Showing papers in "International Journal of Strategic Property Management in 2015"
TL;DR: This research aimed at presenting new hybrid framework for glasshouse locating based on two MCDM methods which can be used to properly locate an economically justifiable glasshouse in both governmental and private levels.
Abstract: Glasshouse is a kind of greenhouse that is larger than prevalent greenhouses. Glasshouses may have wide various applications and totally, is more applicable than greenhouse. One important point about glasshouse that should be considered is selecting a good location. Besides, finding a suitable location for this purpose is so hard because establishing a glasshouse needs a large area. Financial justification which is a major issue in glasshouse Investments highlights the importance of its locating. This research is based on strategic property management perspectives and its results can be used to properly locate an economically justifiable glasshouse in both governmental and private levels. There are some other important criteria affects on this issue. This research aimed at presenting new hybrid framework for glasshouse locating based on two MCDM methods. SWARA and COPRAS are applied in this research for glasshouse locating. This methodology for the first time is applied in a research. SWARA is app...
52 citations
TL;DR: In this paper, the authors proposed a framework that adds value to the way that key determinants of housing sales and time-on-the-market (TOM) are identified.
Abstract: Price and residential housing attributes have long been identified as key determinants of home sales and, as such, they can explain time-on-the-market (TOM). It is acknowledged, however, that there are other factors (or determinants) that influence home sales and TOM, which are of great importance but seldom taken into account in the appraisal process of residential real estate. Based on the use of fuzzy cognitive mapping, we propose a framework that adds value to the way that key determinants of housing sales and TOM are identified. This framework is the result of a process involving several residential real estate experts (i.e. appraisers and realtors), and follows a constructivist approach. Our findings suggest that the use of fuzzy cognitive maps (FCMs) allows the number of omitted determinants to be reduced and the understanding of the relationships between them to be improved. The strengths and weaknesses of our methodological framework are also discussed.
42 citations
TL;DR: In this paper, the authors focused on a proposed valuation method including real estate market cycle analysis in real estate valuation process, which includes in the traditional Dividend Discount Model more than one g-factor in order to plot property market cycle.
Abstract: This paper is focused on a proposed valuation method including real estate market cycle analysis in real estate valuation process. Starting from early works on this field (d'Amato 2003) the work highlight the dangerous gap between academic research on property market cycles and professional practice of property valuation. The danger of this gap comes from the fact that in spite it is well documented that the property market has a “natural” cyclical behaviour, the opinions of value based on income approaches still relies on assumption of a stable or perpetually growing (or decreasing) income. This may be one generating factors of the real estate bubble and the subsequent financial markets crisis experienced recently. This paper offers a general introduction on cyclical capitalization as a further family of valuation methodologies based on income approach. This method includes in the traditional Dividend Discount Model more than one g-factor in order to plot property market cycle. An empirical appli...
41 citations
TL;DR: A case study of an existing retirement village 10 kms from Brisbane CBD was conducted involving a series of interviews with the village managers and residents together with documents relating to the village's operations and activities as mentioned in this paper.
Abstract: Retirement villages are regarded as a viable accommodation option for the ever increasing ageing population in Australia. This paper aims to identify sustainability features and practices adopted in retirement villages and associated benefits to improve the life quality of older people. A case study of an existing retirement village 10 kms from Brisbane CBD was conducted involving a series of interviews with the village managers and residents together with documents relating to the village's operations and activities. The environmentally friendly features that were incorporated into the development mainly include green design for the site and floor plan and waste management in daily operation. More importantly, a variety of facilities are provided to strengthen the social engagement and interactions among the residents. Additionally, different daily services are provided to assist independent living and improve the health conditions of residents. Also, the relatively low vacancy rate in this villa...
40 citations
TL;DR: In this article, a multiple criteria decision support system for calculation of residential rents is proposed, integrating cognitive maps and the measuring attractiveness by a categorical based evaluation technique (MACBETH), which aims to introduce simplicity and transparency in the decision making framework.
