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. / Cataloged from student-submitted PDF version of thesis. / Includes bibliographical references (pages 127-130). / Despite a significant addition of new multifamily housing stock into Boston's residential rental market, Boston in 2014 faces a considerable shortage of middle income housing supply relative to demand. Both the supply shortage itself and the related city-wide prevailing high cost of residential rents arise out of conditions attributable in part to (i) high costs of construction within the Boston market and (ii) the greater Boston area's large graduate student population. Boston's public officials, under the new Walsh administration, have been actively searching for approaches that the city might adopt in trying to address this housing supply shortage and its impacts on the city's middle income households. This Thesis advances one such approach by exploring how Boston might implement a specialized permitting process to incentivize the private development of a certain type of large-scale multifamily or mixed-use project. Specifically, these projects are ones that incorporate a component devoted to graduate student housing under a master lease with a Boston area university or teaching hospital. The recommendation for this approach is delivered through an exploration of the various characteristics of this type of real estate development project, referred to as a Graduate Student Anchored Project ("GSAP"), including: (i) the ways in which the specialized permitting and zoning review process applicable to GSAPs might need to differ from existing regulatory conditions; (ii) GSAPs' design, cost and leasing dynamics, discussed both in general terms and with specificity through the use of a hypothetical GSAP development on two parcels of land in Boston; and (iii) an analysis of the financial feasibility of developing a GSAP within the current market conditions -- and the types of participation which might be needed from the city, building trades union and/or university master lessees to ensure such feasibility -- through the use of a pro forma model specifically designed to accommodate this type of real estate development analysis. / by Stephen Thayer Davis. / 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 (pages 69-70). / Sole sourcing, or acquiring grocery anchored properties that are marketed to only a few prospective buyers, is favorable to general partners, who will oversee and run the property, because it increases their chances of acquiring the target. Furthermore, this is beneficial to their limited partners who have provided meaningful sources of capital in order to acquire the property. The hypothesis is that by tracking outstanding commercial mortgage backed securities (CMBS) loans coming due in the next several years, collecting data on current owners/borrowers, attempting to understand their wants and needs at asset and portfolio levels, and providing solutions to their circumstances while effectively marketing to engage existing owners of grocery anchored retail real estate assets in US metro markets with favorable demographics, one can increase the likelihood of closing off market transactions with prospective sellers while not using brokers through a system that is replicable across various real estate property types. The conclusion is that evaluating CMBS loan maturity and other data-driven advances to sole source deals are currently underutilized in the market. Currently, firms must first define an investment thesis internally. Next, the team should gather property and owner names of target markets and submarkets that fit the established investment criteria. Analyzing owners' portfolios, fund lives, and tenant expirations builds understanding behind events that trigger property sales. Furthermore examining CMBS loan maturities and outstanding property-level debt should be analyzed when targeting properties, but this strategy has not been as widely adopted as it will be in the future. Building and establishing relationships in the market will remain critical and marketing directly to brokers and owners is essential. This is believed to be a replicable strategy across markets to source off market deals of grocery anchored retail centers today. In the future, data-driven acquisition targeting is expected to increase. Firms that adopt these strategies, in conjunction with proven methods utilized today, will be better positioned to source and close off market acquisition. / by James French Mayo-Smith. / 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 66-69). / Considering Mexico's size and fundamentals, the Private Equity Industry in Mexico is underdeveloped but quickly growing. In an emerging market with over 60% of its population in its work force, and whose middle class will almost double by 2025, opportunities are emerging in all sectors. Private Equity funds could play a key role in financing and seizing them. Private Equity has had a low penetration in Mexico because of an immature financial sector, a legal system with a weak judiciary branch and a high concentration of family-owned businesses without institutional practices, among other reasons. However, this sector's potential in coming years is significant. The industry attempts to double its size by the end of this decade, translating into more available money at better prices. The question is: how can the government and industry leaders unlock this potential? Several actions at all levels of the public and private sectors are needed to access available capital. The purpose of this thesis is to show the trends, opportunities and challenges regarding the Mexican Private Equity Industry, focusing on real estate investments. Today, the investment cycle in the real estate arena is complete, generating confidence for Private Equity funds. A lack of supply in the Mexican market, regulatory changes allowing local pension funds to invest in alternative investments, and the introduction of Mexican Real Estate Investment Trusts as institutional buyers have provided managers and developers everything they need to capitalize real estate investment opportunities. Still, there are multiple challenges for the growth of the Private Equity Industry: authorities need to ensure regulation enforcement, existing vehicles such as "Structured Equity Securities" must improve for fund managers to raise and deploy capital, and the reforms underway (specifically the financial reform) must bring better long-term debt opportunities. If public and private entities decide to get in the same boat, Private Equity Investments can bring unprecedented benefits for funds, developers and the whole nation. The equity is now available and regulatory framework seems more investor-friendly. It is the turn for industry leaders and managers to guide their businesses in seeking institutional funding and thus contributing to Mexico's growth. / by Ariel Fernando Cruz García. / 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. 