scholarly journals Commonalities in Private Commercial Real Estate Market Liquidity and Price Index Returns

2021 ◽  
Author(s):  
Dorinth W. van Dijk ◽  
Marc K. Francke
Keyword(s):  
Real Estate ◽  
Capital Markets ◽  
Price Index ◽  
Supply And Demand ◽  
Real Estate Market ◽  
Commercial Real Estate ◽  
Market Liquidity ◽  
Theoretical Simulation ◽  
Operating Income ◽  
The Difference

AbstractWe examine co-movements in private commercial real estate index returns and market liquidity in the US (apartment, office, retail) and for eighteen global cities, using data from Real Capital Analytics over the period 2005–2018. Our measure of market liquidity is based on the difference between supply and demand price indexes. We document for all analyzed markets much stronger commonalities in changes in market liquidity compared to commonalities in real price index returns. We further provide empirical evidence that space markets are less integrated than capital markets by analyzing co-movements in net-operating-income and cap rate spreads (over similar maturity bond yields). In a theoretical simulation model, we show that the strong integration of capital markets compared to space markets, is in fact the reason why market liquidity co-moves so strongly compared to returns. Our results are of interest for large private real estate investors such as pension funds and other institutional investors who are interested in spreading risk. Our findings imply that fully diversified price return benefits may be difficult to obtain, because market liquidity may dry up in all markets simultaneously, which makes portfolio re-balancing more difficult and costly.

scholarly journals DYNAMICS OF REGIONAL RESIDENTIAL REAL ESTATE MARKETS IN UKRAINE

2019 ◽  
Keyword(s):  
Real Estate ◽  
Price Index ◽  
Price Change ◽  
Supply And Demand ◽  
Real Estate Market ◽  
Average Price ◽  
Residential Real Estate ◽  
Real Estate Markets ◽  
Regional Centers ◽  
The Given

The dynamics of the general price index and price index on the primary and secondary residential real estate market (2015–2019) for one-room, two-room and three-room apartments is constructed in the article. The state and tendencies of development of the residential real estate market are considered, which in turn is characterized by: imperfection, problems of uneven development of certain parts of the market, closeness, unreliability and insufficient information about: value, subjects, objects, real supply and demand in the given economic sphere of our country in the conditions of disintegration processes. The regulatory framework by which the control and regulation of this type of market is carried out is not perfect enough. Different scientists, both domestic and foreign, have conducted research and determined a set of factors and methods used in the study of real estate, its assessment, analysis of trends in a certain period of time. A map of Ukraine, containing data on the average price per square meter of housing in all regional centers as of September 2019 is presented and comparative analysis with September 2018 is done; the cities with the largest or smallest price change has occurred are identified. The dynamics of the construction price index (2015–2019) was analyzed; it characterizes the changes and has a significant impact on the final value of real estate in a certain period of time during the construction process, the factors that influence the change of this index are identified. The dynamics of the average price per square meter of residential real estate in different regions of Ukraine is also presented, the factors that determine this dynamics for 2012–2019 were identified – in such cities as Kiev, Lviv, Donetsk, Kharkiv, Odessa, Sevastopol, Simferopol. Psychological factors that influence rise or fall in the value of residential property in selected major cities of Ukraine and in the cities near hostilities (Severodonetsk, Lisichansk) during and after the pre-war period were also identified.

Loss Aversion and Market Liquidity in the Real Estate Market

2014 ◽  
Vol 22 (2) ◽  
pp. 223-249
Author(s):  
Sun Young Park
Keyword(s):  
Real Estate ◽  
Loss Aversion ◽  
Real Estate Market ◽  
Commercial Real Estate ◽  
Market Liquidity ◽  
The Real Estate ◽  
The Real Estate Market ◽  
Expectation Hypothesis ◽  
Property Sales ◽  
The Impact

The most commonly observed risk averse behavior in the commercial real estate market is loss aversion on the part of investors; i.e., investors are more sensitive to prospective losses than to prospective gains. This observation leads to the natural question : Does the market rationally anticipate investors' loss aversion? If not, then does loss aversion become stronger in a relatively illiquid market? The answer to these questions provides strategically important implications to institutional investors. We propose to explore the impact of loss aversion on the commercial real estate market by testing two competing hypotheses : (1) the rational market expectation hypothesis and (2) the liquidity spiral hypothesis. The rational market expectation hypothesis holds that the market rationally anticipates investors' behavioral loss aversion. As a result, the interaction between lagged market liquidity and loss aversion does not have an impact on the probability of property sales. On the other hand, the liquidity spiral hypothesis holds that the interaction between market liquidity and loss aversion has an impact on the probability of property sales due to the self-fulfilling feedback effect between loss aversion and market liquidity. In the context of REITs' property transactions, we find partial evidence for the liquidity spiral hypothesis : private market liquidity and stock market liquidity each has an additional impact on the sale probability of property.

scholarly journals WORLD COMMERCIAL REAL ESTATE MARKET UNDER COVID-19 PANDEMIC: INFLUENCES AND TRENDS

2021 ◽  
Vol 26 (1(86)) ◽  
Author(s):  
Andrei Zara
Keyword(s):  
Real Estate ◽  
World Economy ◽  
Global Financial Crisis ◽  
Supply And Demand ◽  
Real Estate Market ◽  
Commercial Real Estate ◽  
Investment Fund ◽  
Real Estate Industry ◽  
Minimal Impact ◽  
The Impact

