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 61-65). / One might argue real estate is entering a period where technological innovations have greater impact on investment returns than conventional metrics related to the overall economy. While this has already been demonstrated by e-commerce disrupting the retail and logistics landscape, industry leaders are now starting to become more and more attentive to mobility related implications, resulting from the recent advent of ride-hailing providers like Uber, Lyft, and Didi. Broad literature, generated over the past decades and applying widely recognized econometric concepts, emphasizes the significance of public transport access for residential real estate values. More recently, claims arose that the value of proximity to public transport is being challenged by ride-hailing, serving as a substitute for rail and bus services. While the existence of a certain substitution effect is supported and documented by academic studies, research about its impact on real estate is rare. This thesis analyzes the value change of public transport access over time, by applying a hedonic regression model to a sample of 257,100 residential real estate transactions which have taken place in New York City between January 2005 and June 2018. The distance between each individual home and the closest of 550 heavy rail transit stops is used to determine the value of proximity to public transport in these transactions. Contrary to anecdotal claims and economic theory, the results of this analysis suggest that the value of proximity, i.e. rent gradients towards heavy rail transit stops, increases over the observed time period, especially since the emergence of Uber and within walking distance (0.5 miles) from transit access points. Since mobility innovation's long-term effects might not be in line with short-term implications and notable regional variances might exist, the thesis recommends ongoing analysis of the subject matter and expanding the research from New York City to various markets with different urban shapes, transportation modes, and demographics. / by Dietmar E.A. Weissmann. / 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. 101-102). / Recently, we have observed significant changes in which corporate offices and residential buildings have been relocated from the suburbs back into the city. Does the observation mean that there is a real economic movement back into the cities by firms or households? If there is any movement, how does this trend drive any changes in the commercial real estate properties? Does it significantly affect the performance of properties in the cities as opposed to the other areas? Does the performance of the properties in the city exert any influence on the investors who prefer commercial real estates in the US metropolitan areas? This thesis aims to provide answers to the major question on the "back to the city" movement and its influence on real estate markets. The answers are summarized as five major conclusions. First, the result of this study clearly points out that there is the "back to the city" movement although the change has happened only in the Urban Cores (UC) not the entire Metropolitan Statistical Area (MSA). Second, the economic performances between UC and MSA maintain a close link with each other. However, the volatility of the office net rental rate is much less in UC while the change in gross rental growth is almost same between UC and MSA. The UC rental growth of the multifamily is a little less volatile than the MSA growth. Third, the investment performances in MSA closely relates with the capitalization rate of UC. While the level of cap rates of UC offices is more volatile, the UC cap rate of apartments is more stable than the MSA rate. Fourth, the effects of population and employment on the real estate market enable the research to understand the current pricing behaviors. The difference in population and employment between UC and MSA explains the disparity in investment performances of the two areas. However, while the MSA rental growth explains the movements in the cap rate of MSA in accordance with the "rational" pricing, the effect of UC rental growth rates on the cap rate doesn't match with the pricing model, indicating that the rental growth rate of UC empirically leads to increases in the cap rate of the area. The nature of these outcomes offers that the UC market is not explicable by the "rational" pricing model. The result also indicates that the difference in rental growth rates reveals the positive relation with the gap in cap rates, which is complete opposite to the "rational" investors' behavior. Lastly, finding the differences in economic and investment performances between UC and MSA motivates to explore the determinants of the relationship. Although the study experiments the effects of manifold market characteristics, the explanatory variables used in the model do not fully explain the inequality between two specific markets. Thus, it is required to study further the determinants. / by Inae Hwang. / 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. 91-94). / This thesis explores the likely impacts the proposed changes to lease accounting would have on corporate real estate decisions. The Financial Accounting Standards Board (SFASB) and the International Accounting Standards Board (IASB) plan to establish a unified set of principle-based accounting systems into a unified set of principle-based standards in an effort to improve financial transparency and comparability across world markets. One component of this plan, centered on reform of current lease accounting standards, would eliminate the distinction between capital and operating leases and require almost all leases to be recognized as an asset and liability on the balance sheet. This represents a significant departure from the current accounting guidance under Generally Accepted Accounting Principles (GAAP), which requires American companies are only required to disclose only limited information about future operating lease requirements in the footnotes of financial statements. What's more, empirical evidence suggests that many companies structure leases to obtain this type of offbalance- sheet financing that operating leases afford. For companies with relatively large operating lease portfolios, the new accounting standards would have a significant impact on their balance sheets. If these companies consider accounting treatment in their real estate