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 PDF version of thesis. / Includes bibliographical references (pages 50-51). / This thesis affirms that self-storage is further maturing into a core type asset class in juxtaposition to the characteristics of the traditional core asset types: multifamily, office, retail and industrial. This shift is shown by an increased participation of traditional core investors in the space, the resiliency of the product and the future of the industry. Core investors seek a risk and return profile that favors the conservative end of the security market line. They seek more stabilized and forecastable assets than value add or opportunistic funds (Geltner, Miller, Clayton, & Eichholtz, 2014). Even though the percentage of self-storage in institutional portfolios is still small due to fragmentation of the industry and self-storage's total market share, the investment opportunity is growing due to its proven resiliency through market and natural disruptions. This resiliency is evident in the micro-level occupancy and cash flow performance of self-storage properties as well as the macro-level total returns of the class over time. The resilient nature of the class and the resulting higher long-term returns have attracted core asset investors to diversify their portfolios to include self-storage assets at an increasing rate. The future of self-storage is strong due to positive sentiment and culture associated with self-storage. Sophisticated parties on both the user and investors sides are increasing their participation in the industry. The resulting outlook is positive for growth and maturation of the self-storage asset class. / by Charles Hope. / 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

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 PDF version of thesis. / Includes bibliographical references (pages 55-57). / This thesis examines an emerging product type, single-family build-to-rent, and tests its potential application in tertiary markets of the United States. The build-to-rent ("BTR") model has proven successful in a number of fast-growing secondary markets, such as Phoenix. However, the attributes of these markets differ widely from tertiary markets. This paper examines the key drivers in Phoenix, such as demographics, land costs, construction costs, cap rates and rents that have made this product successful and compares these metrics against those of tertiary markets in an effort to evaluate whether single-family BTR is a viable product type in those markets. Case studies are used to compare secondary markets to tertiary markets. Oklahoma City, Tucson and Fresno are selected as the tertiary markets based on their varying affordability scores as measured by the Housing Opportunity Index. This index was chosen to test whether homeownership affordability predicts BTR success. While there are different varieties of BTR products, these case studies examine a hypothetical 20-acre project of 160 single-family detached homes of approximately 1,800 square feet each. Untrended Returns on Cost ("ROC") were found to be similar to Phoenix in Oklahoma City and Tucson. However, due to the slower rent growth and higher cap rates of these tertiary markets, Internal Rates of Return and Equity Multiples were found to be too low to justify this specific BTR design. However, further institutionalization of this asset class and a reevaluation of the pricing of SFR volatility has the potential to lower cap rates to a level that justifies the BTR product in tertiary markets. / by Bretton C. Finley. / 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

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 PDF version of thesis. / Includes bibliographical references (pages 54-60). / Digital-native retail brands have business models that sit at the intersection of two major narratives in retail: technology and brick-and-mortar stores. Founded online, they rely on technology to attract a Millennial customer base that gets most of their brand information over the internet. Digital-native retailers are also opening, not closing, brick-and-mortar stores at an accelerating pace. Recent studies have suggested that digital-native retail brands will grow from roughly 600 to over 1,400 brick-and-mortar locations in the coming years. However, these projections only consider existing brands, and industry trends suggest that the actual number of physical stores opened by digital-native retail brands will be significantly greater. Real estate owners that develop leasing strategies focused on the specialized needs of digital-native retail brands are positioned to benefit. / The brick-and-mortar store locations of digital-native retail brands provide key insights into their site selection criteria and brand strategies. Store locations are based on customer data from their online stores. As a result, the sites brands select indicate locations with strong target consumer demand. To analyze trends, we identified 58 major digital-native retail brands that have opened a permanent physical store location in the United States. Then, we collected the addresses of the 608 individual stores that they operate. Among other insights, the store location results indicate that digital-native brands concentrate in New York, Los Angeles, and San Francisco before moving into other major metro areas. Within each metro area, digital-native brands agglomerate into both shopping centers and retail streets located within high-income neighborhoods. / Retail property owners have an opportunity to leverage their expertise in physical retail to assist digital-native retail brands in successfully establishing themselves offline. A brand's first few brick-and-mortar locations are a high-stakes bet that falls outside of the company's core competency. Beyond leasing the physical space, landlords can offer support in identifying store locations, completing tenant improvements, and assisting in the store permitting process. Real estate owners and investors that provide low-capital, turnkey spaces and a streamlined leasing process will be attractive to a growing number of digital-native retail brands. / by Jeffrey Dougherty. / 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

