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. 71-73). / At the entity level, the design of sound corporate governance mechanisms is critical for REITs that are preparing to go public. At the industry level, issues of transparency and corporate governance are consequential to the further development of REITs in Asia. This study looks at various REIT regimes and corporate governance systems around the world. It then proceeds to examine the governance structures in place at the time of an IPO in the emerging REIT market of Singapore. The mechanisms of corporate governance used to evaluate the IPO of the REIT include (i) board structure and composition, (ii) ownership, (iii) compensation, and (iv) takeover defenses. The findings point to evidence that corporate governance structures are not "one size fits all" and must be tailored to fit the appropriate institutional context. / by Denise Tan. / S.M.

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. 118-120). / Numerous studies have shown that retrofitting an office building with energy efficiency improvements can significantly reduce operating costs, yet many existing office buildings have not been retrofitted. The objective of this paper was to explore the incentives and motivations of various parties throughout the real estate management chain to better understand why investments in energy efficiency are not more prevalent. The paper focuses on investor-owned multi-tenant office properties. The authors explored the question from a qualitative and quantitative methodology. The qualitative study consisted of interviews with key players in the real estate management chain including property managers, asset managers, portfolio managers, and institutional owners. The quantitative study consisted of a financial model to compare competing alternative capital investments. The competing investments consisted of a cosmetic improvement which was modeled to either increase rents or decrease leasing costs and an energy efficiency improvement which was modeled to decrease utility costs. Multiple permutations were tested in each scenario in order to gauge the sensitivity of returns in each scenario. Both methods were designed to understand how industry participants allocated capital to energy efficiency improvements. The study determined that financial considerations are the primary drivers behind real estate investment decisions. Secondary factors that drive investments in energy efficiency improvements include fostering a positive public image, winning new business, and focusing on environmental responsibility. / (cont.) Recommendations to increase investment in energy efficiency conclude the paper. Increased investment in energy efficiency will result if managers recognize that energy efficiency projects can decrease the volatility of returns, and that these returns are maximized by making the investment in energy efficiency prior to significant lease rollover. / by Kristian A. Peterson [and] Ross M. Gammill. / S.M.

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. 62-63). / This paper is intended to recognize the performance of REITs in Japan (J-REITs) by conducting two kinds of studies in a REIT-level and an underlying property-level: first, to do "factor loadings" that identify systematic risks of long run investment performance in J-REITs; second, to demonstrate "Pure Play Indices," segment-specific indices of REIT-based property market returns by tracking monthly REIT return data and property holding data. The first study employs the Fama-French three-factor model for monthly J-REIT returns from September 2001 to September 2008. This investigation upgrades past similar research with longer data periods in a two-stage regression (a time-series regression and a cross-sectional regression) for all the listed J-REITs. Nevertheless, the model results in a limited explanatory power for the J-REIT performance, probably due to too short a market history, as in the past research. The second study applies the Pure Play Indices, originally proposed by Geltner and Kluger [1995, 1998], to the J-REITs for office, residential, and retail segments since January 2006 when the J-REIT market became sizable enough for study. The developed Pure Play Indices perform similarly with the J-REIT return indices, except the Pure Play Residential Index during the down market due to the effect of non-target segments within the J-REITs. The reason for this effect will require a further study. As the market matures with more data accumulated, this two-fold study that shows demonstration of returns from J-REITs will become more valuable to derive risk of J-REITs and different types of information of properties. / by Rena Konagai. / 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, 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 65-66). / This thesis examines and analyzes the alignment of incentives, project control, and economics in development agreements between private developers and mission-driven institutions. Mission-driven institutions, such as churches, hospitals and universities, need to compete in their relative industries, and must leverage real estate assets as effectively as possible. In many cases, the best opportunities for underutilized institutional real estate is in the private market. In order to develop institutional real estate for the private market, institutions can partner with private development firms to utilize their knowledge and experience to maximize efficiency through complex development processes and create the best possible product for a given marketplace. This paper reviews existing literature on the topic of institutional-private development partnerships, then explains and analyzes two case studies: The Charles Street Jail, and a Market Rate Student Housing Project. The case studies act as real examples, and are used to examine the issues that can arise due to differences in incentives between private developers and mission-driven institutions, as well as possible ways that organizations can approach such concerns to mitigate associated risks. / by F. Samuel Reiche. / 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, 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 81-82). / This paper examines and projects fundamental characteristics of the London Office rental