Real Estate Analysis: A Toolkit for Property Analysts

Real Estate Analysis: A Financial Toolkit presents economic and financial models, applications and insights, packaged as a toolkit for analysts and other participants in commercial and residential real estate markets.

Participants in property markets - analysts, brokers, commentators as well as investors and tenants move seamlessly across a range of physical and financial markets. They employ models that illuminate market activity: the tools of supply and demand to explain rental trends and to forecast vacancy rates and construction cycles
forecasts of macro-economists foreshadow shoppers' spending behaviour in shopping malls and the growth in demand for office space
capital market arithmetic to apply discount and capitalisation rates. Currently these topics are scattered through textbooks. This book brings these tools together and situates them in a real estate market context..

Topics addressed include:

• The interaction of markets - capital, space and physical assets
• Debt, the cost of capital and investment hurdle rates
• Real options - valuing lease contracts and land values
• Risk - what counts, what doesn't (systemic and non-systemic risk)
• Discounted rates and capitalisation rates - interpreting spreads to sovereign bond yields
• Externalities - why do markets "fail"
  what are the "solutions"?
• Property rights - different rules, different outcomes
• Exploitation for natural resources (exhaustible, renewable) - how does DCF fit in?
• Cost benefit analysis - the analytics of compensation payments
• Forecasting - purpose and process

This book will complement, sometimes challenge, standard texts in real estate training programs. The target audience is curious professionals and ambitious scholars, seeking insights beyond standard class-room fare.