published_or_final_version / Real Estate and Construction / Master / Master of Science in Real Estate and Construction Development

This paper studies the differences in the real estate markets of Los Angeles County and New York County in order to understand what variables contribute most to their growth by using national and local data from the period between 1987 and 2012. I conduct two separate multiple regressions to show that local variables tend to have a bigger impact on real estate growth than national variables. I also find that there is a significant difference between most of the variables depending on location. Overall, it is found that over fifty percent of the observed variables contribute to real estate growth in LA County. However, two thirds of the observed variables lead to real estate market decline in NY County. These findings show that NY County does not see as much growth as LA County.

It is estimated in the last five years Chinese investors have poured over $93 billion into the United States residential real estate market targeting high-end housing sectors. I analyze the implications of the investment and how it has affected the Bay Area housing prices. In order to find out why large outflows are targeting the United States I compare China’s economy with Japan’s economy in the late 1980’s when Japanese investors invested over $300 billion into high profile real estate properties. I find many similarities, suggesting China has a bubble economy such as Japan before the lost decade. To combat their bubble, China has implemented new restrictions on capital outflows in order to stabilize their volatile markets. In terms of the Bay Area real estate market I gathered evidence a recession is imminent due to the demand falling for high-end housing. The housing market mirrors economic health and indicates whether an economy is in a boom or bust.

The African Real Estate Society (AfRES) 2008 conference, through a panel discussion concluded that access to finance is a major challenge and an obstacle in developing real estate markets in Sub Saharan Africa. The purpose of this research was to establish the key factors that a lender takes into consideration when financing real estate transactions in Sub Saharan Africa, as well as the relative importance of each key factor. In addition to this, the study reviews and examines the risk considerations and challenges involved in doing business in Sub Saharan Africa, from a South African lender point of view. As the research is exploratory in nature, the initial approach to gather significant information was through literature studies and preliminary discussions with relevant representatives of the lender. Thereafter, a self administrated questionnaire was sent to respondents in order to bring out further factors or dynamics to consider. The main finding of the research was that the primary factors that influence a lender’s decision to finance a real estate transaction are: projected cash flow of a specific transaction, pricing, lender’s Return on Equity (ROE), client risk grading, property location, type of property, nature of business of borrower, security provided and client relationship. Respondents included track record of borrower and term of the loan facility as additional factors of influence. Regarding risk concerns, important issues of consideration included cultural differences, unfamiliarity of business environment and legal frameworks, access to data and delivery risk. The economic environment is highly segmented, and is thus challenging to treat SSA markets as one bread basket. The study reveals that although SSA is riskier than RSA in terms of doing business, each risk highlighted has a mitigating factor, which could be adopted to secure debt funding for transactions. The adaptation of these risk mitigates may facilitate access to funding for real estate clients in Sub Saharan Africa. Key words: Real estate, Africa, lending, risks and challenges