79-80). / How can volatility as well as other dynamics and characteristics in hotel market fundamentals affecting risk be better understood? This paper explores that fundamental question along with other more specific questions that naturally follow: What are the markets and hotel sectors that exhibit the most volatility in RevPAR, and its various components: occupancy, ADR, absorption and completions? How can markets be characterized as more supply driven or demand driven? How can market revenue metrics be characterized as rate or occupancy driven? What determines the variations in these metrics? What markets behave similarly? What do these findings mean in terms of various risk management practices? This paper develops a model for the systematic analysis of hotel markets based on observed trends in historical data. The paper first calculates measures of volatility. It then develops a model to characterize markets based on which fundamentals play a larger role in hotel market dynamics. It then provides a further comparison of markets based on which exhibit similar movements in RevPAR. The findings then are analyzed for their meaning in terms of risk in hotel markets. Finally, the findings are interpreted to reach conclusions about the nature and determinants of volatility in hotel markets, and how to better mitigate these risks in portfolio selection. / by Brian Cason. / 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 38-39). / Using a sample of 1458 industrial properties with 36,450 quarterly observations, we apply a pair of OLS models to predict property-level NOI and capex. We then synthesize the results by modeling capex as a fraction of NOI, which we treat as a measure of property capex performance. We model capex and NOI with a series of hedonic variables that account for property and market characteristics. Travel time to the nearest CBD predicts neither capex nor NOI, but building age strongly predicts both. We find that NOI declines continuously as buildings age, first quickly and then more gradually. Capex is lower in new buildings but rises over time, peaking after 30 years before declining. NOI and capex are strongly associated with building size, but the relationships are not linear. Large buildings experience economies of scale with respect to capex and diseconomies of scale with respect to NOI. Because the capex economies of scale are more pronounced, capex fractions of NOI are smaller in large buildings. Capex fractions of NOI rise and fall over time in a manner roughly similar to total capex, but the initial fractions are low and their peaks lag peak capex by 5 years. We find that capex fraction of NOI is lower in top markets when property characteristics are held constant. But property characteristics are not consistent across markets. We find that this fraction is actually similar across the country, as the economic efficiencies of top markets are offset by the inefficiencies of their smaller and older industrial building stock. / by Stephen James Gallagher. / 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. / In title on title page, double-underscored "TM" appears as superscript. Cataloged from student submitted PDF version of thesis. / Includes bibliographical references (p. 58-60). / SmartSpaceTM, or "S2" for short, is a super-efficient, super-cool, super-small studio apartment with many built-in features designed to be built in very high density, prime, city locations. This thesis has two main objectives: 1) explore the design of SmartSpaceTM and recommend changes so that it will better fit the needs of its users; and 2) identify target markets and locations for S2 development. To achieve the first objective, I stayed in an S2 prototype unit for five days and five nights to get the full SmartSpaceTM experience. During my stay, I surveyed 14 graduate students and young professionals to collect their feedback regarding the design of the unit. My S2 experience was generally positive, but the unit felt more like a hotel than an apartment. To live there for a year or more, I recommended among other things, a larger, more functional kitchen, a redesigned bathroom/shower, and a bigger closet. Survey participants had similar and additional detailed feedback. The suggestions were reported to the developer and architect working on S2 so the improvements can be made. To achieve the second objective: 1) historical trends and precedents of small living space were studied; 2) housing representatives at major universities were interviewed about graduate student housing preferences; 3) patterns were identified in the S2 survey results to make conclusions as to what groups of people will most likely be interested in living in S2; and 4) a methodology was created utilizing demographic and rental data to find the most appropriate locations for S2 development. / (cont.) Finally, the site where the first S2 building will be built was examined and assessed using the same criteria as those used in the site-selection methodology. The identified users are: graduate students, workers on temporary assignments (interns, traveling nurses, consultants, etc.), and recent movers. The locations found to be best for S2 development are: Financial District, Gramercy, Greenwich Village, and Midtown in Manhattan; Pacific Heights and Western Addition in San Francisco. The development site in Berkeley was found to be a fair location. / by Si Yuan Qiu. / 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, 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. 