Thesis (S.M. in Real Estate Development)--Massachusetts Institute of Technology, Dept. of Architecture, Center for Real Estate, 2008. / 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 64-65). / The practice of applying options theory to real estate investments has only recently begun. In particular, options in real estate are called "real options." Real options add value to real estate development projects by allowing developers to take advantage of positive aspects of the market and avoid negative conditions. There has not been much effort to rigorously quantify the value of applying flexibility to real-world development projects. In this paper, I will attempt to examine the impact of applying real options theory to a mixed-use development project, the "Parcl project," which consists of two office towers, a hotel, and a retail mall to gain better understanding of flexibility. This project is being constructed all at once based on predetermined assumptions about factors like rental rolls, sales price, and constructions costs. However, the deterministic model could result in a loss in case market conditions do not meet the assumptions set at the beginning. In this sense, applying real options such as phasing, deferring, and abandoning would be one of the ways to absorb the uncertainties in the market. This paper will try to figure out how much value real options can add to the project in terms of dealing with market conditions. For the analysis, the quantitative methods such as an engineering model and Monte Carlo simulation will be used. / by Kyungwon Kim. / S.M.in Real Estate Development

Thesis (S.M. in Real Estate Development)--Massachusetts Institute of Technology, Dept. of Architecture, Center for Real Estate, 2008. / 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 185-186). / What paths have real estate entrepreneurs taken to establish their own firm? Also, what characteristics did they develop and utilize in the process? This thesis gives the unique opportunity to better understand the life of the real estate entrepreneur. Also, this thesis shall add clarity to these questions by providing case studies and analyses through reviewing such topics by obtaining information from face-to-face interviews of leaders and legends in the real estate industry. Included is a study on the general characteristics that are utilized by entrepreneurs and their importance. Also, studies on the application of these characteristics and their statistical significance are discussed. These characteristics have been reviewed to create a better understanding of the composition of the entrepreneur and how the application of these factors will help in entrepreneurial achievement. This framework will also help create a better understanding of the case studies and the paths the real estate entrepreneurs took to establish their firms. For the development of the case studies, 12 entrepreneurial leaders in the real estate industry were interviewed based on a framework of questions. From this information, a case study is created to obtain an understanding of their family background, education, experience, path and characteristics. Each case study will be accompanied by an analysis section discussing the important steps and characteristics that led to the development of the entrepreneur's career. These individuals represent a variety of fields in the real estate industry including development, construction, service, and finance. In review of the case studies and analyses, 5 distinct paths are found which have led to the preparation of being able to establish a real estate firm. / (cont.) Also, it is shown that no set group of characteristics is utilized by each real estate entrepreneur. Yet, each entrepreneur provides premier examples of these characteristics and gives insight to their application in the real estate industry. / by Michael Kazmierski. / S.M.in Real Estate Development

Thesis (S.M. in Real Estate Development)--Massachusetts Institute of Technology, Dept. of Architecture, Center for Real Estate, 2008. / 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 78-80). / In an attempt to determine what business and regulatory factors are required for the successful establishment of a Real Estate Investment Trust (REIT) structure in the Philippines, we analyzed the macro and microeconomic factors affecting the Philippines property market. The proposed law governing the REITs in the Philippines was also analyzed and compared with other REIT regulation in Asia. In the Asian REIT industry, supply and demand issues are inherently important. However, regulations, governing their activities, are also a factor in their growth and success. On the Philippine REIT supply side, the office, retail and hotel sectors offer acquisition potentials for REITs. Key demand drivers for real estate in the Philippines have been the increasing remittances from Overseas Filipino Workers, which have increased consumer spending in residential real estate and consumer goods, prompting rent growth in the retail sector. Another factor is the phenomenal growth of the Business Process Outsourcing industry which is driving both demand for office and residential supply On the REIT demand side, there is a strong incentive for real estate developers/owners/sponsors to divest their properties into REITs in order to access an alternative and cheaper source of capital caused by the increasing globalization and securitization of real estate. Opportunities to create fee-based businesses through external management contracts with REITs also exist. For potential REIT shareholders, there is clear investor demand for a tax efficient, yield driven investment vehicle such as REITS, which provide, not only higher transparency, professional management, greater liquidity and more stable return, but also diversification for their local and global portfolios. / (cont.) A tax savings analysis was simulated using the current proposed REIT legislation and found that, although REITS provide significant tax benefits to residents and nonresidents, greater tax advantages are created for nonresident investors. The proposed Philippine REIT legislation is largely in line with international REIT standards. As is the case with other Asian REITs, it appears that Philippine REIT regulation shall be a case of walking-before-running. And as international REIT regulation is continuously evolving and changing, both the Philippine REIT public and private sectors should ensure that local market regulation adapts to the global markets. / by Delfin C. Wenceslao. / S.M.in Real Estate Development