decisions, they may be inclined to pursue alternative real estate strategies to mitigate this impact. That being said, the corporate real estate decision-making process is complex; therefore any strategy aimed at achieving a specific accounting treatment must consider other relevant and potentially more important factors. This study analyzes the proposed changes to lease accounting and explores how corporate real estate managers consider the effects of accounting in their real estate decisions. Specific hypotheses are tested through targeted interviews with a diverse group of public and private tenants and landlords to identify the variables that would determine a particular company's incentive to change its real estate strategy in response to new accounting guidelines. Results of interviews are discussed and predictions are made regarding the future of real estate leasing strategies. / by Timothy R. Canon and Christina A. Fenbert. / 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. / Pages 93 and 94 blank. Cataloged from student-submitted PDF version of thesis. / Includes bibliographical references (p. 90-92). / Prevalent methodologies utilized by resort second home development professionals to quantify demand for future projects are identified and critiqued. The strengths of each model are synthesized in order to formulate an original, composite methodology for demand quantification with industry-wide applicability. This "best practices" synthesized model is then applied to a real world case study and back tested in an effort to gauge its accuracy. After analysis of its performance, modifications are made and an innovative method for forecasting absorption is added to its framework. The resulting product of this effort is the creation of the Comprehensive Resort Second Home Demand Forecasting Model. / by Christopher J. Wholey. / 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 105-108). / Robot van der Rohe is a redevelopment proposal for the Seagrams Building at 375 Park Avenue in New York City. A concept for a Conscious Building is developed after a thorough introduction of financial, architectural and technological underpinnings. The topics of innovation economics, real estate finance, building design and construction, architectural history and theory, ubiquitous computing, sensor technologies, urban economics and design, zoning and network science are covered. Robot van der Rohe represents a future vision of a dynamic and fluid high-rise, mixed-use office tower. By utilizing a sophisticated suite of sensors, the building is able to better respond to the needs of its occupants, operate more energy efficiently and encourage a productive and happy workplace. By quantifying how teams work within the building, Robot van der Rohe represents the next generation of office environments and will allow for the reduction in the economic cost of social capital. By reducing the cost of a fundamental input of production, such a Conscious Building is poised to capture entrepreneurial profits through increased rents. In the world of the Conscious Building, the computer programmer augments the architect and the building owner becomes curator of a forever-innovating network of tenants. / by Charles Alexius Steelman-Dyer. / 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 50-51). / We all know for diversification purposes we cannot "put all our eggs in one basket." Markowitz's Modern Portfolio Theory leads us to diversify our portfolio to achieve the highest Sharp ratio. Fama-French's Three-Factor Model links the asset's characteristics to the risk-return profile and further advances the portfolio theory. However, in practice, due to uncertainty and lack of data, none of those theories gets implemented in a way that can help construct a complex portfolio and generate portfolio optimization strategies. Especially for the Commercial Real Estate Industry, investors face challenges in long-term data collection and a tremendous amount of data processing. In 2009, Michael W. Brandt, Pedro Santa-Clara, and Rossen Valkanov explored a new approach that fundamentally improves the portfolio optimization methodology. They modeled the portfolio weight in each asset as a function of the asset's characteristics and the associated capital market conditions. The coefficients of this function are found by optimizing the investor's average utility of the portfolio's return over the sample period. This approach is computationally simple, and can be easily modified to include more asset characteristics and capital market variables. In a later study, Alberto Plazzi, Walter Torous, and Rossen Valkanov applied Brandt, Santa-Clara, and Valkanov's methodology to optimize commercial real estate portfolios, and explored several techniques in commercial real estate portfolio management. This thesis follows Plazzi, Torous and Valkanov's research framework, applies the methodology to a specific real estate investment fund, and proposes several innovations to further explore the application of this theory in real estate fund management. First, I propose to rebalance the portfolio annually because real estate transactions are less frequent compared with other types of assets, such as stocks or bonds. Second, I construct sub-portfolios by property type and region because the sub-portfolio optimization can provide practical suggestions to specific asset managers in charge of a specific type of property or a specific region. Finally, I include capital market indicators, such as the Chicago Fed National Activity Index and Liquidity Metrics. These innovations use academic research to inform practice, thus providing asset managers practical suggestions to guide wealth allocation across different commercial properties, and to take advantage of movements in expected returns arising from the changing macroeconomic conditions. / by Yanjia Liu. / 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 62-63). / The main objective of this study is to understand and analyze the risk adjusted returns of office building and portfolios and determine whether institutional real estate investors are allocating capital efficiently. NCREIF data from years 1999 to 2014 years will be analyzed. The data will be split into three proportional classes, upper (Class A), middle (Class B), and tertiary (Class C) classes based on asset price per square foot and then their risk adjusted returns will be analyzed with the Sharpe Ratio. Further, based on these findings, the thesis will determine whether a quantitative measure of building classification can be established. Currently, real estate assets, office or otherwise, are only classified qualitatively / by Nason Khomassi and Swapn Shah. / 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. 