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 PDF version of thesis. / Includes bibliographical references (pages 28-29). / Real estate developers and investors have a vested interest in discovering new techniques for estimating the direction and magnitude of changes in residential rent within a neighborhood. This study hypothesizes, and finds evidence, that taxi activity is a proxy for changing income and neighborhood quality as well as an indicator of gentrification. Novel research is performed to determine if taxi activity is a significant predictor of rents in New York City at the neighborhood level. Nine OLS regression models are created using data about 1,466,234,991 taxi pickups and drop-offs, median rent, and median income across 188 neighborhoods in New York City in the years of 2010-2015. In all nine models, taxi activity is found to be a statistically significant predictor of rent at 99% confidence. This study finds that a I standard deviation positive shock in taxi drop-offs will result in a 0.009% 0.155% higher rent the next year on average. / by Philip Caporaso. / 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

Thesis: S.M. in Real Estate Development, Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate, September, 2020 / Cataloged from student-submitted PDF of thesis. / Includes bibliographical references (page 78). / This thesis introduces an Integrated Analytical Framework that provides guidelines on mapping the analysis structure and reporting essentials for the commercial real estate ("CRE") investment with coverage from Acquisition Management, Development Management, Asset Management to Divestment. The motivation of this thesis responds to the need that small-scale Private Equity Real Estate ("PERE") firms have for efficient, comprehensive, and streamlined tools to manage investment assets. There are two purposes of this thesis. First, it is to introduce an analytical framework, integrating the entire lifecycle of a commercial real estate investment. From a quantitative analytical perspective, the framework introduces Key Performance Indicators that CRE investors should rely on to understand the expected performance of their investments. Second, it is to help CRE investors achieve analytical efficiency. A model template, in Microsoft Excel, is developed here to translate the framework into a practical tool. This thesis serves as a practical manual for small-scale PERE firms and real estate entrepreneurs who have limited resources and possess strong desires for a streamlined but comprehensive analytical tool to fulfill their investment management demands. This thesis focuses on both asset-level and portfolio-level investment analyses. While the asset-level perspective intends to be micro-level analysis and emphasizes the detail of every aspect of the asset, the portfolio-level analysis consolidates the asset fundamentals and provides a bird's-eye view of the entire investment lifecycle. This thesis contains a supplemental Excel file The Integrated Analytical Framework Model Template that can be obtained from DSpace@MIT with the persistent identifier: https://hdl.handle.net/1721.1/126014. / by Junyi Zhang. / 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

Thesis: S.M. in Real Estate Development, Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate, September, 2020 / Cataloged from student-submitted PDF of thesis. / Includes bibliographical references (pages 107-117). / This thesis investigates the scientific underpinnings of climate change, its physical manifestations, the complications society faces in adapting to this phenomenon and its likely impact on real estate investment values. It concludes by proposing an initial investment framework for real estate investors concerned with climate change. This framework highlights non-traditional due diligence considerations and asserts that probabilistic valuation methods allow for more accurate asset underwriting. The first chapter is structured as a general primer on climate change and includes references for those who would like additional reading on its science. The second chapter describes the geophysical effects of climate change. The intent here is to provide enough background for readers to understand its causes and potential severity. The third chapter covers how geopolitical actors are responding to a warming world and introduces important macroeconomic trends. / The fourth chapter outlines the substantial engineering and insurance challenges ahead and presents cases of societies that have won and lost while dealing with either a changing climate or extreme weather events. The fifth chapter highlights key economic, legal, and demographic research on climate change's impacts to date and those that are likely to occur going forward. The purpose of these chapters is to provide historical context for how dramatic atmospheric changes can lead to dramatic economic losses, and to provide some lessons that real estate investors should incorporate when underwriting new opportunities. The conclusion summarizes the first five chapters and offers an initial framework for how real estate investors can incorporate climate change into their underwriting, including a brief review of how property values are currently underwritten using relatively short-term, deterministic discounted cash flows. / In closing, I describe how a longer timescale underwriting with additional simulations is beneficial to account for the uncertainties associated with climate change and suggest further research to explore possible market mispricing of assets based on widely divergent upside and downside skews given likely future climates. / by Daniel Hare. / 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

Thesis: S.M. in Real Estate Development, Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate, September, 2020 / Cataloged from student-submitted PDF of thesis. / Includes bibliographical references (pages 43-45). / Big data and the increasing usage of data science is changing the way the real estate industry is functioning. From pricing estimates and valuation to marketing and leasing, the power of predictive analytics is improving the business processes and presenting new ways of operating. The field of affordable housing development, however, has often lacked investment and seen delays in adopting new technology and data science. With the growing need for housing, every city needs combined efforts from both public and private sectors, as well as a stronger knowledge base of the demands and experiences of people needing these spaces. Data science can provide insights into the needs for affordable housing and enhance efficiencies in development to help get those homes built, leased, or even sold in a new way. This research provides a tool-kit for modern-day real estate professionals in identifying appropriate data to make better-informed decisions in the real estate development process. From public city data to privately gathered data, there is a vast amount of information and numerous sources available in the industry. This research aims to compile a database of data sources, analyze the development process to understand the key metrics for stakeholders to enable decisions and map those sources to each phase or questions that need to be answered to make an optimal development decision. This research reviews the developer's perspective of data science and provides a direction that can be used to orient themselves during the initial phase to incorporate a data-driven strategy into their affordable multi-family housing. / by Sun Jung Park. / 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

