EON Investment Insights
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How do demand, rent, vacancy and delayed construction create real estate cycles? Explore the six-equation stock-flow model through a video, an interactive Office/Housing simulator and an illustrative Tbilisi housing adaptation.
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 […]
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 […]
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 […]
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, […]
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 […]
Rank-Size Rule (also known as Zipf’s Law) states that a city’s population size tends to be proportional to the largest city’s population divided by the city’s rank (its […]
Why can property prices rise while rents barely move? Explore the DiPasquale–Wheaton four-quadrant model and use the interactive scenarios to see how demand, cap rates, construction costs and depreciation connect rents, asset prices, building incentives and the long-run stock of space.
To assess the growth potential of a city, an analysis of its economic base is employed. What does this entail? The economic base of a city is divided […]
To evaluate real estate, TWR (Time-Weighted Return) is often used instead of IRR (Internal Rate of Return). TWR represents the geometric mean of returns derived from operational income […]
Diversification is often a key factor driving investment in real estate. The charts below illustrate the efficient frontiers of two portfolios for the period 1978-2009. On the vertical […]
As with any other income-generating asset, replacing real estate makes sense only if the funds obtained from selling it can be invested in another asset with better returns […]
Does it matter if you purchase an Income stock or a Growth stock? Does a company’s decision to distribute dividends or reinvest earnings impact the stock price? The […]
Do You Use IRR to Evaluate Projects? Consider This: Many financial professionals use the Internal Rate of Return (IRR) for project evaluation, but it can be highly misleading. […]
Should an Organization Diversify into Different Business Areas? This question is crucial because one of the fundamental principles in financial theory is the principle of value additivity, which […]
How Does Diversification Reduce Risk? In finance, risk refers to the range of deviation from the forecasted or expected returns. This range is often based on historical statistics […]
In the previous entry, I discussed how diversification can reduce an organization’s specific risks and mentioned that diversification cannot influence overall systemic, or market, risks. Imagine we have […]
