Bumping Along the Bottom

Fall/Winter 1992, Vol 17, No 2 Abstract: Changes in the value of real estate are due more to changes in rental rates, vacancy rates and expense items than to changes in capitalization and discount rates. At the same time, it is interesting to note that as 25 Baa-rated securities have declined by over 100 basis points,… Read more

Prices and Appraisals: Where is the Truth?

Fall/Winter 1992, Vol 17, No 2 Abstract: Real estate performance indices – notably the Russell/NCREIF – show income yields below the capitalization rates seen on current acquisitions. Does this mean that the properties are overvalued? Are the property acquisition returns based upon unsustainable, above market rent assumptions? What accounts for the disparity between the indicated portfolio… Read more

  • Default User Image
  • Default User Image
  • Default User Image

The Worldwide Reappraisal of Real Estate Values

Fall/Winter 1992, Vol 17, No 2 Abstract: Yield expectations by global property investors are changing. Unfortunately, elements such as currency exchange ratio differentials and political ‘safety’ have yet to be factored into the fledgling global property investor market. But they will be as the global property market moves from infancy to childhood. And with this move… Read more

  • Default User Image

Rates of Return on Hotel Investments

Fall/Winter 1992, Vol 17, No 2 Abstract: In an industry beset with problems, rates of return on hotel investments are extremely difficult to ascertain. Yet sales transactions involving hotels are in fact occurring, and most transactions are being financed, one way or another. While we believe that current hotel financing terms are ascertainable, we find that… Read more

Normalized Discount Rates Versus Risk-Adjusted Discount Rates

Fall/Winter 1992, Vol 17, No 2 Abstract: While the risk in multi-property portfolios has received much attention, little consideration has been given to the fact that individual, investment-grade properties actually represent a portfolio of leases. Therefore, the risk inherent in any portfolio of leases varies with the composition of the portfolio and how it affects the… Read more

In Search of the Rate

Fall/Winter 1992, Vol 17, No 2 Abstract: The income approach is widely accepted as the most plausible methodology for valuing real property interests. It is founded on the proposition that value is the present worth of anticipated benefits of ownership. Valuation therefore has two major steps: (1) forecasting the benefits of future ownership, usually as cash flows; and (2) discounting these expectations to express their present value. A key... Read More

  • Default User Image