Dissertations / Theses on the topic 'Real estate and valuation services'

According to the Reserve Bank of Australia (2006) the increased supply of Commercial Mortgage-Backed Securities (CMBS), with a range of subordination, has broadened the investor base in real estate debt markets and reduced the commercial property sector’s dependence on bank financing The CMBS market has been one of the most dynamic and fastest-growing sectors in the capital markets, for a market which was virtually nonexistent prior to 1990. The global CMBS market issuance which stood at AU$5.1 billion (US$4 billion) in 1990 had grown to AU$380 billion (US$299 billion) by the end of 2006. In Australia, a total of over 60 CMBSs with nearly 180 tranches totalling over AU$17.4 billion had been issued to December 2006 from when they were first introduced in 1999. To date few studies have been done on Australian CMBSs outside the credit rating agency circles. These studies are predominantly practitioner focused (Jones Lang LaSalle 2001; Richardson 2003; Roche 2000, 2002). O’Sullivan (1998) and Simonovski (2003) are the only academic studies on CMBSs. As such, this thesis examines issues relating to the development of Australian CMBSs and quantitatively and qualitatively analyses the structuring of Australian CMBSs. In assessing the growth of the Australian CMBS market, an interpretive historical approach (Baumgarter & Hensley 2005) is adopted to provide a cogent review and explanation of features of international and Australian CMBSs. This helps to understand the changing nature of the market and provides better understanding of the present and suggests possible future directions. The Australian CMBS market is matured in comparison with the larger US and EU CMBS markets as seen by the diversity of asset classes backing the issues and transaction types, tightening spreads, and record issuance volumes. High property market transparency (Jones Lang LaSalle 2006b) and predominance of Listed Property Trusts (LPT) as CMBS issuers (Standard & Poor’s 2005b), who legally have to report their activities and underlying collateral performance to regulatory regimes such as Australian Stock Exchange (ASX)/Australian Securities and Investment Commission (ASIC) and their equity partners, have contributed to the success of the Australian CMBS market. Furthermore, the positive commercial real estate market outlook should support future CMBS issuance, with LPTs continuing their dominance as issuers. In investigating property risk assessment in Australian CMBSs, all the CMBSs issued over a six year period of 2000 to 2005 were obtained from Standard and Poor’s presale reports as found in their Ratings Direct database to identify and review how property risk factors were addressed in all issues and within specific property asset classes following the delineation of property risk by Adair and Hutchinson (2005). Adequate assessment of property risk and its reporting is critical to the success of CMBS issues. The proposed framework shows that assessing and reporting property risk in Australian CMBSs, which are primarily backed by direct property assets, under the headings of investment quality risk, covenant strength risk, and depreciation and obsolescence risk can easily be done. The proposed framework should prove useful to rating agencies, bond issuers and institutional investors. Rating agencies can adopt a more systematic and consistent approach towards reporting of assessed property risk in CMBSs. Issuers and institutional investors can examine the perceived consistency and appropriateness of the rating assigned to a CMBS issue by providing inferences concerning property risk assessment. High property market transparency (Jones Lang LaSalle 2006b) and predominance of Listed Property Trusts (LPT) as CMBS issuers (Standard & Poor’s 2005b), who legally have to report their activities and underlying collateral performance to regulatory regimes such as Australian Stock Exchange (ASX)/Australian Securities and Investment Commission (ASIC) and their equity partners, have contributed to the success of the Australian CMBS market. Furthermore, the positive commercial real estate market outlook should support future CMBS issuance, with LPTs continuing their dominance as issuers. In investigating property risk assessment in Australian CMBSs, all the CMBSs issued over a six year period of 2000 to 2005 were obtained from Standard and Poor’s presale reports as found in their Ratings Direct database to identify and review how property risk factors were addressed in all issues and within specific property asset classes following the delineation of property risk by Adair and Hutchinson (2005). Adequate assessment of property risk and its reporting is critical to the success of CMBS issues. The proposed framework shows that assessing and reporting property risk in Australian CMBSs, which are primarily backed by direct property assets, under the headings of investment quality risk, covenant strength risk, and depreciation and obsolescence risk can easily be done. The proposed framework should prove useful to rating agencies, bond issuers and institutional investors. Rating agencies can adopt a more systematic and consistent approach towards reporting of assessed property risk in CMBSs. Issuers and institutional investors can examine the perceived consistency and appropriateness of the rating assigned to a CMBS issue by providing inferences concerning property risk assessment. The ultimate goal of structuring CMBS transactions is to obtain a high credit rating as this has an impact on the yield obtainable and the success of the issue. The credit rating process involves highly subjective assessment of both qualitative and quantitative factors of a particular company as well as pertinent industry level or market level variables (Huang et al. 2004), with the final rating assigned by a credit committee via voting (Kwon et al. 1997). As such, credit rating agencies state that researchers cannot replicate their ratings quantitatively since their ratings reflect each agency’s opinion about an issue’s potential default risk and relies heavily on a committee’s analysis of the issuer’s ability and willingness to repay its debt. However, researchers have replicated bond ratings on the premise that financial ratios contain a large amount of information about a company’s credit risk. In this study, quantitative analysis of determinants of CMBS credit ratings issued by Standard and Poor’s from 2000 – 2006 using ANNs and OR and qualitative analysis of factors considered necessary to obtain a high credit rating and pricing issues necessary for the success of an issue through mail surveys of arrangers and issuers are undertaken. Of the quantitative variables propagated by credit rating agencies as being important to CMBS rating, only loan-to-value ratio (LTV) is found to be statistically significant, with the other variables being statistically insignificant using OR. This leads to the conclusion that statistical approaches used in corporate bond rating studies have limited replication capabilities in CMBS rating and that the endogeneity arguments raise significant questions about LTV and debt service coverage ratio (DSCR) as convenient, short-cut measures of CMBS default risk. The ultimate goal of structuring CMBS transactions is to obtain a high credit rating as this has an impact on the yield obtainable and the success of the issue. The credit rating process involves highly subjective assessment of both qualitative and quantitative factors of a particular company as well as pertinent industry level or market level variables (Huang et al. 2004), with the final rating assigned by a credit committee via voting (Kwon et al. 1997). As such, credit rating agencies state that researchers cannot replicate their ratings quantitatively since their ratings reflect each agency’s opinion about an issue’s potential default risk and relies heavily on a committee’s analysis of the issuer’s ability and willingness to repay its debt. However, researchers have replicated bond ratings on the premise that financial ratios contain a large amount of information about a company’s credit risk. In this study, quantitative analysis of determinants of CMBS credit ratings issued by Standard and Poor’s from 2000 – 2006 using ANNs and OR and qualitative analysis of factors considered necessary to obtain a high credit rating and pricing issues necessary for the success of an issue through mail surveys of arrangers and issuers are undertaken. Of the quantitative variables propagated by credit rating agencies as being important to CMBS rating, only loan-to-value ratio (LTV) is found to be statistically significant, with the other variables being statistically insignificant using OR. This leads to the conclusion that statistical approaches used in corporate bond rating studies have limited replication capabilities in CMBS rating and that the endogeneity arguments raise significant questions about LTV and debt service coverage ratio (DSCR) as convenient, short-cut measures of CMBS default risk. However, ANNs do offer promising predictive results and can be used to facilitate implementation of survey-based CMBS rating systems. This should contribute to making the CMBS rating methodology become more explicit which is advantageous in that both CMBS investors and issuers are provided with greater information and faith in the investment. ANN results show that 62.0% of CMBS rating is attributable to LTV (38.2%) and DSCR (23.6%); supporting earlier studies which have listed the two as being the most important variables in CMBS rating. The other variables’ contributions are: CMBS issue size (10.1%), CMBS tenure (6.7%), geographical diversity (13.5%) and property diversity (7.9%) respectively. The methodology used to obtain these results is validated when applied to predict LPT bond ratings. Both OR and ANN produce provide robust alternatives to rating LPT bonds, with no significant differences in results between the full models of the two methods. Qualitative analysis of surveys on arrangers and issuers provides insights into structuring issues they consider necessary to obtain a high credit rating and pricing issues necessary for the success of an issue. Rating of issues was found to be the main reason why investors invest in CMBSs and provision of funds at attractive rates as the main motivation behind CMBS issuance. Furthermore, asset quality was found to be the most important factor necessary to obtain a high credit rating supporting the view by Henderson and ING Barings (1997) that assets backing securitisation are its fundamental credit strength. However, ANNs do offer promising predictive results and can be used to facilitate implementation of survey-based CMBS rating systems. This should contribute to making the CMBS rating methodology become more explicit which is advantageous in that both CMBS investors and issuers are provided with greater information and faith in the investment. ANN results show that 62.0% of CMBS rating is attributable to LTV (38.2%) and DSCR (23.6%); supporting earlier studies which have listed the two as being the most important variables in CMBS rating. The other variables’ contributions are: CMBS issue size (10.1%), CMBS tenure (6.7%), geographical diversity (13.5%) and property diversity (7.9%) respectively. The methodology used to obtain these results is validated when applied to predict LPT bond ratings. Both OR and ANN produce provide robust alternatives to rating LPT bonds, with no significant differences in results between the full models of the two methods. Qualitative analysis of surveys on arrangers and issuers provides insights into structuring issues they consider necessary to obtain a high credit rating and pricing issues necessary for the success of an issue. Rating of issues was found to be the main reason why investors invest in CMBSs and provision of funds at attractive rates as the main motivation behind CMBS issuance. Furthermore, asset quality was found to be the most important factor necessary to obtain a high credit rating supporting the view by Henderson and ING Barings (1997) that assets backing securitisation are its fundamental credit strength. In addition, analyses of the surveys reveal the following: • The choice of which debt funding option to use depends on market conditions. • Credit tranching, over-collateralisation and cross-collateralisation are the main forms of credit enhancement in use. • On average, the AAA note tranche needs to be above AU$100 million and have 60 - 85% subordination for the CMBS issue to be economically viable. • Structuring costs range between 0.1% – 1% of issue size and structuring duration ranges from 4 – 9 months. • Preferred refinancing options are further capital market issues and bank debt. • Pricing CMBSs is greatly influenced by factors in the broader capital markets. For instance, the market had literary shut down as a result of the “credit crunch” caused by the meltdown in the US sub-prime mortgage market. These findings can be useful to issuers as a guide on the cost of going to the bond market to raise capital, which can be useful in comparing with other sources of funds. The findings of this thesis address crucial research priorities of the property industry as CMBSs are seen as a major commercial real estate debt instrument. By looking at how property risk can be assessed and reported in a more systematic way, and investigating quantitative and qualitative factors considered in structuring CMBSs, investor confidence can be increased through the increased body of knowledge. Several published refereed journal articles in Appendix C further validate the stature and significance of this thesis. It is evident that the property research in this thesis can lead aid in the revitalisation of the Australian CMBS market after the “shut down” caused by the melt-down in the US sub-prime mortgage market and can also be used to set up property-backed CMBSs in emerging countries where the CMBS market is immature or non-existent. In addition, analyses of the surveys reveal the following: • The choice of which debt funding option to use depends on market conditions. • Credit tranching, over-collateralisation and cross-collateralisation are the main forms of credit enhancement in use. • On average, the AAA note tranche needs to be above AU$100 million and have 60 - 85% subordination for the CMBS issue to be economically viable. • Structuring costs range between 0.1% – 1% of issue size and structuring duration ranges from 4 – 9 months. • Preferred refinancing options are further capital market issues and bank debt. • Pricing CMBSs is greatly influenced by factors in the broader capital markets. For instance, the market had literary shut down as a result of the “credit crunch” caused by the meltdown in the US sub-prime mortgage market. These findings can be useful to issuers as a guide on the cost of going to the bond market to raise capital, which can be useful in comparing with other sources of funds. The findings of this thesis address crucial research priorities of the property industry as CMBSs are seen as a major commercial real estate debt instrument. By looking at how property risk can be assessed and reported in a more systematic way, and investigating quantitative and qualitative factors considered in structuring CMBSs, investor confidence can be increased through the increased body of knowledge. Several published refereed journal articles in Appendix C further validate the stature and significance of this thesis. It is evident that the property research in this thesis can lead aid in the revitalisation of the Australian CMBS market after the “shut down” caused by the melt-down in the US sub-prime mortgage market and can also be used to set up property-backed CMBSs in emerging countries where the CMBS market is immature or non-existent.