93-95). / This thesis presents a pioneering application of an engineering systems framework, the Design Structure Matrix (DSM), to model the real estate development (RED) process. The DSM is a process modeling tool that originated recently in the branches of engineering systems and management science, and is primarily used to study product development processes. The DSM is an n-squared graphical matrix representation of a process that is particularly well suited to model both the sequential and iterative informational relationships between tasks in a product development process. The similarities between product development and the real estate development process make DSM an excellent fit for applying the DSM. The thesis first reviews existing models of the RED process but finds them lacking a combination of granularity and ability to model the highly iterative nature of the RED process. This limits their effectiveness for conveying information useful to practitioners. No previous RED model describes the process at a task level or has the ability to model iterative or sequential information flows between tasks. The DSM developed in this thesis first presents a normative or baseline model of a RED project. The model was developed through the participation and assistance of MIT/CRE industry partner, Jones Lang LaSalle (Boston Office). Through a series of interviews and meetings, the authors first developed a Six Stage Event Sequence model of RED with decision-gates found to occur during the process. The six stages were then expanded with JLL's assistance into a table of 91 individual tasks necessary for successful completion of a RED project. / (cont.) Finally, again with JLL's engagement, the 91X91 'Baseline' RED process DSM was constructed, identifying 1,148 planned informational inter-task interactions (out of 8,281 potential interactions). The 'Baseline' DSM model was then manipulated to highlight important aspects of the RED process including the iterative and interdisciplinary nature of RED. Several typical development scenarios are then modeled to highlight the utility of DSM as a management tool in practice. The models show how unplanned iteration can become a significant cause of project risk and failure. They also highlight the risks and opportunities that task re-sequencing can have on a project. This thesis demonstrates the DSM to be a useful and effective model of the RED process enabling new insight and understanding. The highly complex and iterative RED process can be graphically modeled in great detail in a visually appealing manner. Additionally, the RED DSM proves to be an adaptive and manipulative tool that allows for a multi-layer grasping of the RED process, able to assist in project management, change management, identification of risks and opportunities, and firm-level organizational structure and procedures. Additionally, the RED DSM model proves to be a useful pedagogical device for teaching real estate students. / by Benjamin Bulloch and John Sullivan. / 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, 2016. / 880-01 / Cataloged from PDF version of thesis. / Includes bibliographical references (pages 75-76). / In recent years, global interest in the effects of climate change have increased dramatically. Private industries are becoming aware of the needs to address environmental impacts of development. Thailand's commercial real estate industry has been under little pressure despite being responsible for over 40% of all the energy consumption in Thailand. The real estate industry is in a distinct position to address the issue of energy consumption and the barriers to green building adoption. As part of the corporations' marketing strategy, green certification is a branding approach that limits the environmental impact of real estate development. By conforming to the LEED criteria, the green certified building introduces a new office product and building management paradigm to mainstream commercial real estate development. However, the barriers to green buildings continue to exist, including the ability to deliver green projects within appropriate cost expectations. Modifications must be made to traditional project management practices for project managers to deliver green construction projects. The objective of this paper is to recommend specific modifications to traditional building practices in Thailand with the goal of optimizing the delivery of cost-efficient green office buildings. Through the analysis of five LEED certified offices, this thesis explores the innovation sources, delivery methods, contractual forms, and risk allocation in implementing of Grade A green office buildings. The thesis finds that the private sector plays a crucial role in advancing green development practices. Project success motivates the government to encourage innovation through regulation and training. The projects that illustrate the most innovative method comprise of small and multi-disciplinary development team structures with a heavyweight project manager. An examination of the implementation process of green certified office buildings reveals that much of the anticipated risks related to innovation's stage of green adoption is related to educational gaps in the industry. Specific provisions which include incentive and penalty systems designed for constant adjustments help to mitigate risks and regulate relationship between developers and consultants. In implementing green construction practices, design phase could also incorporate environmental analysis by an in-house team with energy and sustainability backgrounds who inspire collaboration of generalists and a specialized workforce. / by Peerati Upatising. / 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 69-75). / This thesis examines the rules and regulations influencing foreign investments in India's real estate sector. Specifically, this thesis discusses the Foreign Direct Investment Policy, The Foreign Exchange Management Act and the Reserve Bank of India's Foreign Exchange Management Regulations. Combined, they presents a comprehensive regulatory roadmap for the foreign investor evaluating an entry into the country's real estate sector. / by Navaneeth Raj Conjeevaram. / S.M. in Real Estate Development