas that currently have dirty energy profiles and high solar capacity. Another promising place for EV charger deployment would be at centralized stations along major transportation routes that could be co-located with uses that actively take advantage of the extended time it takes to recharge an EV battery. Especially in EV target regions, reduced demand for gasoline can be expected to further unlock opportunities for gas station property redevelopment. Challenges to reuse include environmental remediation costs and liabilities, but this thesis explores strategies for overcoming these obstacles, as well as redevelopment functions that take advantage of gas stations' small and distributed characteristics / by Andrew Turco. / M.C.P. / S.M. in Real Estate Development