market which is facing supply and demand issues in upcoming years despite being considered one of the few safe haven places for real estate investors during the recent worldwide financial uncertainty. The paper divides the Central London market into four submarkets: Docklands, Midtown, City, and West End. The key issue the paper will examine, aside from projecting future market fundamentals for a 10 year period, is whether on an econometric analysis level it is better statistically to analyze the market utilizing one singular model or to model each submarket separately then sum the outputs. First, the paper will discuss the history and development of the economic model, then discuss what papers have analyzed the London office market utilizing econometric models, and finally what previous studies have examined submarkets utilizing econometric models. Next, the paper will analyze what's occurred from 1986-2012 and try to offer some explanation of why the markets have behaved the way they have on a submarket and aggregate level. Next, the paper will present the model utilized to project the conditions for 10 years and examine back tests for the previous five years (2008-2012) to examine how well the model would have predicted the actual events of the time period. This study derives three main econometric equations for each submarket and Central London as a whole. The rental equation is explained by a lag of one year of rent and the current quarter's vacancy. The demand equation is explained by a 1 year lag in occupied stock, the current level of government service employment, the current level of fire, insurance, and real estate employment, and a four year lagged vacancy. The supply equation is explained by a 1 quarter lag in yield, a 1 year lag in yield, the current bond rate, the current real rental rate, a 1 quarter lag in real rental rate, and the spread between 10 year government bonds and corporate bond rates. The model is utilized both on each submarket and on the Central London market as a whole. Finally, the paper examines the differences in aggregating the submarkets versus modeling Central London in one model. This is done by comparing the models outputs for the previous 5 year back test and also for the 10 year projections. / by Matthew E. Waisnor. / 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 64). / After explosive development in the past half decade, the co-working industry is seeking changes to enhance the sustainability of its business model. Despite early success, the buy-bulk-sell-piece model does not promise a high return today due to the increasing cost of rent. Floating revenue and high fixed cost make the model fundamentally risky, imposing challenges for co-working companies to withstand the next recession. In the face of intensifying competition, major co-working players are expanding their businesses aggressively, aiming to benefit from economies of scale. The demand for funds is greater and more urgent than ever. Aside from commercial loans and venture capital, co-working companies are seeking more flexible and sustainable financing sources for growth. On the supply side, traditional real estate companies now have fewer doubts and greater interest in participating in the co-working business. While a small group have chosen to start their own spaces, more are looking for strategic cooperation with co-working players that have proven track records. This thesis conducted a study of the co-working operating model in an attempt to elucidate the optimal solution that benefits both sides of the business. Following a brief industry overview, it discusses the revenue and cost structure of the co-working space and the pros and cons of five co-working operating models. With that understanding, it constructs a DCF model of a mock-up co-working project and develops cash flows for both participants to analyze their return and risk profile under each operating model. The results suggest that the joint venture model is the optimal solution for co-working companies in business expansion, and property owners with passive investment positions. Further, the management model is the best choice for more matured co-working companies with strong brand influence and concentration on management service. It also indicates that the transformation from the lease model to the management and franchise model requires co-working companies to have a strong brand, proven track record, and an established member network. While for property owners, such transformation depends on its willingness of exposure to the co-working business, as well as the capital cost, risk tolerance, and investment horizontal. / by Wensi Zhai. / 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. 60-63). / Changes in the issuance of Commercial Mortgage Backed Securities are examined and contrasted with market events and policy action during the financial crisis of 2007-2009. Additionally, a sample of investment-grade Commercial Mortgage Backed Securities are separated by original rating and observed in a time series chart against the market events and policy actions from June 2007 through May 2010. / by Michael J. Ellch. / 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 53). / In the history of the Chilean real estate market, little has been done to study the price dynamic of real estate. Currently, the Chilean industry has two types of residential indices that do not effectively present the available information. One of the existing indices uses the correct methodology (Hedonic Method), but it does not represent the whole metropolitan residential market. The second index has enough data, but the methodology (stratification or mixed adjustment method) is not the most appropriate because of its simplicity, given the great quantity of information available on the market. We briefly review different index methodologies, and base an extensive database on reliable information from the greater Santiago market. We created two types of Hedonic price indices (Pooled and Chained) for residential and commercial real estate, respectively. These hedonic methodologies are based on an econometric model to account for the problem of the heterogeneity of real estate; each property is unique within its characteristics, and should not be read independently. Thus, the objective of