Examination of the rationality of real estate market pricing : focusing on the US office property market
Thesis (S.M.)--Massachusetts Institute of Technology, Program in Real Estate Development in Conjunction with the Center for Real Estate, 2009.
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| Other Authors: | |
| Format: | Thesis |
| Language: | eng |
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Massachusetts Institute of Technology
2010
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| Online Access: | http://hdl.handle.net/1721.1/54856 |
| _version_ | 1826217191189512192 |
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| author | Jeong, Jinbae |
| author2 | William C. Wheaton. |
| author_facet | William C. Wheaton. Jeong, Jinbae |
| author_sort | Jeong, Jinbae |
| collection | MIT |
| description | Thesis (S.M.)--Massachusetts Institute of Technology, Program in Real Estate Development in Conjunction with the Center for Real Estate, 2009. |
| first_indexed | 2024-09-23T16:59:28Z |
| format | Thesis |
| id | mit-1721.1/54856 |
| institution | Massachusetts Institute of Technology |
| language | eng |
| last_indexed | 2024-09-23T16:59:28Z |
| publishDate | 2010 |
| publisher | Massachusetts Institute of Technology |
| record_format | dspace |
| spelling | mit-1721.1/548562019-04-10T12:07:43Z Examination of the rationality of real estate market pricing : focusing on the US office property market Jeong, Jinbae William C. Wheaton. Massachusetts Institute of Technology. Center for Real Estate. Program in Real Estate Development. Massachusetts Institute of Technology. Center for Real Estate. Program in Real Estate Development. Center for Real Estate. Program in Real Estate Development. Thesis (S.M.)--Massachusetts Institute of Technology, Program in Real Estate Development in Conjunction with the Center for Real Estate, 2009. This electronic version was submitted by the student author. The certified thesis is available in the Institute Archives and Special Collections. Cataloged from student submitted PDF version of thesis. Includes bibliographical references (p. 49-50). This study examines whether or not investors behave rationally when they price the U.S. office properties. After reviewing several previous studies on the market efficiency, this paper makes three new attempts: first, we employs the actual information on transactions and rents at the property level to resolve the substitution problems; second, we introduce another pricing method which use gross yields and typical cap rate method; lastly, Shiller Test with those actual data is conducted to determine whether future rental growth can be predicted by both or either of those two pricing methods. The major empirical results can be summarized into the two findings: 1) in the pricing models, the gross yield reflects a property's future rental growth, whereas the cap rate is mostly correlated to the relatively short-term rental growth in the past, 2) in Shiller Test, the future rental growth of a property can be forecasted by the gross yield, not by the cap rate. These findings suggest that although not perfect, investors of the US office properties, at least partially, forecast the future income of the investments, and reflect them into the pricings by means of gross yields rather than cap rates. by Jinbae Jeong. S.M. 2010-05-25T19:20:40Z 2010-05-25T19:20:40Z 2009 2009 Thesis http://hdl.handle.net/1721.1/54856 609651991 eng M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission. http://dspace.mit.edu/handle/1721.1/7582 50 p. application/pdf Massachusetts Institute of Technology |
| spellingShingle | Center for Real Estate. Program in Real Estate Development. Jeong, Jinbae Examination of the rationality of real estate market pricing : focusing on the US office property market |
| title | Examination of the rationality of real estate market pricing : focusing on the US office property market |
| title_full | Examination of the rationality of real estate market pricing : focusing on the US office property market |
| title_fullStr | Examination of the rationality of real estate market pricing : focusing on the US office property market |
| title_full_unstemmed | Examination of the rationality of real estate market pricing : focusing on the US office property market |
| title_short | Examination of the rationality of real estate market pricing : focusing on the US office property market |
| title_sort | examination of the rationality of real estate market pricing focusing on the us office property market |
| topic | Center for Real Estate. Program in Real Estate Development. |
| url | http://hdl.handle.net/1721.1/54856 |
| work_keys_str_mv | AT jeongjinbae examinationoftherationalityofrealestatemarketpricingfocusingontheusofficepropertymarket |