103). / This paper is to define the demand and supply factors and to develop a system to forecast the future development of medical office buildings. At this juncture of time when the health care industry is facing historical changes due to demographic shift, economic challenges and legislative moves, understanding the market mechanism of medical office buildings that provide easy accesses for medical service to aging population, carry lower costs for health care system, and promote the preventive care in medical practices has never been more critical. Medical office buildings as a real estate product type have unique market and development mechanism. They house medical services and have commercial and retail real estate characteristics. To understand the demand and supply of medical office buildings, health care industry that provide medical services, population consuming medical services and real estate industry develop and manage the physical space need to be observed. By using panel regression to analyze historical economic, population and health care employment data across metropolitan areas, we can establish a system that explains the medical office building market. We further quantify the future medical office building demand based on the forecasted economic data and the model established in this paper. The future development of medical office buildings is intricately tied to many factors including the trends predicating the scale and speed of the development. Using the historical events as guidelines and the system established, this paper presents positive outcomes for the demand of medical office buildings under different scenarios. / by Yu-Hua Wei. / 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 44-46). / Over the last twenty years in Massachusetts, there has been significant focus on a shrinking labor supply and material cost escalation as they relate to rising construction costs. However, there are other factors attributing to increased construction costs that are often overlooked. In these twenty years, four editions of the Massachusetts building code have been released; Massachusetts is currently governed by the 9 th edition. Since the 6 th edition was released in 1997, the code has expanded to include increased seismic requirements, improved fire prevention, and the energy stretch code. However, code changes are rarely included in the industry discussion when trying to explain rising costs. According to The Greater Boston Housing Report Card from 2015, "... the cost of developing urban projects in the Commonwealth increased by nearly 40 percent more than overall inflation" (Bluestone) since 2011. This suggests there is more at play than simply a high volume of work; and while there is no disputing the cyclic nature of the real estate market and the sheer economics of supply and demand, this conversation needs to be expanded to include regulatory influence - specifically building code. The building code in Massachusetts is reviewed and amended by a qualified, volunteer board of industry professionals called the Board of Building Regulations and Standards ("BBRS"). There is a public review process for code changes and avenues for the average person to request a variance or submit suggested amendments. However, this service is severely underutilized by the commercial industry. The intent of this paper is to analyze the relationship between the development and regulatory industries through the primary filter of cost management. Through this lens, I will look at the role of code ambiguity, the layers of regulatory enforcement, and the distribution of liability and the impact on construction cost. Based on interviews with industry professionals, I have identified the primary inefficiencies in the interactions between the two industries and developed three viable solutions to address some of the criticism. These solutions address the misalignment of interests between parties, the subjective assignment of liability, and the opaque, intimidating processes surrounding code variances and appeals. / by Teri Ford. / 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 52). / Worldwide, the elder population is growing- the number of people aged 60 years or over will be 1.4 billion by 2030, an increase of 56% from 2015. As a growing economic force, the elderly will require more specialized services such as housing, health care, transportation, pension plans, and public spaces adapted for their use. Mexico is no exception; by 2030, an estimated 30.5 million Mexicans will be over the age of 60, making up 22.2% of the total population. Accompanying cultural shifts mean that families are no longer well equipped to care for elders as they have been in the past, and government and nonprofit services designated for seniors don't ensure them a high quality of life. This study presents a business plan that creates a private, profitable, service-enriched housing development that will cover specific needs of housing and assistance for elders that require assistance with daily activities as well as those with dementia that require round-the-clock assistance. The mission of the business, besides creating a profitable development, is to create a secure facility that enhances the quality of life for residents by implementing the "best practices" used by experienced Assisted Living and Memory Care developers and operators in the United States. / by María Fernanda Sánchez Attolini. / 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. / Cataloged from student-submitted PDF version of thesis. / Includes bibliographical references (pages 48-49). / This thesis aims to compare five systems of econometric equations to describe the Toronto office market. It compares four structural systems differing in their demand equations and a non-structural system that does not require predefined relationships to exist between variables. Within the structural system of equations the predefined equations require that real rent is estimated solely from vacancy, long-run supply is dependent upon real rent and changes in employment only affect demand. Demand can be estimated either directly by estimating occupied stock and obtaining vacancy through an identity or by estimating vacancy; both occupied stock and vacancy can either be estimated in levels or estimated by an error correction model. Through the analysis of the structural models it is found that real rent shows significant momentum of real rent one year previous. As well the long-run supply curve is rising, while the real rent curve is not rising through the analysis period, as such the long-run supply is estimated in differences as the theoretical relationship between real rent and long run supply in levels cannot be estimated with the correct sign for the Toronto market. The structural demand equations show that error correction terms add value to predictions of demand. The nonstructural model is defined as a vector autoregressive model and allows the variables to freely interact between themselves without the restrictions placed in the structural model. When comparing the structural systems to the non-structural system in the back test, the non-structural system produces superior estimates in the system as a whole. The superior results of the VAR agree with the notion that in complicated dynamic systems by placing restrictions on the interactions of the variables poorer forecasts may result. / by Kimberly Gole. / S.M. in Real Estate Development