Abstract: The real estate sector has been negatively affected by the recent economic recession, which has forced structural changes that impact property value and price. Recent pressures have also motivated reduced liquidity and access to credit, causing a drop in property sales and, thus, boosting the rental housing market. It is worth noting, however, that the rental housing segment is not with-out difficulties and complexity, namely in terms of legislation and rental value revaluation. In light of this reasoning, this study aims to develop a multiple criteria decision support system for calculation of residential rents. By integrating cognitive maps and the measuring attractiveness by a categorical based evaluation technique (MACBETH), we also aim to introduce simplicity and transparency in the decision making framework. The practical implications, advantages and shortfalls of our proposal are also analyzed.
30 citations
TL;DR: In this paper, the impact of socio-economic factors on technical efficiency in the Spanish construction sector before and after the start of the current financial crisis was examined, and the results showed that technical efficiency is very low and is significantly lower after the beginning of the financial crisis than before.
Abstract: This paper estimates technical efficiency in the Spanish construction sector before and after the start of the current financial crisis, and examines the impact of socio-economic factors on technical efficiency. Bias-corrected efficiency measures are obtained using Data Envelopment Analysis with bootstrap for a sample of medium-sized and large construction firms over the period 2000–2010. Next, bias-corrected efficiency scores are regressed on the variables explaining efficiency using bootstrap truncated regression. The results show that technical efficiency is very low and is significantly lower after the beginning of the financial crisis than before. Firms with the highest technical efficiency scores have the lowest input-ratio for material and employee costs to output and the highest for fixed assets. The examination of the determinants of technical efficiency indicates that efficiency is higher for firms that export, are highly leveraged, are integrated in the form of joint stock company, and ...
25 citations
TL;DR: In this article, the integrated use of cognitive mapping with the Analytic Hierarchy Process (AHP) can give rise to a conceptually coherent and empirically valid framework to calculate time-on-the-market (TOM) indices in the residential real estate market.
Abstract: Residential real estate assumes crucial importance in a country's socioeconomic development. It is an important field of study, and much work has gone into better understanding the sector and the factors determining sales within it, such as time-on-the-market (TOM). TOM can be influenced by a variety of elements; a fact that in effect raises a lot of issues, because these determinants are often interpreted in an ambiguous or unstructured way. This study aims to bring greater accuracy and structure to our understanding of these factors, by showing that the integrated use of cognitive mapping with the Analytic Hierarchy Process (AHP) can give rise to a conceptually coherent and empirically valid framework to calculate TOM indices in the residential real estate market. Because it takes into account both tangible and intangible characteristics of a house, this measurement framework also boosts strategic planning support and allows for more informed business planning, which we believe can be a real con...
24 citations
TL;DR: In this paper, an integrated evaluation instrument that combines the objective and subjective evaluation of the quality indices of suburban residential environment is proposed to identify subjective and objective indices of the residential environment and develop the previous conceptual model of subjectively and objectively integrated quality indices used for the assessment of the suburban residential envi...
Abstract: The development of suburban residential areas influences the increasingly growing disparities between residential areas of a local municipal network. Real positive indicator values of settlements are usually used by planners to characterise the residential quality of a suburban settlement and to decide on its future development. These values frequently differ from choices made by urban residents on living under conditions of such interpretive suburban residential quality. It is the essence of spontaneous development in suburbs. This article aims to devise an integrated evaluation instrument that combines the objective and subjective evaluation of the quality indices of suburban residential environment. It introduces the following topics: (1) the identification of subjective and objective indices of the suburban residential environment; (2) development of the previous conceptual model of subjectively and objectively integrated quality indices used for the assessment of the suburban residential envi...
21 citations
TL;DR: This research is based on field data collected via a survey of the state of deterioration of in-service buildings, allowing a more rational management of the maintenance of buildings, converted into economic and performance gains.
Abstract: Service life prediction assumes a primary role as it allows a more rational use of construction elements. This constitutes a useful tool in the definition of preventive maintenance plans providing an increase in performance. The main objective of this research is the development of a statistical methodology for the service life prediction of external painted surfaces. This research is based on field data collected via a survey of the state of deterioration of in-service buildings. The degradation is defined by a number of factors that together contribute to the deterioration of painted surfaces thus ending their service life. In this study a mathematical model was defined using a multiple linear regression analysis and this enables the coating's deterioration over time to be expressed as a function of various degradation factors. 220 painted coatings were inspected in 160 buildings of varying construction types. Analytical tools were devised to monitor the performance of paint coatings on walls an...
