Real Estate Investments
Valuation of Long-term leases
Imagine you own a commercial real estate property that is leased under a 10-year fixed-rate contract. Once the contract expires, you will need to re-lease the property for […]
Archive
Category: Commercial Real Estate Analysis and Investments, D. M. Geltner, N. G. Miller, J. Clayton, P. Eichholtz
Real Estate Development
6 Equations Stock-Flow Model
The Inventory Dynamics Model describes the equilibrium dynamics and cyclicality of the real estate market. (The model is associated with Kenneth Rosen, William Wheaton, Patric Hendershott, and others.) […]
Real Estate Development
Property Life Cycle
A property has a life cycle—it is created, ages, depreciates, and is eventually redeveloped. Because of this, investors view real estate as comprising two parts: land value and […]
Real Estate Development
City Development Models
Urban land use and density are shaped by economic principles and social factors. The classical monocentric city model provides a foundation for understanding urban spatial economics, but real-world […]
Growth
How Uncertainty Creates Real Estate Value
When we discussed the monocentric city model, we described the value of real estate in terms of rents rather than prices. While rent levels are directly related to […]
Real Estate Development
Monocentric City Model
The monocentric city model, despite its simplicity, provides fascinating insights into how cities form and what factors influence real estate prices, such as location, spatial growth, population growth, […]
Real Estate Development
Residual Theory of Land Value
The demand for construction land is derived demand, not direct demand. Land serves as a production factor—it is not needed for final consumption but rather for hosting buildings […]