Thesis: S.M. in Real Estate Development, Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate, September, 2020 / Cataloged from student-submitted PDF of thesis. / Includes bibliographical references (pages 40-41). / The retail industry has transformed markedly in the last decade driven by the confluence of technology, evolving consumer behavior, and innovation. As the sector continues to evolve, retail real estate is coming under significant pressure to keep up with the pace of change. Some centers are poised to quickly adapt and come out stronger, others are left behind and going dark. This paper is particularly interested in examining the geography of distressed retail centers, specifically malls and community centers, understanding what factors lead to their closure, and coming up with a predictive model to measure the properties' probability of defaulting. We analyze the geography of approximately 4,900 malls and community centers across the United States at two intervals, 2010 and 2020. First, we isolate the centers that have died within the last decade to identify what distinguishes between a dead and survived center. Second, for each dead center we estimate the distance of its competitors to assess impact of spatial competition. Third, we use a linear regression to identify determinants that influence the death of a center. Fourth, we run a profit model on the center's survived-dead response based on each variable. We conclude by developing a predictive model to assess which centers are at greatest risk of underperforming. Research shows that a property's net rentable area has an outsized impact on the probability of defaulting, with opposite effects for malls and community centers. As malls grow larger, they are less likely to become distressed -- whereas the growth of community centers leads to a higher probability of failure. The center's proximity to competition, and the amount of available space both increase the impact on the likelihood of going under. The opportunity to renovate, on the other hand, mitigates the impact.. / by Morgan Fleischman. / 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

Thesis: S.M. in Real Estate Development, Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate, September, 2020 / Cataloged from student-submitted PDF of thesis. / Includes bibliographical references (pages 30-31). / There is currently more retail space per capita in the United States than in any other country, especially suburban mall space. Most American malls built throughout the twentieth century were designed to satisfy the American consumer's reliance upon the automobile and were subsequently strategically placed adjacent to major transportation arteries just on the outskirts of then existing communities. At the time of their construction, this was considered an economical strategy, as large swaths of land on the edge of town could be purchased at a significant discount when compared to land with closer proximity to increased population density; however, changes in consumer preference, along with population growth and now COVID-19, have all contributed to the continued downfall of the suburban mall. How will these massive centers, now situated in prime locations, be able to reinvent themselves and add value to the community if the community sees no value in their present use? This thesis seeks to examine this question through a case study analysis of the adaptive reuse of Highland Mall in Austin, TX. Through an intricate public-private partnership agreement, 1.2 million square feet of dying retail was able to be master planned into a thriving mixed-use development. Research material is derived from existing writings and personal interviews with relevant stakeholders. The conclusion this work leads to is that public-private partnerships provide a solution to the capital intensive process of reinventing retail properties. / by Ian Duncan Bradley. / 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

Thesis: S.M. in Real Estate Development, Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate, September, 2020 / Cataloged from student-submitted PDF of thesis. / Includes bibliographical references (pages 57-61). / The government of the District of Columbia in 2019, unveiled a 2020 - 2050 Housing Production Goal popularly tagged "#36000by2025". The Initiative details Washington DC's goal to develop 36,000 new housing units in partnership with developers in the city, including 12,000 affordable housing units between the years 2020 and 2025. The Initiative seeks to reduce homelessness, alleviate the constrained local housing market, and preempt an anticipated housing shortage in relation to the forecasted economic and population growth in Washington DC. This thesis focuses on identifying and analyzing the types of incentives or barriers for developers to add additional affordable housing. This thesis first explores the details of this Initiative, reviewing its history and the factors that led to its creation. The thesis will also review its specific goals and proposed methods towards achieving them. / Through a literature and policy review, the thesis defines the framework within which the city and developers define affordability for housing development projects. The thesis then looks to real estate developers operating in the city who have or intend to proceed with market-rate, mixed-income, and affordable housing projects. Through interviews, an analysis of housing development trends, and a review of upcoming housing projects, the thesis seeks to understand what challenges developers face with the housing affordability requirements and how Washington DC's Initiative and Comprehensive Plan affects their developmental goals. The thesis will also review what barriers real estate developers face and explore how they can be overcome. This thesis will also pivot to Washington DC Government's planning process to review what incentives are being proposed which encourage both new affordable housing development and the preservation of endangered affordable units. / Via interviews and literature review, the thesis explores possible areas of improvement on the initiative that meet the city's goals and support real estate developers' ambitions. Keywords: Real Estate Development, Multifamily Housing, Affordable Housing, Washington DC, #36000By2025, Community Benefits. / by 'Kayode Agbalajobi. / 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