This electronic version was submitted by the student author. The certified thesis is available in the Institute Archives and Special Collections. / Thesis: S.M. in Real Estate Development, Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate, 2020 / Cataloged from student-submitted PDF of thesis. / Includes bibliographical references (pages 39-40). / This paper examines the housing market in Beirut between the beginning of 2005 to the end of 2018, focusing in particular on the slowdown in the early to late 2010s. It will be shown that this slowdown is partly attributable to a mismatch in the supply that private developers have introduced to the market and the actual demand from potential homeowners. The analysis reveals that the most at-risk assets are opportunistic developments targeting high-income buyers and that despite political and economic instability, property owners have continued to realize returns on real estate. At the time of writing this paper, there are no formal metrics to track the movement of real estate prices in Beirut. Two indices are constructed using transaction data to address this using the hedonic and repeat sales models. Finally, the different factors that have affected the real estate market are explored, including slow wage growth that has prevented homeowners from keeping up with housing prices, massive public debt that has paralyzed subsidization programs, and a high cost of debt that has made it difficult and unattractive to finance both new construction and homeownership. / by Abdulrahman Hammoud. / 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: M. Arch., Massachusetts Institute of Technology, Department of Architecture, May, 2020 / Thesis: S.M. in Real Estate Development, Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate, May, 2020 / Cataloged from PDF version of thesis. / Includes bibliographical references (page 120). / The history of cultivating cannabis can be traced back to at least the 3rd millennium BCE, as evidence suggests it was consumed for psychoactive effects at least 2,500 years ago in the Pamir Mountains in central Asia. Viewed quite negative in recent centuries though, cannabis is currently illegal in most of the countries in the world, including the United States at the federal level. Started as early as in the 1970s, cannabis was first legalized in few states in the US for medical use. Later, as more states adopted lenient policies on the substance, the voice for the decriminalization of recreational cannabis increased. Now, as 12 states already legalized recreational cannabis and more than 30 states permit medical cannabis, the cannabis industry presents not only core business opportunities but also an arena for related building and facility design and development. Excited about this landscape, this thesis aims to explore unique building prototypes for cannabis operators and examine innovative investment opportunities through real estate investment trust (REIT) in the cannabis industry. / by F. Finn Xu. / M. Arch. / S.M. in Real Estate Development / M.Arch. Massachusetts Institute of Technology, Department of Architecture / 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, 2020 / Cataloged from the official PDF of thesis. / Includes bibliographical references. / This paper searches for the property value component due to existence of a redevelopment option. We do an empirical study based on over 6,600 industrial property transactions across United States from 2000 to 2018. This can be seen as a discovery journey of improving the methodology in identifying and evaluating the redevelopment option value embedded in the transaction price of such property traded among investors in the private property market. Starting from simple OLS regression, we observed a reverse causality phenomenon between property sales price and a dummy variable of the intention to redevelop the property, in which the redevelopment flag was associated with lower priced properties. The journey then ended up verifying the improvement in the most advanced methodology that academics on the frontier apply in studying the value of the redevelopment option. This advanced methodology by Buechler et al (2020)1 deploys an empirical analysis strategy using a probit model to develop a redevelopment propensity metric, instead of the dummy variable of redevelopment intention. We apply this methodology to solve the endogeneity problem with the original simple OLS regression, and we find that industrial properties have an average redevelopment probability of 0.22, which generates option value of $5.8/sqft (land), or 19% of the average property price per square foot of land ($30.2/sqft(land)). Comparing our study findings for industrial property with that of the Buechler et al study (2020) which is on all property types, the implication is that on average redevelopment option value tends to be a greater percentage of industrial property value than for the other types of commercial properties. The option value is not necessarily greater in absolute terms, but relative to the value of the property. These results apply on average to all industrial properties, not just to those sold specifically to be redeveloped. / by Yuling She. / 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, 2020 / Cataloged from the official PDF of thesis. / Includes bibliographical references (pages 71-74). / Much has been written concerning the positive socio-economic values of urban manufacturing and the need for cities to advocate for the protection of existing middle-income wage jobs in the industrial sector. However, there lie governing factors as to why a use, that has always been essential to communities, has become very hard to grow or even sustain in the present time. Urban growth models were usually developed around the idea that industrial uses are a negative externality. Unlike numerous cities that witnessed complete deindustrialization after World War II, New York City has over the years transformed the identity of its Manufacturing districts. The revival of urban manufacturing in the heart of NYC, where the highest and best use is not in favor of industrial use, has pushed for re-visiting the outdated industrial zoning framework for the first time since the 1961 zoning resolution. / The North Brooklyn Industrial Business Zone, a protected manufacturing district spanning across 1,066 acres and the third-largest industrial hub in the city by employment, is set out to become the blueprint for a proposed rezoning framework by NYC's Department of City Planning. The rezoning was initiated as part of the industrial action plan launched in 2015 and aims to create new models for innovative and diverse neighborhoods through mixed-use commercial and industrial uses. In 2018, The Department