It can be stated that where a valuation is used as an assessment of risk there is no research-backed theory of valuation, that is one that explains the methodology used and is validated by a hypothesis. The significance of this thesis is the recognition of the ignorance, and confusion that exists and the need of a theory to explain methodology verified by a hypothesis or hypotheses. This thesis is the result of systemic research in an attempt to define the confusion that exists, resulting from the application of inappropriate economic theories in valuation. This research also attempts to find the reason for and the source of the confusion. This research supports that which has previously been advocated that valuation principles of valuation Practice must be underpinned by a working theory embedded in positive economics. The finding of this paper is that price theory is an appropriate proxy for valuation theory where a valuation is used as an assessment of the recovery of funds. However importantly this research also recognises and examines the possible ability of other related economic theories to explain areas price behaviour where price theory cannot. The findings of this research are likely to have important implications in the valuation profession. Hopefully this will result in stimulating debate and a realisation of a need for a theory which supports a credible and validated process of valuation.

This Diploma Theses deals with services offered by the domestic estate agencies. They are related to the main activities of an estate agency, which are selling and purchasing real estate. Based on the purposes mentioned above, different means of valuating needs to be applied. A purchaser needs an estimation of a usual market price of the real estate in order to obtain a mortgage loan. A seller needs an expert’s opinion (the administrative price) for quoting the property tax. The Diploma Theses has been divided into two parts. The first part is theoretical and the second is practical. The theoretical part deals with quoting a market price of real estate. I have focused on quoting market prices for the needs of banks to grant loans and credits. Valuating, which has been described in the theoretical part, has been applied on some concrete real estate from 2008 and 2009. The aim of the practical part is to investigate the hypothesis that administrative prices are at the same level with market prices. Based on the generalised results of the investigation from years 2008 and 2009, I have tried to describe some possible development of the prices.

