The Impact of Cross-border Real Estate Investment on Commercial Real Estate Capitalisation Rates

The U.S. Congress authorized the creation of real estate investment trusts (REITs) in 1960 so companies could develop publically traded real estate investment portfolios. REITs focus on commercial property, retail property, and rental property. During the last decade, REITs became more active in regional housing markets across the U.S. Single-family rental (SFR) REITs have grown tremendously, buying up residential properties across the country. In some regional housing markets, SFR REITs own noticeable shares of single-family homes. In those settings, SFR REITs take large numbers of housing units off of real estate markets where homeownership transactions occur and manage these properties as part of commercial rental inventories. This has resulted in a new category of multiple property owners, composed of institutional investors as opposed to individual investors, which further exacerbates property wealth concentration and polarization. This study examines the socio–spatial distribution of properties in SFR REIT portfolios to determine if SFR REIT properties tend to cluster in distinct areas. This study will focus on the regional housing market in Nashville, TN. Nashville has one of the most active SFR REIT sectors in the country. County tax assessor records were used to identify SFR REIT properties. These data were joined with U.S. Census data to create a profile of communities. The data were analyzed using SPSS statistical software and GIS software. Our analysis suggests that neighborhoods with clusters of SFR REITs fit the SFR REIT business model. Clusters occur in communities with newer homes, residents with higher levels of educational attainment, and middle to upper-middle incomes. The paper concludes with several recommendations for future research on SFR REITs.

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The Impact of the Financial-Economic Crisis on Real Estate Investment Funds

Gazdaság és Társadalom ◽

10.21637/gt.2011.00.05. ◽

2011 ◽

Vol 2011 (Különszám) ◽

pp. 85-102

Author(s):

Éva Borszéki ◽

Klaudia Végh

Keyword(s):

Real Estate ◽

Economic Crisis ◽

Financial Economic ◽

Real Estate Investment ◽

Investment Funds ◽

The Impact

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Cap rates and risk: a spatial analysis of commercial real estate

Studies in Economics and Finance ◽

10.1108/sef-11-2016-0267 ◽

2018 ◽

Vol 35 (1) ◽

pp. 25-43

Author(s):

Florian Unbehaun ◽

Franz Fuerst

Keyword(s):

Real Estate ◽

Risk Perceptions ◽

Large Scale ◽

Risk Premia ◽

Real Estate Market ◽

Commercial Real Estate ◽

Data Series ◽

Large Set ◽

Content Type ◽

The Impact

Purpose This study aims to assess the impact of location on capitalization rates and risk premia. Design/methodology/approach Using a transaction-based data series for the five largest office markets in Germany from 2005 to 2015, regression analysis is performed to account for a large set of asset-level drivers such as location, age and size and time-varying macro-level drivers. Findings Location is found to be a key determinant of cap rates and risk premia. CBD locations are found to attract lower cap rates and lower risk premia in three of the five largest markets in Germany. Interestingly, this effect is not found in the non-CBD locations of these markets, suggesting that the lower perceived risk associated with these large markets is restricted to a relatively small area within these markets that are reputed to be safe investments. Research limitations/implications The findings imply that investors view properties in peripheral urban locations as imperfect substitutes for CBD properties. Further analysis also shows that these risk premia are not uniformly applied across real estate asset types. The CBD risk effect is particularly pronounced for office and retail assets, apparently considered “prime” investments within the central locations. Originality/value This is one of the first empirical studies of the risk implications of peripheral commercial real estate locations. It is also one of the first large-scale cap rate analyses of the German commercial real estate market. The results demonstrate that risk perceptions of investors have a distinct spatial dimension.

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Does the commercial real estate industry need “more pussy on the block?”

Property Management ◽

10.1108/pm-03-2019-0017 ◽

2019 ◽

Vol 37 (5) ◽

pp. 627-637 ◽

Cited By ~ 1

Author(s):

Dustin C. Read

Keyword(s):

Real Estate ◽

Gender Bias ◽

Second Generation ◽

Commercial Real Estate ◽

Real Estate Industry ◽

Structured Interviews ◽

Content Type ◽

Local Chapter ◽

Professional Credibility ◽

The Impact

Purpose In a controversial 2018 interview, commercial real estate mogul Sam Zell insinuated that companies should promote their employees based exclusively on merit and avoid purposefully taking steps to get “more pussy on the block” in the name of gender equality. The comment was criticized not only for its crassness, but also for its failure to recognize the challenges many women working in the commercial real estate industry face in their efforts to obtain the same opportunities, compensation and status as similarly-qualified men. In an effort to overcome these disparities, the purpose of this paper is to focus on the pervasiveness of second-generation gender bias and stereotyping in the field through a qualitative analysis. Design/methodology/approach Semi-structured interviews were conducted with 39 women serving as local chapter presidents of a prominent commercial real estate trade group to explore the impact of gender on their career advancement and their experiences with second-generation gender bias. Findings The findings suggest unintentional discrimination often influences women’s careers by drawing their communication skills, professional credibility and commitment to the organizations for whom they work into question. Originality/value The research contributes to the existing literature by offering additional evidence that unintentional discrimination is common in male-dominated industries, such as commercial real estate. It also provides clear examples of social cues women perceive to heighten tension along gender lines and impinge upon their ability to ascend to leadership positions.

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