of City Planning released a draft rezoning framework outlining an additional density to support commercial investment in a growing of a mixed-use market. However, the plan does not define a clear strategy that aims to maintain net-zero losses in industrial jobs. In effect, a simple up-zoning applied to industrial land will not hold back competing uses from outbidding industrial tenants and creating further industrial displacement. / By shedding light on New York City's industrial land use policies and the mechanisms that helped maintain and grow its manufacturing ecosystem thus far, this thesis will demonstrate the feasibility and challenges facing industrial space development within the newly proposed North Brooklyn Re-Zoning Framework and under current market conditions. As part of the feasibility study, several deal structures will be explored from private development, public-private partnership, and industrial community land trusts which improve both the feasibility as well as the retention of businesses. / by Salma Abdelgawad. / 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

La economía moderna ha evidenciado la existencia de crisis financieras provocadas por burbujas especulativas racionales, siendo una de las más sensibles las burbujas inmobiliarias. Los episodios de burbuja, en este trabajo son definidos como períodos explosivos del precio del m2, los cuales no tienen explicación en la evolución de su valor económico. La detección de comportamientos exuberantes en los mercados financieros y la ejecución de pruebas especializadas de detección son de suma importancia. Este documento aplica la metodología de detección de burbujas expuesta por Phillips, Shi y Yu (2012) al mercado inmobiliario de Lima para dos series de distritos los cuáles son denominados “sector alto” (5 distritos) y “sector medio” (10 distritos). Los resultados muestran la existencia de un período de burbuja de precios a partir de los años 2012 y 2013 para la serie de 5 distritos y 10 distritos respectivamente. Este resultado se mantiene para varias pruebas de robustez, como por ejemplo, distintas ventanas de regresión, segmentos de precio y métodos alternativos para generar las pruebas de detección. / The modern economy has evidenced the existence of financial crises caused by rational speculative bubbles, one of the most sensitive being property bubbles. The bubble episodes, in this paper are defined as explosive periods of the m2 price, which have no explanation in the evolution of its economic value. The detection of exuberant behaviors in the financial markets and the execution of specialized detection tests are very important. This document applies the bubble detection methodology set forth by Phillips, Shi and Yu (2012), to the Lima real estate market for two series of districts which are called "high sector" (5 districts) and " middle sector” (10 districts) The results show the existence of a price bubble period from 2012 and 2013 for 5 districts and 10 districts respectively. This result is permanent for various robustness tests, such as different regression windows, price segments, and alternative methods of generating the tests. / Trabajo de investigación

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 (page 65). / Real estate development in China is a fast-paced business. Volatile market conditions have prompted Chinese developers to build and sell quickly in an attempt to mitigate market fluctuation risk, especially when the real estate market is hot. But are they leaving money on the table? We've conducted a rigorous quantitative analysis of Dushi Huayuan-a large-scale residential project in the fictitious city of Gangkou Shi-from the standpoint of its developer Acumen Properties. The thesis takes the form of a traditional business case study: we first crafted the story based on actual events, then built a Monte Carlo simulation model using Excel to test the value of flexibility specifically the value of dividing the project into multiple phases-at Dushi Huayuan, and finally designed three exercises for students to learn not only the technical aspects of modeling, but also the business concepts related to working in the Chinese real estate market. The exercises will walk students through the following: (1) build a simulation process to reflect the crucial exogenous dynamic economic variables that largely determine the project's financial outcome; (2) expand upon this model by introducing phases in the project to understand how this new flexibility can affect expected net present value; and (3) employ the use of a waterfall analysis to examine fairness from an investment perspective between joint venture partners using standard-market terms. Chinese developers-along with most developers worldwide-typically make decisions based on their experiences and intuition but without the use of detailed quantitative analysis. Our thesis ultimately seeks to change generally accepted industry practice by creating a pedagogical tool to help future real estate leaders better understand the advantages of using quantitative methods to inform rational business decisions. / by Qing Ye and Eric Mo. / 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 59). / Since 2013, investors from the People's Republic of China (PRC) have made significant strides in the global real estate market, especially in developed regions such as North America, Australia, and Western Europe. From 2014 to 2016, this trend became stronger, and by 2016 Q3, China became the top cross-border real estate investment country by transaction volume. We ask the following question: After the prosperity of the last three years, will the global investment trends of PRC investors remain steady or not? This thesis first reviews the progress made by PRC investors in recent years and the key reasons for it. It then discusses PRC investors investment preferences and strategies. The discussion then focuses on includes pragmatic considerations of tax matters and domestic regulatory problems in the PRC. The thesis concludes by exploring new trends in the market and speculating about the future of cross-border real estate investments by PRC citizens. / by Qing Wang. / 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. 