an index is to estimate the marginal contribution of those characteristics and generate a quality-adjusted price index. Between the two different results, we analyze the advantages and disadvantages of each methodology, and why should choose one over the other in each situation. For the most of the results we obtained, they are consistent with the existing indices having nominal return of 98% and 117% for the residential market and 58% for the commercial. Our indices show some subtle differences, and they are based on a more rigorous and sophisticated methodology that is consistent with the recommendations of the Eurostat International CPPI Handbook. Finally, this document should be the first step to internationalize and professionalize the processes of measurement and should be helpful to make better public and private decisions within the Chilean real estate market. / by Juan José Bulnes Valdes. / 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. / Title as it appears in the Degrees awarded booklet, Feb. 17, 2016: A N lease for housing rental: transferring the property taxes to renters. Cataloged from PDF version of thesis. / Includes bibliographical references (pages 140-141). / Ownership rates have been decreasing since 2004, and the rental market is becoming less affordable each day. A rent-to-own agreement would reduce barriers to purchase a property for future buyers. However, to promote this type of contract it is necessary to demonstrate that investors will be exposed to lower risk, or higher returns, than in a traditional lease. Since taxes are an important part of a real estate investment, this thesis analyzed if this risk can be mitigated by passing the taxes to the tenants. While rents and prices respond to market conditions, property taxes do not show a clear trend of how they change, leaving investors exposed to a high risk. In addition, property taxes significantly differ among states since they vary with the financial needs of each local government. Moreover, the effective tax rate can also differ from town to town, and even within the city because of the different tax districts in which the property is located and the No Ad Valorem taxes. The evolution of taxes, prices and rent in Massachusetts, and within the cities of Arlington, Newton and Wellesley is explored in this thesis to understand how property taxes evolve over the years and see if changes in rent and/or prices upset variations in taxes. In addition, this thesis also considers the evolution of these variables in Larimer County, Colorado, and in Oak Park, Illinois. Moreover, this thesis analyzed the potential return of a residential property in each of the cities studied to establish if there is any financial advantage for signing in a RTO agreement instead of a traditional lease, and if capping the taxes would reduce the financial risk. The data shows that in cities that saw a high appreciation or rental growth singing a rent-to-own contract was not the best alternative for investors since their return would have been lower. In addition, passing the taxes is not attractive enough to investors since the additional points that this procedure offers are not significant, and in some case, when taxes decrease, they actually decrease the investor's return. / by Lina M. Jimenez Mejia. / 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. / 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. 111-112). / Real estate development (RED) has traditionally been a very dynamic business, where real estate developers strive to turn an idea into a real asset, by delivering a quality project on time and on budget. In recent years, Modular Construction Methods (MCM) has arisen as an innovative solution to commercial RED projects that require higher levels of the three aforementioned factors, with a special emphasis placed on time. The purpose of our thesis is to explain MCM and its impact on RED by analyzing the interdependent relationships between the different tasks performed during the course of a development. We have accomplished this by using the Design Structure Matrix (DSM), a systems engineering tool, to map out the dependencies between development tasks in a graphical manner. To develop our DSM model for an RED process that uses MCM we conducted interviews with the senior management at RJ Finlay, a New Hampshire based full service real estate firm and Keiser Industries, a modular manufacturing company that operates in Maine and is owned by RJ Finlay. To fully understand the real application of the MCM process to RED, we met with the general contractor, lead architect and project management team for 30 Haven, a commercial RED that uses MCM. 30 Haven is located in Reading, Massachusetts and has been co-developed through an integrated project delivery (IPD) process by RJ Finlay and Oaktree development, using an in-house general contractor and Keiser Industries as its modular manufacturer. Our interviews occurred weeks before the project was completed in the summer of 2012. This allowed us to interview the involved parties about the whole process from inception to construction completion. This helped us further understand the actual problems a RED process using MCM can face throughout the preconstruction and construction processes. We then developed a DSM that showcases the different stages that a RED process using MCM have to go through and the planned and unplanned iterative processes for each stage. Planned iterations are feedback loops between tasks that are meant to rework tasks that forcibly need it, while unplanned iterations reflect feedback loops that occur because of unexpected events. Our thesis has focused on proposing proactive solutions to the unexpected events (referred to as "failure modes") a RED process using MCM can face, by either eliminating them or minimizing their likelihood and impact. The DSM helped facilitate the development of both a normative model and an optimal one, where our solutions for the unplanned iterations were applied. We complemented our findings with a hypothetical financial model that uses the normative and optimal DSM models to show the difference between both in terms of the returns, time and cost for a generic multifamily RED that uses MCM. / by Steven V. Bonelli and Adrián M. González Guerra. / S.M.in Real Estate Development