21 citations
TL;DR: In this paper, the authors investigated the long-run and short-term dynamics of 351 US metropolitan statistical area housing prices in relation to personal income and found that changes in personal income can predict house price movements and vice versa.
Abstract: This paper investigates the long-run and short-term dynamics of 351 US metropolitan statistical area housing prices in relation to personal income. We apply a panel cointegration approach on annual data from 1993 to 2011 and find a long-run relationship between local house prices and per capita personal income. The causal direction is then assessed based on an autoregressive distributed lag specification that also accommodates for error-correction. Results from Granger-causality tests reveal the existence of a bi-directional causality between real house prices and real per capita personal income over both long and short-horizons. Our results continue to be robust, when our bivariate system is extended to include additional MSA-level (employment and population) and national-level variables (real stock price and mortgage interest rate). We conclude that changes in personal income can predict house price movements and vice versa.
18 citations
TL;DR: In this paper, the authors explore the correlations between monetary liquidity and house price bubbles in the U.S. housing market and find a significant correlation between the formation of housing bubbles and monetary supplies.
Abstract: Extant studies indicate that the excessive easing of monetary supplies can result in surplus liquidity, which can consequently facilitate the formation of asset bubbles. This study references data on house prices in the U.S. from January 1991 to August 2012 to explore the correlations between monetary liquidity and house price bubbles in the U.S. housing market. Fluctuations in house prices are classified as related to either fundamentals (the mean reversion behavior and responses to information of the current period) or bubbles (self-related behavior). Results show a significant correlation between the formation of housing bubbles and monetary supplies. Long-term easing of monetary supplies can cause housing marketing returns to deviate from fundamentals, which then results in an increase in continuous fluctuations in house prices and the likelihood of the formation of house price bubbles.
TL;DR: In this paper, a multi-criteria decision making method (MCDM) was employed to analyse the relative importance of the main factors chosen by the main sectors of tenants at top grade office buildings in Kuala Lumpur city centre.
Abstract: In order to mitigate the anticipated oversupply of office space, it is necessary to gauge the preference of office occupiers, namely tenants of purpose built office buildings, since these tenants form the indicator of demand for space. In this study, a multi-criteria decision making method (MCDM) – the Analytic Hierarchy Process (AHP) procedure was employed to analyse the relative importance of the main factors chosen by the main sectors of tenants at top grade office buildings in Kuala Lumpur city centre. This study had identified the elicitation of experts’ opinion and tenants’ selection comprises twenty-six important factors for office occupation in Kuala Lumpur city centre, grouped under four main categories: Location, Lease, Building and Financial/Cost. This study then employed AHP to assess the relative importance placed on each category, revealing the varying patterns of preferences when tested on tenants from three main business sectors occupying top grade office buildings. The findings showed that, between the three sectors (Finance/Banking, ICT & Media and Oil & Gas), differences in preference were only slight for most factors but were significant for a few. The findings from this study are insightful in informing decisions on future office provision, particularly in the context of working towards satisfying office tenants’ requirements.
TL;DR: The authors investigated the major impacts of the 2008 Global Financial Crisis (GFC) on the Australian construction industry and in particular how Australian construction contractors responded to the economic downturn and found that construction companies, particularly the large ones, are expecting some difficult financial times over the next few years and are taking actions to minimize the upcoming adverse impacts.
Abstract: The Global Financial Crisis (GFC) in 2008 had a significant impact on the world economy and the construction industry was no exception. This study investigates the major impacts of the 2008 GFC on the Australian construction industry and, in particular how the Australian construction contractors responded to the economic downturn. A total of 35 senior managers from the Top 100 Australian construction companies were interviewed. The findings indicate that construction companies, particularly the large ones were not affected in any significant way but are expecting some difficult financial times over the next few years and are taking actions to minimize the upcoming adverse impacts. The most common strategy adopted by Australian construction contractors is to concentrate on core business while avoiding aimless bidding. Similarly, great focus is placed on retaining human resources in order to maintain the skill set so that the company can respond quickly when market conditions improves. The research ...