This study investigates the relation between accounting depreciation bias and equity valuation in a unique industry setting, Real Estate Investment Trusts (REITs). REITs report funds from operations (FFO), an industry standardized pro forma performance measure that is computed by excluding the depreciation expense of real properties from GAAP net income. Researchers have examined short-period samples and found inconclusive results on the relative ability of FFO and GAAP net income to explain the market value of equity. This dissertation attempts to explain their results by finding that depreciation expense, the largest reconciling item between FFO and net income, has different biases over the phases of real estate business cycles. This study uses modeling techniques to develop an industry-specific valuation model for REITs. In this model, the difference between the valuation coefficients on FFO and depreciation expense captures accounting depreciation bias and varies over the phases of real estate cycles. This model presents a theoretical link between accounting depreciation bias and the relative ability of FFO versus net income to explain the market value of equity. Using the REIT valuation model, this study empirically examines the impact of real estate cycles on accounting depreciation bias and on the relative ability of FFO and net income to explain the market value of equity. This study finds that FFO explains stock prices better than net income does in a market boom and that there is no significant difference in explanatory power between FFO versus net income in a market bust. Further results indicate that the valuation coefficients on FFO and depreciation expense have opposite sensitivities to a state variable that summarizes information on the real estate cycle phase during a year. These results partially reconcile the mixed results of prior studies across different time periods.

Determinar a viabilidade e a prioridade de investimentos potenciais é um passo crítico para a tomada de decisões no âmbito empresarial. O método mais difundido e aceito mundialmente para análise de projetos é o Fluxo de Caixa Descontado (FCD), onde o valor do projeto é determinado pelo Valor Presente Líquido (VPL). No entanto, o FCD não reflete o valor da ação gerencial, maximizadora de resultados, assumindo implicitamente que a firma detém passivamente seus ativos reais (projetos). Sendo este método, portanto, muito limitado para tratar de incertezas e flexibilidades e levando freqüentemente a decisões equivocadas. Considerado por muitos renomados autores um novo paradigma na avaliação de investimentos, a Teoria de Opções Reais (TOR) veio complementar a teoria do FCD, exercendo um papel de ponte entre a intuição estratégica e o rigor analítico. Este trabalho tem por objetivo não somente apresentar algumas das várias flexibilidades existentes em projetos de incorporação imobiliária, como também mostrar como calcular seu valor de forma simples, intuitiva e adequada aos principais problemas de investimento enfrentados por empresas incorporadoras no seu dia a dia. A abordagem de avaliação de investimentos utilizando a TOR possibilita o entendimento das flexibilidades e incertezas inerentes ao processo de incorporação, auxiliando na elaboração de contratos com terceiros e provendo preciosos insights sobre negócios e investimentos estratégicos cada vez mais importantes devido ao acelerado ritmo de mudança econômica.
In an enterprise scope, one critical step in the decision making process is the determination of potential investments feasibility and priority. Worldwide the most accepted method for evaluating a project is the Discounted Cash Flow (DCF), where the value of the project is given by the Net Present Value (NPV). However, the DCF does not reflect the value of managerial action, which maximizes results, assuming implicitly that the firm manages its real assets (projects) passively. Therefore, this method is too limited to deal with uncertainties and flexibilities and often leads to wrong decisions. Considered by many respected authors as a new paradigm in investment valuation, the Real Options Theory is viewed as a complement to standard DCF analysis which bridges the gap between strategic intuition and analytical rigor. This work aims not only to introduce some of the many flexibilities that exist in real estate development projects, but also to show how to evaluate projects in a simple and intuitive manner suitable for the investment decisions that developers face day by day. The Real Options approach provides the understanding of the flexibilities and uncertainties inherent to the project development process, assisting in contract making with third parties, as well as providing precious insights about businesses and strategic investments, insights that are more important than ever given the rapid pace of economic change.

Problem: Problemet som legat till grund för intresset och inriktningen med denna magisteruppsats är då tidigare kontorsfastigheten Skatteskrapan skulle byta ägare och användningsområde. En planerad ombyggnad ställde till problem med avseende på uppskattningen av ombyggnadskostnader. I slutändan handlar problemet om ett värderingsproblem. Detta problem tillsammans med andra ex-empel där fastigheter bytt användningsområden har väckt ett intresse att göra en ingående undersökning av det svenska fastighetsvärderingsområdet. Denna uppsats är indelad i fem olika delundersökningar. Initialt sker en presentation av svenska metoder för fastighetsvärdering. Vidare under-söks olika faktorer som har olika värdepåverkande effekter på fastighetsvärdet. Därefter genomförs en undersökning av hur nya användningssituationer kan vålla värderingsproblem samt hur ett värde fastställs i en sådan situation. Nästa steg består utav en undersökning av internationella värderingsmetoder. Studien avslutas sedan med en undersökning av nya trender som utvecklats inom fastighetsvärderingen.

Syfte: Syftet med denna magisteruppsats är att studera fenomenet fastighetsvärdering via svenska fastighetsvärderare för att erhålla en förståelse för hur de resonerar vid valet av värderingsmetod och bestämmer det slutliga värdet. Dessutom är syftet också att belysa relationen mellan svenska och internationella värderingsmetoder för att utröna likheter och skillnader.

Metod: Vi har valt en kvalitativ metod i form av åtta intervjuer. En förstudie, i form av en intervju, görs med professor Stellan Lundström, vilken ämnar till att ge en uppdaterad bild av forskningen inom området. Därefter hålls sju intervjuer med auktoriserade fastighetsvärderare. Värderarnas synpunkter analyseras sedan tillsammans med resultat från förstudien, teoretiskt ramverk samt tidigare studier. Analysen är baserad på en modifierad tankemodell som är skapad av forskaren Jan Matts-son. Genom denna modell har sedan fem viktiga nivåer, knutna till uppsatsens problemområde, analyserats.

Slutsats: Vi fann att de svenska värderingsmetoderna i stort sett utgörs av tre olika metoder. Dessa är avkastningsmetod, ortsprismetod samt produktionskostnadsmetod. De viktigaste värdepåverkande faktorerna var fastighetens läge samt dess skick och standard. Även hyreskontrakten och vakanser påverker till stor del. Beslut om ny användningssituation kan tas av olika anledningar. Det största problemet relaterat till denna förändring är uppskattningen av framtida kostnader, där ombyggnadskostnader utgör den största svårigheten. De internationella värderingsmetoderna är överlag de samma som de svenska. Kulturella skillnader föreligger i vilka metoder som används i olika situationer. De viktigaste nya trenderna är effekten av de internationella redovisningsstandarderna. En annan trend är det ökade användandet av automatiska analysverktyg.