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. / Mr. Grayson received his S.M. in Real Estate Development, Sept. 2012.We will continue to monitor Mr. Kelly’s status and remove the note if/when he receives his degree. Page 126 blank. 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. 108-111). / This thesis investigates one of the United States' most sweeping regulatory responses since the New Deal legislation passed in the 1930's, the Dodd Frank Act. While the Dodd Frank Act will affect numerous financial markets, this thesis will focus on the implications of this regulation on the real estate securitization market. To better understand the regulatory response towards real estate securitization, we will clarify some of the key definitions, explain the history of securitization and describe the fundamental issues that led to the real estate securitization boom and subsequent bust as well as its implications on the financial crisis in the late 2000s. We will then summarize in detail the key provisions in the Dodd Frank Act associated with real estate securitization and describe the framework for which these provisions were formed. In conclusion, we will examine the implications of these provisions and explain our position of how the Dodd Frank Act will not achieve its desired effect on the real estate securitization market as drafted. / by Kelly G. Frazier and Paul C. Grayson. / 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. / Cataloged from student submitted PDF version of thesis. / Includes bibliographical references (p. 66-68). / The objective of this paper is to answer the question, "Has the military housing privatization process produced design innovation?" Secondary questions are, "What specific role has the Army's Residential Communities Initiative played in fostering innovation? What are the key process drivers? What (if any) specific building product innovations have arisen from an architectural, sustainability, construction technology and community planning perspective over the last 10-15 years?" Particular emphasis is paid to design measures employed by the development partners to ensure client satisfaction, maintain the competitiveness of their product on the open market and preserve long term partnerships with the U.S. Government. Consideration is given to the ways in which the Army has streamlined the privatization solicitation process to foster private sector innovation and what impacts these efforts have had on both design drivers and customer satisfaction levels. Specific examples of planning, design and construction innovation are explored through case studies. The author concludes that privatization has produced significant innovation and high customer satisfaction in the military housing market. However, there is still room for further program innovation in light of parallel trends in university student housing privatization, public housing privatization and the private market. Research methodology included relevant literature review and direct, focused interviews with key industry players from the U.S. Government, design and development arenas. These approaches were augmented with select, relevant case study analyses and supporting site visits.. / by Jason Ellis. / 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, 2010. / This electronic version was submitted by the student author. The certified thesis is available in the Institute Archives and Special Collections. / Cataloged from PDF version of thesis. / Includes bibliographical references (p. 98-102). / In recent times Sovereign Wealth Funds (SWFs) have become an important source of international real estate investments. A number of reports predict the swelling of SWF combined assets from its current figure of $3-4 trillion to $8-12 trillion by 2015. It is also expected that a continuous growth in fiscal surpluses and accumulation of wealth by SWF nations may soon make the combined size of SWFs bigger than other capital market segments such as mutual funds and pension funds. This phenomenal projected growth in SWF assets has created an indispensable need to create and manage a diversified and robust international mixed-asset portfolio. This thesis investigates the relevance of real estate in the SWF portfolio from an execution strategy and portfolio hedging perspective. The real estate strategy section introduces SWFs and their real estate investment behavior and trends. The authors collected execution strategy data by conducting open-ended interviews with real estate leaders of four major SWFs that invest in real estate and nine senior executives representing global real estate investment management and consulting firms. The interview responses are used to understand several topics ranging from the investment objectives and risk spectrum to future trends in SWF real estate investments. The thesis findings reveal the synergies and differences in the views of the two communities and also describe the execution preferences of SWF investors from the purview of their international real estate portfolio. The portfolio-hedging section uses a macro-economic time series model based on long-term asset returns to determine the best hedges for four SWFs (Oil-based, China, Singapore and Korea) in three foreign destinations namely the UK, the US and Japan considering real estate and stocks as the two asset classes. The vector auto-regression (VAR) model presents an extended time series analysis that tests correlations, Granger causality and impulse responses between different home asset and foreign destination pairs. The thesis further illustrates through a simple stylized sub-portfolio analysis the optimal asset allocation between stocks, long-term bonds and real estate for the above combinations. The results show evidence that foreign real estate is an effective hedge against the changes in the home source of wealth for most SWFs. The time series hedging model is fed by long-term asset return data and can be replicated for other SWFs to determine their unique investment strategy. Further, the findings challenge the low allocations given by SWFs to real estate in their global portfolio. / by Pulkit Sharma and Yoohoon Jeon. / S.M.in Real Estate Development

by Lai Yan Ching. / Thesis (M.B.A.)--Chinese University of Hong Kong, 1999. / Includes bibliographical references (leaves 42-43). / ABSTRACT --- p.ii / TABLE OF CONTENTS --- p.iii / LIST OF ILLUSTRATIONS --- p.v / LIST OF TABLES --- p.vi / ACKNOWLEDGMENTS --- p.vii / Chapter / Chapter I. --- INTRODUCTION --- p.1 / The Focus of the Paper --- p.2 / Chapter II --- LITERATURE REVIEW --- p.3 / Chapter III --- PAST CYCLES AND DATA COLLECTION --- p.6 / Past Cycles --- p.6 / Private Domestic (small/medium units) --- p.8 / Private Domestic (larger units) --- p.8 / Data Collection --- p.10 / Chapter IV --- MODELLING THE REAL ESTATE MARKET --- p.12 / Chapter V --- ESTIMATION RESULTS AND IMPLICATIONS --- p.16 / Private Domestic (overall) --- p.16 / Private Office --- p.18 / Private Commercial --- p.20 / Private Flatted Factory --- p.21 / Summary of Real Estate Market in Hong Kong --- p.22 / Private Domestic --- p.22 / Private Office --- p.22 / Private Commercial --- p.23 / Private Flatted Factory --- p.23 / Some Notable Points --- p.23 / The Relationship between Vacancy and Completion --- p.26 / The Relationship between Vacancy and Absorption --- p.29 / Chapter VI --- FORECASTING - WHAT WILL BE THE FUTURE TRENDS IN REAL ESTATE MARKETS BASED ON HISTORICAL PATTERNS --- p.32 / Chapter VII --- CONCLUSION --- p.38 / APPENDIX --- p.41 / BIBLIOGRAPHY --- p.42