TL;DR: In this article, the authors examined the dynamics of return and dynamic volatility across the Malaysian and pan-Asian countries' listed property companies market over the period January 1998 to August 2012.
Abstract: This paper examines the dynamics of return and dynamic volatility across the Malaysian and pan-Asian countries’ listed property companies market over the period January 1998 to August 2012. Listed property companies’ portfolios have the potential to offer high returns and low risks for long-term investments for individuals as well as institutional investors. As such, it is important to assess the return and volatility level of the Malaysian listed property companies market in the dynamic region of pan-Asian countries. This paper uses ARCH and GARCH models to empirically examine the dynamic volatility of listed property companies in 12 pan-Asian countries. The findings revealed that for the past 14-years Malaysia experienced moderately high volatility levels in term of investment in listed property companies. This study will contribute significantly to the empirical literature on the volatility dynamics of the Malaysian property market in international real estate portfolios. In particular, the findings from the study will be useful for international investors to better understand the potential portfolio implications of investing in the Malaysian real estate market.
TL;DR: In this paper, the authors present the results of the analysis of Vilnius district commercial-industrial zones and propose a theoretical model for investment strategy selection to identify the possibilities of investment attractiveness and the principle of the investment option with the system of characterizing indicators for development.
Abstract: The article presents the results of the analysis of Vilnius district commercial-industrial zones. The criteria of analysis are: geographic location, plots and/or groups of plots in the area, operating and planning activities of companies as well as the infrastructure and transport communications development at the engineering level. A theoretical model for investment strategy selection is introduced to identify the possibilities of investment attractiveness. The principle of the investment option with the system of characterizing indicators for development is offered to reflect the lack of cohesion between practical investment promotion and sustainable development of the territories’ indicators.
TL;DR: In this paper, the authors evaluated the short and medium term effects of M&As on acquirers' economic performance with a set of 32 M&A cases occurring during 2000-2011 in China.
Abstract: Real estate developers in China are using mergers and acquisitions (M&As) to ensure their survival and competitiveness. However, no suitable method is yet available to assess whether such M&As provide enhanced value for those involved. Using a hybrid method of data envelopment analysis (DEA) and Malmquist total factor productivity (TFP) indices, this paper evaluates the short and medium term effects of M&As on acquirers’ economic performance with a set of 32 M&A cases occurring during 2000–2011 in China. The results of the analysis show that M&As generally have a positive effect on acquirers’ economic performance. Acquisitions on average experienced a steady growth in developer Malmquist TFP, a more progressive adoption of technology immediately after acquisition, a slight short-term decrease in technical efficiency after acquisition but followed by a marked increase in the longer term once the integration and synergy benefits were realised. However, there is no evidence to show whether developers achieved any short or long term scale efficiency improvements after M&A. The findings of this study provide useful insights on developer M&A performance from an efficiency and productivity perspective.
TL;DR: In this paper, the authors present the current state of critical backlog maintenance within the National Health Service (NHS) in England through the statistical analyses of 115 Acute NHS Trusts and find empirical support for a causal relationship between building portfolio age and year-on-year increases in critical backlog.
Abstract: NHS Trusts in England must adopt appropriate levels of continued investment in routine and backlog maintenance if they are to ensure critical backlog does not accumulate. This paper presents the current state of critical backlog maintenance within the National Health Service (NHS) in England through the statistical analyses of 115 Acute NHS Trusts. It aims to find empirical support for a causal relationship between building portfolio age and year-on-year increases in critical backlog. It makes recommendations for the use of building portfolio age in strategic asset management. The current trend across this sample of NHS Trusts may be typical of the whole NHS built asset portfolio and suggests that most Trusts need to invest between 0.5 and 1.5 per cent of income (depending upon current critical backlog levels and Trust age profile) to simply maintain critical backlog levels. More robust analytics for building age, condition and risk-adjusted backlog maintenance are required.