Problem: The underlying problem within this Master of Science thesis is the emanating issues from the changed owner and usage situation of the former Tax Department. A planned reconstruction led to difficulties in estimating the reconstruction costs. In the end this problem is an appraisal issue. This problem led to an interest to make a thorough investigation of the area of Swedish real estate appraisal. The thesis is constituted by five different subinvestigations. Initially an exploration is made concerning Swedish real estate appraisal methods. Further, factors affecting the real estate value are examined. This is followed by an investigation of what appraisal issues that might occur in a new usage situation and how the value is estimated in such a situation. The relation between Swedish and International appraisal methods is then illuminated. The final investigation is concerning what new trends that have occurred on the Swedish real estate appraisal market.

Purpose: The purpose of this Master of Science thesis is to study the phenomenon real estate appraisal via Swedish real estate appraisers to gain an understanding of how they reason when choosing appraisal method and determine the real estate value. Additionally, the aim is also to highlight the relation between Swedish and International real estate methods to reveal differences and similarities.

Method: We have chosen a qualitative method taking the form of eight interviews. A total of eight interviews are performed. The study is offset by a pre-study with a professor at RIT, Stellan Lundström. The aim with this interview is to get an updated view of the latest research within real estate appraisal. This is followed by seven interviews with certified real estate appraisers. The results from the interviews with the appraisers are analysed together with the pre-study, theoretical framework and previous studies. The analysing process is based upon a modified thought model, originally developed by the researcher Jan Mattsson. The analysing process is presented in five steps that all are connected to the modified thought model and related to the problem area of this Master of Science thesis.

Conclusion: We found that the Swedish appraisal methods generally are constituted by three methods. These are the avkastnings method, the ortspris method and production cost method. The most influent factors on the real estate value are the location as well as the condition and standard. Also the rent contracts and vacancies to some extent affect the value. A rather large problem originates in the estimation of future costs, where the estimation of reconstruction costs is referred to as the largest issue. The international appraisal methods are equivalent to the Swedish methods. The largest differences are of cultural kind mostly caused by differences in legislation. New trends that are presented are the impact of the international accounting standards (IAS). Another significant trend is the increased use of automatic real estate analysis tools.

In this thesis two dierent problems regarding real options are studied. The rst paper discusses the valuation of a timing option in an irreversible investment when the underlying model is incomplete. It is well known that in a complete model there is no nite optimal time at which to invest if the underlying asset, in our case the value of the developed project, does not pay out any strictly positive cash ows. In an incomplete model, the situation is dierent. Depending on the market price of risk in the model, there could be an optimal nite investment time even though the underlying asset does not pay out any strictly positive cash ows. Several examples of incomplete models are analyzed, and the value of the investment opportunity is calculated in each of them. The second paper concerns the valuation of random start American perpetual options. This type of perpetuate American option has the feature that it can not be exercised until a random time has occured. The reason for studying this type of option is that it provides a way of modelling the initiating of a project, e.g. the optimal time to build on a piece of land, which can not occur until a permit, or some other form of clearance, is given. The random time in the project application represents the time at which the permit is given. Two concrete examples of how to calculate the value of random start options is given.

QC 20160607

Given the nature of the valuation task environment appraisers are often made aware of previous value opinions rendered by appraisers, commonly in the form of an historic appraisal. And, because an appraisal task involves the rendering of market value, a hypothetical, unobservable construct based on probabilities, direct feedback against this objective is typically not possible. Alternate signals derived from the task environment such as confirmation of previous appraised values may be employed, thereby potentially altering the appraiser’s perception of the valuation objective leading to divergence from the normative model. The real estate behavioral literature suggests commercial appraisers have been susceptible to anonymous value opinions of experts, often times resulting in biased valuation judgments. This research is the first to focus on decision support tools as a technique to eliminate systematic biases in the appraisal process. The study focuses on the value opinion of an anonymous expert as a source of potential bias, because the value opinion of an anonymous expert is a common non-sanctioned source of influence representing a clear departure in the normative appraisal process. To operationalize the research hypotheses a two-factor randomized experiment to investigate the stated research hypotheses was conducted.

The main purpose of this study is to develop a predictive model capable to forecast residential real estate prices in the city of Prague using Artificial Intelligence methods. The first part of this study discusses fundamentals of Artificial Neural Networks and Fuzzy Inference Systems in the context of real estate valuation. The second part demonstrates a development and testing of such models using a dataset of real estate market transactions. In the third part, results are compared to Multiple Regression and an explanatory power of each model is evaluated. Conclusions of this research are: (1) Artificial Neural Networks and Fuzzy Inference Systems give more accurate estimates of market values of residential real estates than Multiple Regression; (2) Artificial Neural Networks and Fuzzy Inference Systems represent an efficient way of modeling and analyzing residential real estate prices in Prague.

Recent studies of the valuation of real estate have concentrated on the use of hedonic pricing techniques in which the implicit prices of the component characteristics of an asset are inferred from the observed sale price using regression analysis. All of these studies include as explanatory variables one or more locational factors, such as distance to the central business district, as proxies for the effect that location has on the utility of land. In this research, the explicit consideration of the location of real estate in terms of the geographic or Cartesian coordinates (spatial attributes) of observed sales is shown to be a potential substitute for such proxies, either wholly or in part. Such use of spatial attributes could improve the usefulness of the hedonic methodology while at the same time significantly reducing cost and eliminating sources of error.