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. 55). / Compared to traditional investment options, such as stocks and bonds, direct real estate investments are illiquid. This problem is magnified in joint venture partnerships. Non-managing member partnership interest holders typically do not have a way to dispose of their interest (thereby unlocking any residual value) prior to a capital event at the property level. Even with a forced sale mechanism included in the joint venture agreement (buy/sell agreement, ROFO, etc.), the non-managing member partnership interest holder is disincentived to exercise the option without the expertise to manage the investment. Depending on the long term strategy (buy/hold/sell) of the managing member, the non-managing member partnership interest could remain virtually illiquid over the entire holding period. The thesis will answer whether or not the non-managing member partnership interests can be transferred more efficiently (and, therefore, more fully valued prior to capital event) via specialized investment platform and, if so, what changes will need to be adopted in the market and within partnership agreements to facilitate such transfers. Specifically, this thesis will examine the feasibility of creating and implementing a new, market-creating enterprise that purchases and trades non-managing member partnership interests. This topic is especially relevant today given the recent turmoil in the private real estate investment market and the prevalence of cash-strapped non-managing member partnership interest investors (institutions as well as individuals) seeking to unlock their wealth, as well as managing members desiring to preserve their ownership in real estate they believe will rebound with the market. / by Matthew DePucchio. / 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. / Cataloged from PDF version of thesis. / Includes bibliographical references (p. 99-104). / Society is at a crossroads; humanity is facing a new kind of threat to our personal happiness as our cities face the real risk of losing quality public space, the heart and soul of our urban civilization. The construction of an inspiring public realm develops a sense of place that people value and are attracted to living in. Pedestrian infrastructure and public spaces have essential roles in maintaining a healthy and vibrant community. These public infrastructure attributes of mixed-use developments however tend to be the most difficult to finance. In order to build a successful project a mixed-use developer requires the skills and knowledge to understand what constitutes a quality public realm and how to incentivize the financing. An important dichotomy exists; a great public realm is only developed though a strong public private partnership, with the addition of creative financing strategies, an interdisciplinary approach, and commitment to improving public spaces in the built environment. This thesis will examine what the most important attributes of a successful public realm are, why these attributes are important, and what strategies are available to finance the public realm in the future. There are a variety of financing mechanisms available for developers to leverage, yet many mechanisms are incredibly specific, require a strong expertise, and are difficult to bundle together in order to fill the financing gap that mixed-use projects require. This thesis will categorize financing mechanisms available for mixed-use development into six main categories and will discuss the advantages and disadvantages of each. Financing mechanisms have a direct affect on the quality of the public realm and cities need to ensure their policies are incentivizing the outcomes citizens demand: a quality public realm. More specially, this thesis will analyze a successful mixed-use development case study in Denver, CO: The South Lincoln Redevelopment. This project is a mid-century public housing site that is being transformed into a mixed-income, mixed-use, transit-oriented urban development. Denver Housing Authority, the developer, has used various financing strategies to specifically enhance the public realm of this development. Some of the financing alternatives are not available to a private developer so this thesis will propose how one could replace financing mechanisms, such as a HOPE VI grant, with other sources while maintaining a quality public realm. This thesis will focus on a few key questions. First, why does the public realm matter? Second, what determines a quality public realm for mixed-use urban developments? And lastly, how can developers begin to look at how to finance these much needed improvements? / by Elizabeth DiLorenzo. / S.M.in Real Estate Development