TL;DR: In this paper, the authors examined the rationale behind building owners' unwillingness to adopt adequate risk mitigation measures with a view to improve current stakeholders' practices in earthquake risk mitigation and provided insights into the causal agents and stakeholder practices that pose challenges to property owners' mitigation decisions.
Abstract: Enhancing building owners’ earthquake risk preparedness has been a major challenge in many seismically active regions. Many property owners are found unwilling to adopt adequate risk mitigation measures in their earthquake-prone buildings, despite the availability of various technical design solutions and the enactment of intervening legislative frameworks necessary to facilitate successful earthquake risk preparedness. This paper examined the rationale behind building owners’ unwillingness to adopt adequate mitigation measures with a view to improve current stakeholders’ practices in earthquake risk mitigation. Using a mixed-method approach, comprising both qualitative and quantitative methods, an examination of the decision-making process and different stakeholders involved in earthquake risk mitigation and the property market, provided insights into the causal agents and stakeholder practices that pose challenges to property owners’ mitigation decisions. Stake-holder practices acting as impedim...
TL;DR: In this paper, a cluster analysis is carried out to identify whether identifiable clusters of housing attributes exist on the basis of neighborhoods, and a Multiple Discriminant Analysis (MDA) is applied to investigate the differences between clusters, and to understand which housing attributes contribute most to submarket separation.
Abstract: This study aims to investigate housing market differentiation, drawing upon the results of case studies of the Cankaya and Yenimahalle districts that adopt a set of statistical techniques. As a first step, a cluster analysis is carried out to identify whether identifiable clusters of housing attributes exist on the basis of neighborhoods. Next, a Multiple Discriminant Analysis (MDA) is applied to investigate the differences between clusters, and to understand which housing attributes contribute most to submarket separation. Finally, a hedonic price analysis is conducted for each cluster and for the overall market to identify price differences in the housing market. The results of the study support the hypothesis that the housing market is segmented in Yenimahalle and Cankaya, and that location is the main determining factor in this segmented structure of different house values. The study also reveals that within this segmented structure, each cluster has its own dynamics, and that the price format...
TL;DR: The authors empirically tested the contagion effects in stock and real estate investment trust (REIT) markets during the subprime mortgage crisis by using daily stock and REIT-markets data from the following countries and international bodies: the United States, the European Union, Japan, Hong Kong, Singapore, Australia, and the global REIT market.
Abstract: This study empirically tests the contagion effects in stock and real estate investment trust (REIT) markets during the subprime mortgage crisis by using daily stock- and REIT-markets data from the following countries and international bodies: the United States, the European Union, Japan, Hong Kong, Singapore, Australia, and the global REIT market. We found a significant and positive dynamic conditional correlation (DCC) coefficient between stock returns and REIT returns. The results revealed that the REIT markets responded early to market shocks and that the variances were higher in the post-crisis period than in the pre-crisis period. Evidence supporting the contagion effects includes increases in the means of the DCC coefficients during the post-crisis period. The Japanese and Australian REIT markets possess the lowest time-varying downside systematic risks. We also demonstrated that the “DCC E-beta” captures more significant downside linkages between market portfolios and expected REIT returns ...
TL;DR: In this article, the authors study the persistence and reversion patterns of housing price growth by computing variance ratios applying Kim's (2006) Wild bootstrapping and using finnish data for the period 1987-2010.
Abstract: We study the persistence and reversion patterns of housing price growth by computing variance ratios applying Kim's (2006) Wild bootstrapping and using finnish data for the period 1987–2010. The momentum effect in housing price growth is found to be long-lasting and substantially greater in size than the eventual reversion. The results indicate that high-order autocorrelations are important concerning the long-horizon attractiveness of housing investments and that housing is a notably riskier asset in the long term than suggested by conventional portfolio analysis. The analysis further shows that the dynamics vary across regional housing markets and across dwelling types. The findings have important implications for investors, credit institutions, and policy makers.
TL;DR: Wang et al. as discussed by the authors considered the preferences of the decision-makers in land bidding decisions with the multi-attribute additive utility and reference point method in cumulative prospect theory, and proposed three land auction models based on the appearance time of the land auctions.