El análisis de proyectos inmobiliarios plantea una gran cantidad de retos. La singularidad de las características de cada uno de los tipos de inmuebles significa que una evaluación debe adaptarse cuidadosamente a cada caso. Uno de los aspectos más determinantes es la flexibilidad de gestión de los proyectos inmobiliarios. Su larga duración, su naturaleza sectorial fuertemente cíclica, el importante nivel de inversión requerido y otros aspectos (como la variación de las soluciones técnicas) vinculan su éxito con las habilidades de gestión y las capacidades de los gestores. En la práctica, las opciones disponibles para los gestores constituyen uno de los principales activos de un proyecto. Estas opciones reales aumentan el valor de los proyectos a través de dos efectos. Primero, como lo demuestra la teoría de las opciones reales, es posible asignar un valor objetivo a la flexibilidad, que se agrega al valor del proyecto estimado estrictamente descontando sus flujos de efectivo. En segundo lugar, la presencia de más o menos flexibilidad en el proyecto lo hace más adaptable, reduciendo su riesgo relativo con respecto a proyectos menos flexibles y, en consecuencia, reduciendo el costo de capital requerido por el inversionista. El objetivo de esta tesis es proporcionar una mejor comprensión de ambos aspectos. Respecto al primero, el reto está en adaptar la metodología de opciones reales a casos reales más comunes en el análisis diario de un analista inmobiliario. Más de cuatro décadas después de que los primeros autores describieran métodos para la valoración de opciones reales en proyectos inmobiliarios, la realidad actual es que el valor de las opciones casi siempre se estima de manera intuitiva. Con respecto al segundo aspecto, el efecto sobre el coste de capital, este trabajo se centra en identificar, ordenar, cuantificar e interrelacionar los factores determinantes entre la flexibilidad de la administración y el coste de capital exigido por el inversor. Del análisis actual, se puede inferir que es posible cuantificar el valor de la flexibilidad de un proyecto inmobiliario. Además, este valor es suficientemente significativo para considerarlo, y, conceptualmente, puede provenir de diferentes fuentes. También se puede concluir que en cada proyecto hay factores decisivos para que el inversor decida si invertir o no, dependiendo de la relación entre el rendimiento potencial y la flexibilidad inherente. En ambos aspectos, las habilidades y capacidades del gestor del proyecto son cruciales, ya que es responsable de mejorar la flexibilidad de un proyecto antes y durante su curso.
The analysis of real estate projects poses a great number of challenges. The uniqueness of the characteristics of each of type of real estate means that an assessment must be carefully adapted to each case. One of the most determining aspects is the management flexibility of real estate projects. Their long duration, belonging to a strongly cyclical sector, the important level of investment required and other aspects such as the variation of technical solutions link their success to the management skills and capabilities of managers. In practice, the options available to managers constitute one of the main assets of a project. These real options increase the value of projects through two effects. First, as the theory of real options demonstrates, it is possible to assign an objective value to flexibility, which is added to the value of the project estimated strictly by discounting its cash flows. Second, the presence of more or less flexibility in the project makes it more adaptable, reducing its relative risk with respect to less flexible projects, and consequently reducing the cost of capital required by the investor. The objective of this thesis is to provide a better understanding of both aspects. Regarding the first, the challenge is in adapting the methodology of real options to real cases more common in the daily analysis of a real estate analyst. More than four decades after the first authors described methods for the valuation of real options in real estate, the current reality is that the value of options is almost always still estimated in an intuitive manner. Regarding the second aspect, the effect on the cost of capital, this work focuses on identifying, ordering, quantifying and interrelating the determining factors between management flexibility and the cost of capital required. From the present analysis, it can be inferred that it is possible to quantify the value of the flexibility of a real estate project. Furthermore, this value is sufficiently significant and reliable, and conceptually it can come from different sources. It can also be concluded that in each project there are decisive factors for the investor to decide whether to invest or not, depending on the relationship between the potential return and the inherent flexibility. In both aspects, the skills and capabilities of the manager are crucial, since he is responsible for enhancing the flexibility of a project before and during its course.

Thesis (S.M. in Real Estate Development)--Massachusetts Institute of Technology, Program in Real Estate Development in Conjunction with the Center for Real Estate, 2013.
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 91-94).
The Low Income Housing Tax Credit (LIHTC) program is one of the most successful government subsidy programs for the creation of affordable housing in the history of the United States. Over its 27 year existence, more than two million affordable apartments have been developed or rehabilitated using private equity financing through the sale of federal tax credits. Over the past 12 years the industry has digested the first wave of transactions getting to the end of the 15 year Initial Compliance Period. This is the point at which the Investor Limited Partner (ILP) is able to exit the transaction without tax credit recapture risk with the IRS. There is often a recapitalization event that accompanies the exit, but many times there is not. Since the secondary market for both LP and GP interests both during and after the compliance period is relatively illiquid, it is difficult to discern the fair market value of such an asset. This is further complicated by the unique and multi-layered financing structures common in these transactions and the additional 15-year Extended Use Period requiring the property to remain as affordable housing, in many cases beyond its useful life. This study will use limited partner transaction disposition data provided by a national tax credit syndicator to create a hedonic pricing model to determine the factors that drive valuation at disposition. Using the sample of 223 observations, the characteristics of which closely resemble the population of dispositions industry wide, the resultant hedonic model suggests that a partnership's original total development cost, net operating income (NOI) at disposition, cash or reserve balances on hand at disposition, the strength of the rental market and whether affordability requirements are expiring are the driving forces behind valuation of ILP interests at Year 15. As expected, some common factors that drive valuation in conventionally financed multi-family real estate transactions, including transaction size and regional location, have little predictive impact on valuation as determined by the model. The results of the analysis are contained within, along with the policy implications and some suggested programmatic reforms that could help to enhance the value of LIHTC properties at Year 15 and thus increase the likelihood of long-term financial health and ultimate preservation as Affordable Housing.
by Jakob B. von Trapp.
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. 53-54).
This thesis will apply the past research and methodologies of Real Options to Tower 2 and Tower 3 of the World Trade Center redevelopment project in New York, NY. The qualitative component of the thesis investigates the history behind the stalled development of Towers 2 and 3 and examines a potential contingency that could have mitigated the market risk. The quantitative component builds upon that story and creates a hypothetical Real Options case as a framework for applying and valuing building use flexibility in a large-scale, politically charged, real estate development project. Through this demonstration, it is observed that applying Real Options "in" the World Trade Center Towers 2 and 3 projects minimizes losses in weaker markets and maximizes gains in stronger markets.
by Alberto P. Cailao.
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, 2013.
Cataloged from PDF version of thesis.
The model developed here provides an enhancement of the traditional DCF asset acquisition valuation template, in Excel. It provides a relatively transparent and user-friendly yet flexible risk-adjusted valuation of a subject individual acquisition, structured to consider the asset either as a core asset or a value-add asset. This study applies a basic stock flow model of space market dynamics to address the question of covariance among input variables. The model is designed with optional probabilistic inputs and historical data for the local space market (employment, rents, net rentable area, occupied space, new completions, vacancy and absorption) and the asset market (cap rates history) to produce a 15-year forecast for the relevant space and asset market for the subject property. An optional optimal rent module in the model uses the forecasted cap rates and consequent opportunity cost of capital to arrive at optimal asking rents for the subject property. The existing rent roll is combined with the future rents and vacancies along with asset level projections of operating costs and capital expenditures to arrive at the cash flow projections. Renewal probability and probability to lease up are major differentiating factors between the core and value add asset. The model also enables the user to optionally consider how flexibility in resale timing can improve the overall return performance from a probabilistic perspective. The output of the model includes an apprehension of the entire going-in risk return relationship, depicted relative to a relevant security market line generated by the input risk free interest rate and the opportunity cost of capital in the relevant asset market. Key words: Probabilistic, risk adjusted valuation, forecast, optimal rent, flexibility, renewal probability, probability to lease up.
by Sarwesh Paradkar.
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.
"September 2009." Cataloged from student submitted PDF version of thesis.
Includes bibliographical references (p. 64-65).
In 2009's fragile real estate market, many developers are looking for safe investments for their invested capital. Developers are looking to the federal government, specifically the General Services Administration, for growth and safety. The General Services Administration (GSA) is the contracting body of the U.S. federal government. It is the nation's largest public real estate organization. It leases space from private developers in over 7,100 facilities across the United States comprising office buildings, border patrol stations, courthouses, warehouses, clinics, post offices and many other uses. The GSA pays over $4.6 billion in rent to landlords annually on nearly 181 million square feet of space. GSA is authorized by law to acquire, manage, utilize, and dispose of real property for most federal agencies. The thesis is primarily based on interviews conducted with industry professionals: developers, financiers, brokers, and GSA contracting officials. It looks at the opportunities and challenges of working with the General Services Administration on new lease construction build-to-suits. It focuses on four areas; 1) the lease procurement process; 2) opportunities for new procurements in 2009's market; 3) developer financed new lease construction build-to-suit projects; and 4) opportunities and challenges of financing projects in 2009's credit crunch.
by Nathan R. Boyer.
S.M.