Thesis (S.M. in Real Estate Development)--Massachusetts Institute of Technology, Dept. of Architecture, Center for Real Estate, 2008. / 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 56-57). / The intent of this thesis is to identify the demand drivers for ten retail sub-categories in the US and develop an understanding of how to best use this information to make better retail real estate investment decisions. This cross sectional study analyzes sales per population, establishment per population, and sales per establishment based on six independent variables and the 2002 data set of 54 metropolitan statistical areas. The independent variables are population, employment per population, income per population, precipitation, temperature, and population growth. The first portion of this thesis is to analyze the demand drivers for each retail category and the degree of effectiveness of each variable on retail sales performance. The regression results of this study have clearly demonstrated a measurable demand for each retail category given the nature of each product type. The last aspect of this thesis is the development of an investment strategy that examines the predicted results versus the actual sales figures to see if a certain city is over saturated or under-supplied with retail establishments by category. By understanding what is the exact demand driver for each category, real estate investors are able to use this information efficiently to make informed investment decisions based on demand drivers as well as retail store supplies. This methodology provides a reasonable and well thought-out strategy to avoid unsuccessful investment outcomes. / by Ai Kong. / S.M.in Real Estate Development

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Thesis (S.M. in Real Estate Development)--Massachusetts Institute of Technology, Dept. of Urban Studies and Planning, Center for Real Estate, 2008. / This electronic version was submitted by the student author. The certified thesis is available in the Institute Archives and Special Collections. / Includes bibliographical references (leaf 78). / With the current absence of a REIT-styled vehicle in China, this thesis examines the potential opportunities and obstacles pertaining to the future introduction of REITs in China. The thesis provides a comparative analysis on major REIT regimes around the world, in terms of formation, structuring and operation guidelines, to identify their level of similarity and variance. The thesis then shifts its focus to China, examining the development background of China's real estate sector and analyzing China's market fundamentals and regulatory environment. Lastly, the thesis provides a closer look at the REIT sector in Singapore and Hong Kong and discusses their operational experience of the assets in China. The thesis finds that REITs are regulated differently among countries. However, a number of core criteria must be maintained to ensure the success of REITs in China. Commercial real estate, although accounts for a small share of the real estate market currently, has grown rapidly in recent years and is at the beginning of a boom as China continues to grow and mature as a market economy. On the capital side, the Chinese real estate companies are heavily dependant on bank loans to finance their development projects and there is a strong need for alternative and diversified financing vehicles for future growth. However, China also proves to be a complex market with a unique state-owned land system, with many social issues to confront as a developing country and with a constantly changing and evolving regulatory framework. All of these pose numerous challenges to the adoption of REITs in China. It is clear that a REIT-styled investment vehicle fits the current and future needs of the Chinese real estate sector. Although China is not yet ready to adopt REITs by international standards, China must pursue the experiment of such practice amid of the challenges. China's growth path in the past thirty years with its remarkable economic reform has just proved this point. / by Tianjin Luo. / S.M.in Real Estate Development

Thesis (M.C.P.)--Massachusetts Institute of Technology, Dept. of Urban Studies and Planning; and, (S.M. in Real Estate Development)--Massachusetts Institute of Technology, Dept. of Urban Studies and Planning, 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. 81-83). / For generations, housing programs have sought to utilize redevelopment projects to accomplish broader community revitalization goals. Contemporary affordable housing practice embodies this idea in large housing development projects, often funded through government programs such as HOPE VI. This "Conventional" revitalization is primarily based on experiences within the distressed housing projects of large cites, on the false premise that the impacts of redevelopment will be the same in a small post-industrial city as in a large, economically diverse one. Housing developers entering the context of a small post-industrial city must reconsider this idea. They must understand an idea of "holistic" housing revitalization that leverages the development process to make positive economic, physical, and psychological impacts that specifically address the specific challenges in these cities, such low civic capacity, poverty, low governing capacity, large immigrant populations, and an abundance of vacant properties. Fortunately these places possess inherent assets, such as walkable scale, historic architecture and cultural institutions, that present unique opportunities which position them to lead a national economic recovery through sustainable building projects. This report focuses on three cases of current, innovative housing development: * An industrial mill conversion that creates a new mixed use neighborhood in Lawrence, Massachusetts; * An adaptive reuse of a prominent hotel in Flint, Michigan that has sat vacant for 30 years into new downtown student housing; and * A new apartment community for single-parent, full-time students in Owensboro, Kentucky. / (cont.) Against the background of the broader evolution of holistic housing development, the cases directly address the unique challenges of small cities. Comparing the cases and their formative partnerships, concepts and strategies yields a wide range of data to support an idea of Holistic revitalization in these places. The primary data include over twenty hours of interviews with project proponents and stakeholders, as well as development proposals, zoning opinions, financing applications, consultant reports and local press coverage. Together, they provide a detailed view of Holistic revitalization and the tools of its implementation in small post-industrial cities. / by Jeffrey Beam. / S.M.in Real Estate Development / M.C.P.