Abstract: Land auction is widely practiced in company and government decisions, especially in China. Bidders are always faced with two or more auctions in the period of a decision cycle. The outcome of the auction is under high risk. The bidder's risk attitude and preference will have a great influence on his/her bidding price. Prospect theory is currently the main descriptive theory of decision under risk. In this paper, we will consider the preferences of the decision-makers in land bidding decisions with the multi-attribute additive utility and reference point method in cumulative prospect theory. Three land auction models are proposed based on the appearance time of the land auctions. The simultaneous model uses cumulative prospect theory without considering the relationships between the auctions. The time sequential model involves the exchange auction decisions at different time with the third-generation prospect theory. The event sequential model further considers the reference point prediction in seq...
TL;DR: In this article, the determinants of demand for construction in Australia using an econometric approach to identify and evaluate economic indicators that affect construction demand were derived and the forecasting contribution of different determinants and their categories to the demand for constructing new homes was further estimated.
Abstract: Economic variation and its effects on construction demand have received a great deal of attention in construction economics studies. An understanding of future trends in demand for construction could influence investment strategies for a variety of parties, including construction developers, suppliers, property investors and financial institutions. This paper derives the determinants of demand for construction in Australia using an econometric approach to identify and evaluate economic indicators that affect construction demand. The forecasting contribution of different determinants of economic indicators and their categories to the demand for construction are further estimated. The results of this empirical study suggest that changes in consumer's expectation, income and production, and demography and labour force are closely correlated with the movement of construction demand; and 14 economic indicators are identified as the determinants for construction demand. It was found that the changes in ...
TL;DR: In this paper, a company performance self-assessment (CoPSA) model using a parametric approach is proposed and tested using the likert scale and a three-equation two-step recursive model.
Abstract: Company performance self-assessment (CoPSA), whose fundamental purpose is to provide a check-and-balance mechanism for practice performance through progress-and-performance self-assessment (PaPSa) is yet to be in place in the facilities management industry. Specially needed by facilities service outsourcing firms (FSOFs), CoPSA benefits the top management from organizational introspection of company's own performance. This paper proposes and tests a CoPSA model using a parametric approach. Managers’ perceptions about service delivery performance of their firm are measured using the likert scale and then deduced into a three-equation two-step recursive model. From a total of 207 randomly chosen Malaysian outsourcing firms, sixty responses were obtained. The results indicate that more than half of the sampled managers have envisioned high performance delivery, with 80% achievement as their goal. However, this has not been adequately supported by a coherent firm's internal structure. In view of the finding, the study concludes that the service delivery strategy of small fSofs in Malaysia is perceived to be rather passive.
TL;DR: In this article, a systematic analysis of affordable housing development and its pricing structure is undertaken for the city of Shenzhen, where a Grey model, which requires a limited amount of data to reflect unknown behavior, is constructed.
Abstract: As a result of urban housing reform in China, it has become increasingly difficult for low and middle income families to purchase a house. In response to the growing demand for affordable housing, the Chinese Government has developed a specific housing policy to enable families to purchase properties from the private sector. The pricing mechanism of such housing is completely based on the family affordability and the profit margin of developers. To ensure the provision of housing for low and middle-income families, the future trend of affordable housing prices has become a concern for developers, consumers and may adversely influence the implementation of the current national housing policy. In this paper a systematic analysis of affordable housing development and its pricing structure is undertaken for the city of Shenzhen. As information pertaining to the factors influencing house prices is imperfect, a Grey model, which requires a limited amount of data to reflect unknown behavior, is construct...
TL;DR: In this paper, the authors put the factors that could define the choice structure of households by focusing on two different-size cities in Turkey: the Istanbul Metropolitan Area (IMA), where the housing choice is expected to dependent upon economic behavior of households, and Bandirma (BND), a medium-size city, where the house market is relatively weaker and the choice structures are expected to be dependent upon the limited opportunities of supply.