Due to increasing skill and awareness of overall functions in programs such as Excel, an increasing number of analysts at real estate firms and consultancies have started developing "desktop" versions of valuation models used for professional appraisal of property value. Due to personal preferences, differences in schools and professional backgrounds, these so called desktop models vary in quality, robustness, accuracy, design and user friendliness. Professional software suites are not suitable either, as they are expensive, hard to learn, hard to adapt to specific needs of the business, outdated design and need of additional IT resources. At a multinational Real Estate consultancy such as Jones Lang LaSalle, requirements on tools used for professional opinions on questions as important as property value, are rigorous. Therefore, decision was made to develop a new DCF model which would be closely monitored by management and have a prismatic approach meaning that the model would satisfy the needs of more than one division at Jones Lang LaSalle. When reviewing existing models and practices at the company, the result became a tailored DCF valuation model that was focused on increasing efficiency of appraisers at Jones Lang LaSalle. Aside from being robust and technically sophisticated, the result also suited the specific needs of Jones Lang LaSalle in terms of features and user interface. Development of the model involved several divisions to ensure that the needs were met for Research & Valuation, Capital Markets, Corporate Solutions and Asset Management at Jones Lang LaSalle.

This study examines the perceived problem of variances in the assessment of market value of investment real estate in Australia. It concludes that differences in the interpretation of concepts of market value and inconsistencies in valuation approaches exist. A new definition of market value is proposed by the author as a prerequisite step to clarifying the concept of market value. Types of valuation variance are described and classified by the author as systematic and unsystematic variances. Thereafter methodology is postulated to minimise the valuation variance, and practical investment valuation models are described which are based on market studies. The applicability of the models is demonstrated in case studies of major investment properties and the results of evaluations of the models and case studies by valuation practitioners and academics are described in the final section of this study.

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. 149-151).
The thesis aims to address the long lasting phenomena of evolution of financial services industry both in US and Europe. The topic has never been more emphasized since the Great Depression. The dramatic fact of cost cutting and diminishing the headcount in financial services industry creates question if the geographic location has substantial effect in their business activities. This study is conducted to analyze whether there is substantial change in the geographic preference of financial services industry which can result immigration away from the Metropolitan Statistical Areas (MSAs) like Chicago, New York in US and London, Paris in Europe to smaller MSAs. This thesis presents a quantitative model to find out about the historical trends, correlation with other significant variables and significance of the causalities between the variables. Furthermore, the qualitative part of the thesis will try to explain the motivations behind the change and the accelerations and decelerations of the trend at a certain point of time. The thesis examines and tests the hypothesis in two parts, US and Europe with a comparative approach. In the first section of the thesis, the specialization and concentration variables of US will be computed and ranked by taking 1974 as base year in order to observe the evolution since then for each category and subcategory of sectors. The trends of those variables along the time horizon as well as the correlation to other variables are explained for the top 4 and top 10 MSAs. Moreover, the significance of those variables is tested in order to verify the reliability of the results.
(cont.) In the second section, previously selected nine major cities in Europe are selected according to the criteria of availability of continuous data along the time period, level of the finance employment and total employment levels. Although the detailed data related to subcategories of the finance industry were not available, the value added measures of financial industry shed light on productivity measures at each city level. The outcomes of the two studies is compared and contrasted and the reasons of the deviations are investigated. Therefore, the study is also a gateway to project what trends may be expected in the future.
by Pinar Boyar and Onur Celen.
S.M.

Every year a hundreds of new Estate agents is examined, and new agency comes to, which increase the competition for estate agents. Property sellers have the option to choose the estate agent which they think is the best one that will best mediate their property at a flexible and a correct way. It has been common that property sellers choose and compare estate agents in the city, the competition is today equal outside the city as in the city. Possibly, these are other criteria that values higher in the city as outside the city. I wonder therefore what factors are important and crucial in the choice of estate agents in Nacka Municipality. The studies intentions is to give the public a better understanding of which criteria consider to be important when it comes to the choice of estate agents. The study is based on survey examination, made in Nacka municipality, and an interview with a real estate agent working in the Nacka municipality. The theory was based on previous studies in the area but also on the selling decision process and service quality in service. The criteria that were important for sellers was, that the object was advertised on Internet, that the estate agent is well-versed in the district, the estate agent's behavior, that the real estate enterprise is comprehended as reliable and serious and personal chemistry with the estate agent. A top decisive criterion for the choice of estate agents was that the real estate agent was well-versed in the district.
Varje år examineras flera hundra nya mäklare och nya mäklarkontor kommer till, vilket ökar konkurrensen för fastighetsmäklarna. Bostadssäljarna har valmöjligheten att välja den fastighetsmäklare som de tycker är bäst som bäst kommer förmedla deras bostad på ett smidigt och korrekt sätt. Det har varit vanligt med att bostadsäljare väljer och jämför fastighetsmäklare i innerstan, konkurrensen är idag lika stor utanför innerstan. Möjligen rör det sig om andra kriterier man värdesätter högre i innerstan såsom utanför innerstan. Jag frågar mig därför vilka faktorer som är viktiga och avgörande vid valet av fastighetsmäklare i Nacka kommun? Avsikten med studien är att ge allmänheten en ökad kunskap om vilka kriterier bostadssäljare anser vara viktiga när det kommer till val av fastighetsmäklare vid en bostadsförsäljning. Studien baseras på enkätundersökningar, gjorda i Nacka kommun samt intervju med en fastighetsmäklare som arbetar inom Nacka kommun. Teorin grundades på tidigare studier i området men även på säljbeslutsprocessen och servicekvalitet inom tjänsteföretag. De kriterier som var betydande för bostadssäljarna var, Att objektet annonseras på Internet, Att fastighetsmäklaren är väl insatt i området, fastighetsmäklarens beteende, att fastighetsmäklarföretaget uppfattas som pålitliga och seriösa samt personkemi med fastighetsmäklaren. De högst avgörande kriterierna vid valet av fastighetsmäklare var att fastighetsmäklaren var väl insatt i området.

Master’s thesis deals with real estate valuation in Australia. The introductory part deals with the definition of the terms used in the work, for its better understanding. Furthermore, it discusses the development of valuation theory and its relation to economic ideas and various aspects that have influenced its development. The thesis then deals with methods of real estate valuation, their division and specific features. The thesis also discusses the current state of the real estate market on the Australian continent and outlines its possible future development. The experimental section describes the valuation of a particular property in Australia and describes which particular properties affect its cost.