Thesis (S.M. in Real Estate Development)--Massachusetts Institute of Technology, Dept. of Urban Studies and Planning, Center for Real Estate, 2008. / 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 50-51). / There have been many studies about office demand with relation to employment focused at the MSA level. This paper investigates the relationship between office demand and office employment between downtown and suburban markets. The paper provides an analysis of office demand and employment across 43 downtown markets and 52 suburban markets for the years 1998 and 2006. Correlation and multi-variable regression analysis are used to determine the relationship between office demand, employment, and rent as well as the relationship between downtown and suburban markets. The analysis is divided into three parts. The first part focuses on levels of office employment against levels of office demand in each market for each year separately. The second section investigates the change in office demand against the change in employment and rents for each market over the two years. Finally, the third part analyzes the relationship of office demand, employment and rent between downtown and suburban markets. The paper uses employment data categorized by industry using the North American Industry Classification System (NAICS). Employee counts are estimated from the establishment data available by zip code from the U.S. Census Bureau. By using employment data at the zip code level, the study is able to split the MSA into downtown and suburban markets. The study focuses on six industries thought to use the majority of office space. / by Nikhil Patel. / S.M.in Real Estate Development

Thesis (S.M. in Real Estate Development)--Massachusetts Institute of Technology, Dept. of Urban Studies and Planning, Center for Real Estate, 2008. / 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 68-69). / In its Global Economics Paper Nc.134, the Goldman Sachs Economics Group highlights the West African country of Nigeria as having the potential to be among the next generation of emerging markets around the world the next eleven (N-11) - after their much publicized BRIC countries: Brazil, Russia, India and China. Nigeria - the only country included from Sub-Saharan Africa - is shown to have the potential to become one of the top 20 economies of the world by 2025: owing to such indicators as recent GDP growth - and projections for continued growth - and its substantial population. As is typical with emerging markets, rapid growth in Nigeria's economy translates into an equally rapid growth in the demand for institutional quality real estate and the first signs of this can already be observed in the country's major markets of Lagos, Port-Harcourt and Abuja. This growirg demand has however been met with very limited supply, resulting in high and growing rents in these markets and an opportunity for profitable real estate investment, where they can be found. This paper examines the role of the public sector as one such source of real estate investment opportunity: The public sector having hitherto played a very active role in the country's real estate development. An analysis will be made of the historical development of public sector inflence on real estate; and then an evaluation made, on the opportunities being created, as this influence is directed towards encouraging private sector investment and expertise. / by Oladimeji Odusote. / S.M.in Real Estate Development

Thesis (S.M. in Real Estate Development)--Massachusetts Institute of Technology, Dept. of Urban Studies and Planning, Center for Real Estate, 2008. / This electronic version was submitted by the student author. The certified thesis is available in the Institute Archives and Special Collections. / Includes bibliographical references (leaf 69). / This paper introduces three new tools for the analysis and replication of real estate development returns. In particular, this paper discusses advanced sensitivity analysis, real estate development return indexes and synthetic real estate development investments. The advanced sensitivity analysis allows us to produce subjective ex ante return distributions. This analysis will allow developers and investors to "see" the shape of their investments return distribution. The benefits of knowing the shape of the subjective ex ante return distributions is that it may help developers and investors make better decisions and negotiate specific terms with each contributor in the capital structure. The ex post analysis allows us to produce development return indexes useful in the benchmarking of real estate development performance and in the creation of synthetic development investments by way of the new real estate derivatives. The development return indexes are created by transforming MIT's Transaction Based Index (TBI), which tracks stabilized property returns, into development return indexes through the use of a stylized mathematical model. / by Matthew S. Flowers. / S.M.in Real Estate Development