The article discusses the characteristic aspects of the trends in the impact of the COVID-19 coronavirus pneumonia pandemic, which has become a unique phenomenon of economic and social development in the global dimension, on the dynamics of the development of the commercial real estate industry in the Western and Ukrainian markets, the differences in the dynamics directions of the commercial real estate market individual segments the after the global financial crisis of 2008-2009, which forced the market to recover at a slow pace and with a simultaneous price and transaction fall, and the pandemic shock of 2020, followed by a general economic recession and an immediate reaction in the form of the prices short-term impact on the commercial real estate assets, but at the same time there was a minimal impact on transaction activity in terms of the market volume of transactions; compares geographically the pandemic impact on the development of the commercial real estate markets main segments, such as the office sector, the hotel sector, the industrial real estate sector, warehouses, data and server centers, through the analysis of real estate investment fund indices, taking into account the research of the survey of the National Association of Realtors USA, analytical and investment real estate agency Real Capital Analytics, reports of the analytical agency FTSE Russell, consulting and auditing companies PricewaterhouseCoopers and Deloitte, consulting and analytical companies in the field of commercial real estate Cushman & Wakefield and Colliers International; demonstrates the change key tendencies in supply and demand factors due to extraordinary steps in the form of a quarantine regime, which in turn stopped the production and sale of most goods/services, and social and corporate activity was transferred to a remote mode in order to keep the population in self-isolation; outlines possible prospects for the development of the commercial real estate industry as an example of one of the most vulnerable world economy sectors in the face of direct opposition to the deterioration of the epidemiological situation, further exit from quarantine and, as a result, the emergence of a corresponding new norm of interpersonal interaction in the B2B and B2C world economy sectors.

Research on Prediction of Urumqi City Real Estate Supply and Demand Based on Gray System

2014 ◽  
Vol 1065-1069 ◽  
pp. 2530-2533
Author(s):  
Bi Lin Shao ◽  
Ting Meng ◽  
Wen Juan Liu
Keyword(s):  
Real Estate ◽  
Supply And Demand ◽  
Real Estate Market ◽  
The Real ◽  
The Real Estate ◽  
Gray System ◽  
Housing Area ◽  
The Real Estate Market ◽  
Market Situation ◽  
The Difference

This paper takes gray prediction forecasting model as a tool to forecast the real estate market in Urumqi from development and investment, construction housing area and sale of housing area. The difference between the actual value and the predicted prediction value is small, with high accuracy. Predictive value can be reflected in the coming period of the real estate market situation in Urumqi. From the predicted results, we could know that there is a lot potential in Urumqi real estate market in next few years and investment in real estate the construction housing area, housing area of real estate sale will get a larger annual growth. In general, there will be increasing potential in the development of the real estate market in Urumqi. Meanwhile, Urumqi real estate market will tend to rationally develop under the regulation of government in the next few years.

Research on the Impact of the Development of E-Commerce in China on the Supply and Demand for Commercial Real Estate on the Basis of Grey System Theory

2014 ◽  
Vol 631-632 ◽  
pp. 1167-1170
Author(s):  
Fan Dong ◽  
Meng Qi Wang
Keyword(s):  
Real Estate ◽  
Supply And Demand ◽  
Real Estate Market ◽  
Commercial Real Estate ◽  
Grey System Theory ◽  
Stable Operation ◽  
Grey System ◽  
The Real Estate ◽  
Balanced Development ◽  
The Impact

At present, most of the researches on impact of e-commerce in china on the supply and demand for commercial real estate are qualitative researches, thus this paper aims to verify the impact of the development of Chinese e-commerce on the supply and demand for commercial real estate through grey relational analysis. In addition, this paper conducted predictive analysis on the supply and demand for commercial real estate in the certain future period by the prediction model GM (1,1), to much more accurately understand the supply and demand for commercial real estate market, produce reasonable expectation about the future demand for commercial real estate market, ensure a balanced development in supply and demand for commercial real estate, as well as achieve healthy and stable operation of the real estate industry and the urban economy.

Analysis of demand for commercial real estate of the Moscow Region

2020 ◽  
pp. 95-101
Author(s):  
Yana I. Katkova
Keyword(s):  
Real Estate ◽  
Financial Market ◽  
Supply And Demand ◽  
Real Estate Market ◽  
Commercial Real Estate ◽  
Moscow Region ◽  
Real Sector ◽  
Demand Side ◽  
Significant Discrepancy ◽  
Investment Returns

The commercial real estate market is a specific and rapidly changing subject for research. Commercial real estate market is connected with the real sector of the economy through consumer demand, and it is connected with the financial market through alternative investment returns. Therefore, this market is actively studied by the Russian and foreign researchers. The most poorly studied issue in this market is its demand side. But the analysis of demand is difficult due to the fact that the buying cycle in the market is very long, and potential buyers are not registered anywhere until the transaction is completed. But the execution of the transaction is not a reflection of demand, as it is the result of negotiations between the seller and the buyer, which may not succeed, as the potential buyer can choose an alternative way of owning property (rent, sublease, co-working) or generating income (bonds, stocks, shares). In this paper, we analyze the demand for commercial real estate in the Moscow region, compare supply and demand in this market, and present a study of the demand for retail, office and industrial-warehouse real estate. We propose a model for pricing commercial real estate. We found a significant discrepancy between supply and demand in the market according in line with their structure, inequality of demand for retail, office and industrial-warehouse premises, the dependence of the price per square meter of real estate to its area (in square footage) and location. The results obtained are consistent with Russian and foreign studies on the analysis of the commercial real estate market. The results of the study may be useful to such players in the commercial real estate market as developers, investors, buyers.

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