This paper presents the results of a study dealing with a number of issues regarding real estate investment. Utilizing a data set consisting of real estate transactions, questions relative to the impact of certain variables on the sale price are addressed. This analysis addresses the question of the impact of financial, physical, and location characteristics on the sales price of commercial grade real estate.

The first two papers in this dissertation discuss a fairly recently developed research field, Space Syntax, and how the findings in this field may be used to understand spatial economic patterns such as geographic distribution of market rents. Both papers use standard econometric methods to investigate the relationship between rents and the so called integration value developed within Space Syntax. The integration value may be understood as a measure of the accessibility of a certain location in a street network. The measure is constructed using tools from graph theory and uses the shape of the street network as its only input. The papers estimate hedonic models of office and retail leases from central Stockholm to test whether the integration value can help explain rents. A statistically significant effect of integration value on both office and retail rent is found. It appears as if Space Syntax adds important information to the understanding of intraurban rent patterns. Illiquidity is a main feature of most property markets and market participants are therefore directed to property appraisals to obtain information about market values. The reliability of property appraisals is therefore an important research topic. The third paper studies the “rationality” of valuations by testing if capitalisation (cap) rates from individual discounted cash-flow (DCF) valuations are consistent with economic theory. Standard econometrics is used to study the variation in cap rates. For the most part the results support the hypothesis that appraisers are “rational” in the above mentioned sense. Illiquidity of direct property also poses a problem when constructing property price indices.  Lack of price observations and heterogeneity among the few observations available is likely to introduce noise in price indices based on transactions. Valuations are therefore often used instead to construct indices. These indices however suffer from a bias due to so called “appraisal smoothing”. In the fourth paper it is shown that, given certain assumptions, one may filter out noise in a transaction-based price index by regressing it on a valuation-based index (contemporaneous and lagged one period). The procedure may in some circumstances improve pure valuation- or transaction-based indices.
QC 20101201

Appraisers receive feedback from a variety of sources such as other appraisers, clients and the real estate market. Previous studies find client feedback to introduce an upward bias into commercial and residential appraisal judgments. Hansz and Diaz (2001) find that the provision of transaction price (market) feedback for a previously valued property biases commercial appraisers upwardly in subsequent valuations. The authors provide market optimism, client feedback and a reduced conservatism bias as explanations for their findings. However, previous client and market feedback studies were conducted in upward-trending or booming real estate markets. The identified upward bias in valuation judgments may have been the result of positive real estate market conditions. This study investigates the impact of transaction price feedback on residential appraisal judgment in a changed appraisal task environment, characterized by a depressed housing market, market pessimism, conservative lenders and a changed residential appraisal industry. As Hansz and Diaz (2001) find an upward appraisal bias in an upward-trending market, I expect market feedback to introduce a downward bias into residential appraisal judgments in a depressed market. Compared to a “no feedback” control group, residential appraisers receiving the feedback that their previous value estimates were too high, compared to the realized transaction price, are expected to make significantly lower subsequent value judgments for an unrelated property. The “too low” feedback is not expected to have an impact on subsequent value judgments. I test the hypotheses with a controlled experiment using a pre-posttest design. The experimental design has one factor (transaction price feedback) fixed at three different levels (“too low”, “too high”, “no feedback”). A posttest-only validity control group is added to test for a potential testing bias in the pre-posttest design. This study uses residential expert appraisers, defined as active Oregon State certified residential appraisers, from the Portland metropolitan statistical area (MSA) as subjects. Experimental subjects are randomly selected from a list of all certified residential appraisers in the Portland MSA. Experimental subjects are randomly assigned to the control and treatment groups (10 subjects per group; N=40). Subjects in the treatment groups and pre-posttest “no feedback” control group are asked to value a lot of vacant residential land in the geographically unfamiliar Roswell, Georgia. After they provide their value estimates for this first valuation case, subjects in the treatment groups are given a note from a seller’s broker stating the transaction price for the previously valued property. Subjects in the “too high” feedback group receive a transaction price that is 15% below their estimates and subjects in the “too low” feedback group receive a transaction price that is 15% above their value estimates. The control group receives no feedback. All treatment and control groups are then given a second (unrelated) valuation case of vacant residential land in Newnan, Georgia and asked for their value estimate. The experiment is concluded with an exit questionnaire containing demographic and professional questions as well as manipulation checks. The experimental data are analyzed using the parametric independent samples t-test. The assumptions of normality and equal variances are not violated by the dataset. A one-way ANOVA and the non-parametric Mann-Whitney U test are used as robustness checks. All statistical tests conclude that neither the mean of the “too high” feedback group nor the mean of the “too low” feedback group are statistically different at the 5% level from the mean of the “no feedback” control group. Thus, no evidence is found that transaction price feedback biases residential appraisal judgments in a depressed market. The insignificant results are further analyzed to assess whether they are due to a non-reception of the treatment by subjects, low statistical power or a non-existing relationship: The explanation that subjects did not read the treatment note can be excluded. A power analysis reveals low statistical power and very small effect sizes for both treatments. An alternative explanation for the insignificant results is the absence of the hypothesized relationship. The main client group of experimental subjects is appraisal management companies, which due to legislation passed after 2007, work with appraisers on behalf of lenders. As a consequence, residential appraisers do not receive direct client feedback anymore (compared to Hansz and Diaz, 2001) and may not respond subconsciously to the “too high” feedback.

This thesis documents the research that has led to the development of a number of methodologies for combining existing artificial intelligence and statistical techniques into a form appropriate for the development of an intelligent appraisal system for use in the residential property appraisal profession. The methodologies illustrate how regression based appraisal models, previously restricted to homogeneous data, can be applied to heterogeneous data without significant loss in accuracy. The majority of research, previous to this, has addressed this problem by manually selecting homogeneous sub-regions from a heterogeneous parent region. However, the main drawback with this approach is that the segregation of parent regions into sub-regions relies upon a significant amount of a priori knowledge pertaining to the location of the property being valued. The requirement for a commercial residential property appraisal system is one that given sufficient training evidence can automatically learn how to value a property in any region and be able to modify this knowledge over time. Two methodologies are proposed within the thesis to address this requirement. The first, using a technique known as the Kohonen Self Organising Map, makes an assumption that residential properties that share sufficient characteristics can be appraised using the same function The Kohonen Self Organising Map is used to cluster properties with respect to their property characteristics and locational characteristics represented using a mortgage transaction database and UK Census statistics. Aptness of each cluster to define a homogeneous subset suitable to train a regression model, such as multiple regression analysis or a neural network, is estimated using a form of 'nearest neighbour' analysis. The second methodology, improves on the previous by transforming the static 'cluster then observe' solution to a more dynamic one using a Genetic Algorithm to evolve good clusters from those that at first inspection were mediocre. Another issue that has hindered the development of intelligent residential property appraisal systems has been the inability of such models to express their underlying functional form. This is addressed from two perspectives in this thesis: Rules are derived that describe the characteristic make-up of the formed clusters and, alternative modelling techniques are used to generate the final training models that are able to express their functional form as a set of induced rules. The work contained within this thesis demonstrates the feasibility of such an automatic stratification approach. Also, the research illustrates that by observing the characteristics of the generated clusters formed, a useful insight into both the underlying reasoning of the generated models and also of the locational and financial makeup of the subject location can be gained.

