Index
a
- abandonment
- accounting metrics
- anchoring
- apartments
- assessment
- assessment, prospective and retrospective see also ex‐ante, ex‐post
- autoregression see also real estate prices
- average(s) see also expected value; flaw of averages
b
- backward‐looking analysis see ex‐post
- bar chart
- Bardhaman
- base case
- base plan
- basis point
- benchmark
- Bentall Five
- bias
- delay or start
- pause or continue
- in pro forma
- big data see data
- big picture perspective
- black swan
- bubble
- buildings
- multi‐building project
- types of (as product option),
- business cycles
c
- call option see options
- capex see also capital expenditures, capital improvements
- capital see also cost of capital
- assets
- flows in market
- formation
- improvements
- market
- structure
- capital budgeting
- capital expenditure
- capital improvements
- capitalization rate see cap rate
- cap rate see also yield, cash yield
- actual
- expected (going‐in)
- prevailing
- terminal (going‐out)
- cash flow see also discounted cash flow
- in arrears
- negative
- net
- operating
- positive
- projected
- reversion
- single stream
- cash yield rate
- Center for Real Estate, MIT
- central bank, impact on interest rates
- concavity see internal rate of return
- condominium
- confidence interval, limits, or bounds
- construction
- industry
- starts
- construction costs see also opportunity cost of capital
- dynamics of
- price indices
- contract obligations
- correlation
- cross
- perfect
- positive
- cost of capital see also discount rate, opportunity cost of capital (OCC)
- costs see opportunity cost of capital
- initial
- land
- recurring
- sunk
- timing of
- costs, construction see construction costs
- Court Square
- covariance see also variance
- crystal ball see also software
- cumulative distribution see target curves
- customers
- annual installments
- deposit
- cycles see business cycles, real estate market
- length
- phases of
- cyclicality see also prices
d
- data
- big data
- empirical
- statistical analysis of
- data table
- decision rule
- aggressive developer
- decision
- delay
- discipline
- general
- myopic
- options
- rational
- stop‐gain
- delay see also flexibility types; timing
- start
- delay, phasing
- demand, for real estate
- dependency, economic, physical, or temporal
- design
- flexibility
- developer see also decision rule
- perspective of
- development projects
- capital intensity
- footprint
- multi‐asset
- discounted cash flow (DCF)
- economics of
- model
- discount rate
- choice of
- difference from cost of capital
- difference from internal rate of return
- as mechanical device
- relation to risk
- dispersion see also idiosyncratic drift, idiosyncratic noise, standard deviation
- distributions see also target curves
- cumulative
- frequency
- inputs
- normal
- outcomes
- probability
- sample
- simulation results
- temporal
- transaction prices
- domain see range
- dominance see first order stochastic dominance
- downside
- outcomes
- tail
e
- economic cycles see business cycles
- economic theory
- elasticity
- price
- supply
- emerging markets see markets
- equilibrium price
- evaluation see net present value (NPV), project valuation
- ex‐ante see also assessment
- Excel see also software; spreadsheets
- exercise cost see strike price
- expected return
- expected value
- expenditure
- expenses, operating
- ex‐post see also assessment
- eyeball test
f
- fee simple see ownership
- financial analysis
- financial management
- first order stochastic dominance (FOSD)
- flaw of averages
- flexibility
- adds value
- compared to options
- implications of
- management
- simultaneous forms
- value of
- way to profit from
- flexibility types
- delay
- expansion
- horizontal
- mix
- modular
- start‐delay
- switching
- timing
- vertical
- floor area ratio (FAR)
- forecasts
- often wrong
- forest for the trees
- forward claim
- forward‐looking analysis see ex‐ante
- future amount
- future histories see also outcomes, scenarios, trials
g
- Garden City
- geometric mean see mean
- geometric random walk see random walk
- global financial crisis
- graph see also target curves
- before‐and‐after
- porcupine
- gross income see also income, revenue
- effective
- potential
- growth rate
- income
h
- Harvard University
- Health Care Service Corporation
- highest and best use (HBU)
- high‐rise buildings
- histogram see bar chart
- holding period of property
- housing
- market
- Houston
- hurdle rate
i
- idiosyncratic
- drift
- noise
- risk
- IF statements
- nested
- income
- assumptions about
- current
- effective gross
- net
- operating
- potential gross
- inertia
- infrastructure
- inputs
- assumptions
- differences with outputs
- probability distributions
- insurance see also option types, put option
- fire
- interest rates, risk free
- internal rate of return (IRR) see also discount rate
- achieved (realized, ex post)
- concavity of metric
- going‐in (ex ante)
- as a mechanical device
- intuition
- investment
- performance
- risk
- up front
- investment, return on see return on investment
- investment value see also value
- investors, risk averse
j
- Jensen’s Inequality see flaw of averages
k
- known unknowns
l
- land see also value, land
- bid price for
- as a call option
- costs and price
- implied value
- ownership
- value as residual
- land banking
- landlords
- laptops
- leverage
- financial
- magnifies risks and returns
- operational
- likelihood see also probability distribution
- LOOKUP function
m
- management flexibility
- markets see also real estate markets
- asset
- capital
- emerging
- product
- space
- stock
- market value see value
- mean see also average, expected value
- geometric
- mean‐reversion see also prices
- memoryless see random walk
- metrics see also target curves
- accounting
- investment performance