Abstract: The distribution pattern of housing in any urban area will be extremely diverse and heterogeneous. The shape of this pattern depends on intrinsic properties of the housing units themselves as well as on accessibility, environmental quality and the capacity and quality of previously constructed housing stock. How do households make their choices and distribute themselves among such diverse housing areas? The aim of this investigation is to put the factors that could define the choice structure of households by focusing on two different-size cities in Turkey: the Istanbul Metropolitan Area (IMA), where the housing choice is expected to dependent upon economic behavior of households, and Bandirma (BND), a medium-size city, where the housing market is relatively weaker and the choice structure is expected to dependent upon the limited opportunities of supply. The investigation results show that households’ socio-economic characteristics dominate the choice structure in the IMA parallel to the expectat...
TL;DR: In this article, tax inequities in assessed values and how these inequities affect house price indices using assessed values statistics were investigated using rating valuation data from the top 10 cities of New Zealand during the period 1994-2009.
Abstract: This paper investigates tax inequities in assessed values and how these inequities in tax assessments affect house price indices using assessed values statistics. Using the unique rating valuation data from the top 10 cities of New Zealand during the period 1994–2009, it finds that house price measurements using the Sale Price Appraisal Ratio (SPAR) method have performed well compared to the repeated sales method suggested by Case and Shiller (1989) and the assessed values (AV) method proposed by Clapp and Giaccotto (1992). The presence of systematic estimated errors (both vertical and horizontal inequities) in assessed values posts a concern for house price measurements using assessed values statistics. In this situation, both the SPAR and AV methods benefit from the law of compensation of errors by using all transaction data. A policy implication is that the SPAR model is a good choice when using assessed values to measure house price movements at frequent time intervals, in particular for small...
TL;DR: In this paper, an extension to Grenadier's (1996), who emphasizes rational investment decisions possibly leading to oversupply in real estate markets, by further allowing for the important implication of irrational expectation for the strategic interaction amongst competing investors.
Abstract: The recent sluggish recovery in the U.S. house market has further motivated our research interests in overbuilding in real estate markets. Our model is an extension to Grenadier's (1996), who emphasizes rational investment decisions possibly leading to oversupply in real estate markets, by further allowing for the important implication of irrational expectation for the strategic interaction amongst competing investors. In this model, two market participants are asymmetric because one of them is allowed to have heterogeneous expectations about the growth and volatility of demand shocks. Unlike most of previous studies that only simply think of this phenomenon as a result of irrationality, our model further finds that irrational investors’ value-maximizing investment choices matter in understanding the strategic interaction of investment decisions in real estate markets, therefore providing additional insights into overbuilding and other puzzling phenomena in real estate markets.
TL;DR: In this paper, the authors investigate the design of contracts and covenants in buyout deals and conclude that well-designed covenants can appropriately align all participants' diversified interests.
Abstract: A buyout deal involves several parties, including private equity firms, the target company, and lending banks. All these parties are legally connected by contractual arrangements, and covenants among all interest parties are important. However, a comprehensive study on designing covenants among parties in a buyout deal to achieve commitment and avoid risk in closing a deal is seldom seen in current literature. By investigating one of the world's largest buyout deals – the acquisition of Hospital Corporation of America (HCA), this paper not only probes into the design of contracts and covenant, but also provides several managerial implications. This paper concludes that well-designed covenants in buy-out deals can appropriately align all participants’ diversified interests.
TL;DR: Li et al. as mentioned in this paper investigated the economic value added (EVA) of 18 major Chinese property companies from 2006 to 2012 and found that on average, the mainland property companies experienced a negative EVA during the period 2006-2012.
Abstract: This study investigates the economic value added (EVA) of 18 major Chinese property companies from 2006 to 2012. We categorize the companies in two ways: 1) companies concentrating on property vs multi-functional companies and 2) state-owned enterprises (SOEs) vs privately-owned enterprises (POEs). We find that on average, the mainland property companies experienced a negative EVA during the period 2006–2012. This is due to the companies undertaking long-term projects, and the companies do not recognize capital gain from property appreciation as income. Hence the EVA of the companies is, in fact, understated. The results also reveal that POEs outperform SOEs in terms of EVA. This reflects the inefficiency of SOEs. This research has two important implications to investors. Firstly, besides looking at the EVA of the companies, investors should also understand the nature of businesses of the companies thoroughly. Secondly, investors investing in emerging markets like China should have a thorough unde...