Denna studie visar hur valet av metod och värderarens antagande påverkar värderingen av byggrätter. Inledningsvis studeras ett antal faktiska värderingar med avseende på använda metoder och antaganden. Vi finner att fastighetsvärderarna i regel använder ortsprismetoden vid värdering av byggrätter, som komplement används ibland en kalkylbaserad metod. Det visas att fastighetsvärderarens antaganden om framtida bebyggelse i hög grad påverkar värderingen. I mindre utsträckning påverkar valet av värderingsmodell.
In this thesis is presented how the choice of valuation model and the assumptions made by the real estate appraiser affects the valuation of land. By studying a number of valuations we find that the method of choice when valuing land is by a sales comparison method, to complement this method a calculation based model is sometimes used. It is shown that the assumptions made by appraiser to a large degree affect the valuation when using a calculation based model. To a lesser degree the valuation will depend on the choice of valuation model.

Dans la mesure où les environnements économiques et financiers sont régis par de nombreux aléas, la prise de décision en matière d'investissement immobilier s'avère de plus en plus complexe.Le premier chapitre commence par présenter les méthodes traditionnelles d'évaluation des choix d'investissement dans le secteur immobilier. La notion d'option réelle est ensuite introduite au travers du lien entre les options réelles et les options financières. Le deuxième chapitre s'intéresse à différents cas de recours aux options réelles dans le secteur immobilier en faisant systématiquement référence à la littérature qui leur est consacrée. Le troisième chapitre présente des analyses de mesure de la performance et de dynamique des rendements et de volatilité sur les marchés européens et américains
As the economic and financial environments are governed by many uncertainties, decision-making on real estate investments is becoming increasingly complex.The first chapter begins by presenting the traditional methods to value real estate investments. The concept of real options is then introduced through the link between real options and financial options. The second chapter focuses on different use cases of real options in the real estate industry by referring to the literature devoted to them. The third chapter presents a performance measurement analysis and a study of the dynamics of returns and volatility in European and American markets

The main objectives of this diploma thesis are to introduce the building information model as an effective tool, helping at work with the buildings throughout their lifecycle and to consider its use for real estate valuation, from the point of view of individual valuation methods, used in Czech Republic. The real estate valuation methods and the functional principles of building information model, as well as its features, are described in the first part of the thesis. In addition, the first part of the thesis also deals with the model implementation conditions in selected countries of the world. The second part of the document contains consideration for model usage in the valuation practice. A practical demonstration of working with the model is also included in this thesis.

This study applies a process of correlation analysis and hedonic based modelling to investigate the influence of housing attributes and date of sale on transaction prices for residential real estate in the Nelson Mandela Metropole area. Availability of reliable data is a challenge in real estate studies in South Africa. This study integrates several publicly available resources for the purposes of constructing a statistical model. A model is constructed based on a forward variable selection routine using selection criteria. The resulting model shows six highly significant variables that can be used for modelling purposes. The resulting model is used to make comparisons in the value of the geographical location.

Nowadays, as people have higher aspiration for quality of life, the way they value housing no longer looks for provision of fixed structure and physical comfort, but also the pleasure they enjoy from the spatial fixity and the service available in attached with the property. Historically, hedonic pricing model is the most popular way for valuation of housing by modeling the implicit price of attributes comprised in a residential premise. This research, based on the hedonic pricing framework, creatively and skillfully adopts the experimentation method to measure the value property management services in the residential properties in Hong Kong. After a thorough literature on both development of property management as well as the determinants and appraisal of property value, the experiment manipulates the criteria that potential property buyers would consider and simulate the information processing environment for decision making of home purchase, through which the value of property management services is then measured from the users' perspective. The experiment result confirms the importance of property management services, and statistically testifies the hypotheses to reveal the interaction between property management and property value. It finds that property management services in general have contribution to the value of the property being managed, and higher quality of service significantly contributes more. Even for same service quality, the role of property management becomes prominent to inferior grade of residential building, or presents larger impact when the property depreciates over time. Adoptability of experiment methodology is successfully justified. Hedonic regression approach in return examines the setting of the experiment and proves its subsequent result. Experimentation not only provides a powerful way of moving beyond simple questions about "do you think property management is important" or "how important is it" in normal survey, but also makes real time data available rather than analyzing the historical property transaction records in common hedonic modeling. People's appreciation to the intangible management services is well and truly measured from careful experimental arrangement. Such result surely expands the application of hedonic pricing model in measuring the magnitude of an intrinsic attribute, and provides good reference to the property management industry, real estate developers, academic researchers, and the society at large.
published_or_final_version
Housing Management
Master
Master of Housing Management

Desde a onda de abertura de capital ocorrida com o setor de real estate brasileiro entre 2006 e 2007, a discussão em como identificar por meio de informações disponíveis ao público o valor das empresas que compõem esse importante setor se intensificou tanto entre seus gestores como nos analistas do mercado de capitais. Os modelos tradicionais de avaliação de empresas se mostraram inadequados e necessitam de adaptações para serem utilizados em empresas do setor, bem como a identificação e caracterização dos direcionadores de valor. Esta tese tem como objetivo desenvolver uma rotina de avaliação de empresas de Real Estate e sua relação com os direcionadores de valor, intangíveis ou tangíveis, identificando quais são os ativos que possuem maior influência na geração do valor e o porquê dessa influência, possibilitando aos investidores e analistas avaliar melhor o valor de empresas do setor. A partir de uma revisão bibliográfica em conjunto com a análise dos prospectos de abertura de capital e das demonstrações financeiras disponibilizadas ao público, foi proposta uma taxonomia para medir o valor das empresas de real estate em quatro dimensões: capital de propriedade, capital humano, capital de mercado e capital relacional. Em cada dimensão foram mapeados os ativos tangíveis e intangíveis que as formam e estes relacionados à geração de valor por meio de indicadores e benchmarks.
Since the wave of IPO occurred in the Brazilian real estate sector between 2006 and 2007, the discussion on how to identify by disclosure information the fair value of those companies intensified both among its managers and capital market analysts. Traditional valuation models proved inadequate and require adaptations for use in those companies, as well as the identification and characterization of value drivers. This dissertation aims to develop a routine valuation of Real Estate from the drivers of value, tangible or intangible, identifying which are the assets that have greater influence on the value generation and why this influence, enabling investors and analysts to better assess the value of companies in the sector. After a literature review as well as the analysis of the IPO Prospectus and the financial statements available to the public, taxonomy was proposed to measure the value of the real estate companies in four dimensions: property capital, human capital, market capital and relational capital. In each dimension were identified tangible and intangible assets and these related to value generation through indicators and benchmarks.