141-142). / Real estate investment firms have the ever increasing need for understanding their firm's strengths and weaknesses, their performance relative to their peers and competitors, and for developing assessment tools for facilitating more informed investment and management decisions. One potentially very useful tool to further these objectives, a tool that is so far underutilized and underappreciated, is investment performance attribution analysis. Such performance attribution may be broadly characterized as the partitioning of the total investment return of a particular manager or portfolio in order to quantify and help to understand and assess the components and determinants of the overall investment performance. Traditional investment attribution analysis, adopted from the securities investment industry, has focused primarily on the portfolio level, where property selection and allocation factors are the two primary attributes of total return that can be parsed and benchmarked. In the case of real estate investments, property-level investment functions such as operational management and asset transaction execution, which are not captured by a traditional attribution analysis, also play a major role in the overall investment returns. During the past two decades a system to drill the investment performance attribution down to a deeper level, separating the asset "selection" component into further breakouts, including income return and components of the capital return (cash flow change and yield change), have been propounded by influential firms such as the Investment Property Databank (IPD) based in the UK. In a 2003 article David Geltner proposed a system for property-level performance attribution (PPA) based on the since-inception IRR of each individual property investment. This thesis furthered Geltner's work on PPA by an in depth exploration of the application of the IRR-Based Property-Level Performance Attribution analysis based on a large-scale, real-world-based case study of a complete set of actual core-asset round-trip transactions completed by several internally managed funds in the institutional investment industry. Furthermore, this thesis explored the use of PPA for organizational management diagnostics, and thereby demonstrated the potential of using the PPA analysis as an investigative tool for developing plausible hypotheses about a firm's investment management strengths and weaknesses. / by Tony Feng. / 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. / 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. 83). / Housing unit prices differ among 75 street blocks per time period in Chengdu, China. Housing unit price's appreciation also moves differently in the 75 street blocks between 2005 and 2010. With solid transaction data acquired from Chengdu Housing Administration Department, two regression models, Level Model and Change Model are exercised to explore two questions: What are determinants of cross-section housing unit price difference and what are determinants of housing unit price movement in time? The findings are consistent with urban economic theory and actual practice in the market. In conjunction with physical attributes and locational features, the thesis found from the Level Model that economic and demographic characteristics, which are representations of urban economic growth, industrial restructuring and demographic transformation, are also significant determinants that have been capitalized into housing unit price at various levels. In a rapid developing city like Chengdu, the thesis found from the Change Model that instead of the change of various factors, inherent locational features and the initial price per street block play significant roles moving unit price upward in both short-term (1-year) and relatively long-term (5-year). Such finding exhibits consistent market anticipation that housing and amenity demand constantly outpace its supply in Chengdu. Additional Level Models defined by unit size reveal differentiated capitalization effects from same group of locational features. The result ties various sizes of units with corresponding housing products. Subsequently it proves that demographic structure is a significant determinant of housing price dynamics. Field trip and interview are conducted to bridge academic analysis with real market. The findings from qualitative research contribute valuable inputs to improve the models. Understanding determinants that are capitalized into price and move price appreciation is useful to household to guide wise investment. The research is also referable to developer who can make sound assessment on developable land with better understanding of its potential value. The more inclusive analysis of spatial housing price dynamics will assist policy maker to establish proper urban policy in the effort to balance urban structure between housing and jobs. / by Jin Chen. / 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. / 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. 85-87). / Real estate is often considered an asset to provide long term value enhancement and to protect institutional investors against inflation risk. It is a typical real asset due to the physical form and fixed geographic location with a steady return. However, real estate has its limitations. Risks associated with it such as lack of trading flexibility, special property management expertise required, and a growth prospect not always applicable towards the short term favor have impeded certain institutional investors from allocating major investment in real estate. In management of a dynamic investment portfolio, how institutional investors look at certain real assets is the key issue discussed in this thesis. Infrastructure, for instance, which can refer to roll roads, shipping or railways, is a comparable asset with real estate as it demonstrates a term with physical form and stable income stream. There are other types of real assets such as commodity, regulated utilities, and maritime assets which are also studied. This thesis delves into the dynamic structure of an institutional investment portfolio and targets to explore the following questions: What do real assets contribute to institutional investors' traditional stock-and-bond portfolio? What kinds of correlations do real assets have with typical equity and fix-income assets? How do institutional investors strategize their investment plan by allocating real assets in their global portfolio? The thesis is designed to study the underlying factors for determining the asset allocation framework from both a qualitative and a quantitative perspective. A quantitative analysis including mean-variance optimization, downside risk, correlations, risk parity and Value at Risk will test out how various asset allocation frameworks position real assets in a portfolio. The study also brings in selected real estate indexes to examine how different parings compare with each other and what impact does illiquidity exhibits on portfolio management. An interview-based research is designed to provide understanding of institutional investors' perspective on how they apply the theoretical framework to the real world practice and how they strategize the management of investment portfolios. / by Xiangyu Li. / S.M.in Real Estate Development