- IRR
- NPV
- MIT
- mode
- models, general see also discounted cash flow(DCF), simulation model
- analog
- simple version of reality
- modified rate of return see rate of return
- modular development
- modular production
- distinguished from phasing
- timing flexibility
- momentum
- Monte Carlo simulation see simulation
- mortgage
n
- National Council for Real Estate Investment Fiduciaries (NCREIF)
- net present value (NPV)
- negative
- positive
- New York
- normal probability distribution see also probability distribution
o
- occupancy
- opportunity cost
- to delay
- of land
- opportunity cost of capital (OCC) see also discount rate
- compared to IRR
- for construction costs
- definition of
- optimal behavior, assumption of
- optionality
- option analysis, financial see options
- options see also flexibility
- all gain, no pain
- call
- economic
- effects not additive or not
- exercise of
- product mix
- product options
- put
- right without obligation
- timing
- value
- option types see also flexibility types
- defensive
- offensive
- product options
- sequential phase delay
- switching
- timing
- option types, financial
- American, Bermudan, European
- option value see options
- outcomes
- asymmetry
- future
- range of
- simulation of
- uncertain
- upside
- outputs see also inputs
- overtime work
- owner‐occupier
- ownership
- fee simple
- freehold
p
- Parker, David
- parking garage
- Paul McNamara
- payoffs of options, asymmetry of
- Pension Real Estate Association
- periods
- cycle
- holding
- time‐to‐build
- phases
- number of
- parallel
- principles for
- sequential
- vertical
- phasing
- planning permission see zoning
- platform
- porcupine see graph
- post mortem see ex‐post
- present value see also net present value
- breaking symmetry of
- price factor see pricing factors
- price index
- prices see also real estate prices
- asset
- dynamics
- equilibrium
- land
- market
- mean‐reversion
- modeling of
- rental
- resale
- stock market
- transaction
- volatility
- pricing factors
- different
- dynamics of
- private value see value
- probability distribution see also target curves
- bell‐shaped
- continuous
- density
- normal
- quantifying
- range of
- skewed
- production flexibility see also phases
- production schedule see also base plan
- pro forma see also single‐stream
- unbiased
- project valuation
- property value
- prospective analysis see ex‐ante
- put‐call parity
- put options see insurance; options
r
- random number see also simulation
- random walk
- geometric
- memoryless
- range see also probability distribution
- of inputs
- of possible outcomes
- truncated
- rate of return see also internal rate of return
- fair
- modified
- ratio valuation formula
- real estate markets
- autoregression
- inertia
- pricing cycle
- sticky
- real estate prices
- real estate system
- recession
- rental property
- stylized analysis of
- resale of property see also timing
- residual value of land see also value
- retrospective analysis see ex‐post
- return on Investment
- spreads
- revenue
- reversion see also cash flow, mean‐reversion
- reversion value
- risk
- and cyclicality
- difference with uncertainty
- downside
- effect on discount rate
- idiosyncratic
- investment
- measure of
- price of
- and volatility
- risk aversion
- risk‐free interest rate see interest rates, risk free
- risk premium
- risk/return
- rocket scientists
- rule see decision rule
s
- sales
- salvage value see reversion value
- scatterplots
- comparison
- dot cloud
- downward slope
- scenarios see also future histories, trials
- combinations of
- optimistic
- pessimistic
- total number
- scenario analysis
- sensitivity analysis
- sequential phasing delay see delay, phasing
- simulation model
- active
- need to be humble
- outcomes
- passive
- representing multiple options
- single‐family homes
- single‐stream (cash flow pro forma)
- insufficiency of
- skew, of distributions, positive see also target curves
- software
- Crystal Ball
- Excel
- @Risk
- space market see also markets
- spreadsheets
- industry standard
- multi‐asset
- templates
- stabilized property see also rental property
- standard deviation
- statistical analysis see also data
- stochastic dominance
- stochastic dominance, first order
- stochastic process
- stock market prices see prices
- stop‐gain
- example of
- when to use
- stop‐loss
- strike price
- super‐normal gains
- switching option see also option types
t
- tails see also target curves
- downside
- fat
- truncation of
- upside
- target curves see also stochastic dominance
- crossing
- cumulative
- frequency
- left hand
- right hand better
- taxes
- temporal profile
- terminal value see also reversion
- terminal yield rate see yield rate
- time 0
- time horizon
- time T
- timing
- resale
- sales
- start
- stop
- tract housing
- trend‐breaking
- trends
- current
- long‐term
- perceived
- stationary
- trials see also scenario
- how many enough
- trigger value see also decision rule, options
u
- uncertainty see also flexibility, value of
- effect of
- exploration of
- impact of
- modeling (quantifying)
- sources of
- underlying asset
- United Kingdom
- United States
- unknown unknowns see also known unknowns
- upside
v
- vacancy
- allowance
- valuation see also value
- of development projects
- of land
- value see also trigger value
- capitalized
- exchange
- hidden
- investment
- land
- market
- private
- residual
- salvage
- in use
- windfall
- value at risk
- value theory
- Vancouver
- variance see also standard deviation
- vertical phasing see flexibility types; phasing
- volatility see also prices
- longitudinal
w
- what if analysis
- windfall see value
y
- yield
- yield rate see also cap rate
- cash or current
- going‐out or terminal
- income
z
- zero
- zoning
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