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The Effect Of A Rise In Interest Rates On Hotel Capitalization Rates, John B. Corgel 2016 Cornell University School of Hotel Administration

The Effect Of A Rise In Interest Rates On Hotel Capitalization Rates, John B. Corgel

Center for Hospitality Research Publications

Capitalization rates for all commercial real estate are affected by changes in the general level of interest rates. Hotel capitalization rates should respond more quickly to interest rate changes than those of other property types because hotels do not experience the “lease friction” found in other commercial properties, with their lengthy leases. This analysis estimates the statistical connection between interest rate changes and cap rates. Holding other important factors constant, the model estimates that at current levels a 100-basis-point increase in the 10-year U.S. Treasury rate will produce a 28-basis-point uptick in hotel capitalization rates. Continuing improvement in the ...


The Impact Of Publicly Owned Hotels On Competing Properties, Robert R. Nelson, Jan A. deRoos, Andrey D. Ukhov 2016 University of Delaware, Newark

The Impact Of Publicly Owned Hotels On Competing Properties, Robert R. Nelson, Jan A. Deroos, Andrey D. Ukhov

Articles and Chapters

Substantial public subsidies, and even outright public ownership, of hotels have become common in the United States as communities target tourism as an integral economic development tool. A critical question that is increasingly being raised about the public sector entering the hotel business is, are these government-funded facilities unfair competition to properties developed by the private sector? The common reply to these concerns is that the publicly owned hotel is critical to growing demand for lodging accommodation and that once it opens, the new hotel will attract enough new business that all hotels will benefit. We use an event study ...


Third Quarter 2016: Hotels Exhibit Positive Momentum, Crocker H. Liu, Adam D. Nowak, Robert M. White Jr. 2016 Cornell University School of Hotel Administration

Third Quarter 2016: Hotels Exhibit Positive Momentum, Crocker H. Liu, Adam D. Nowak, Robert M. White Jr.

Cornell Real Estate Market Indices

Our Standardized Unexpected Price (SUP) metric showed an uptick in the price of large hotels during the third quarter of 2016, with a continued decline in the price of small hotels. Although debt and equity financing for hotels were still relatively inexpensive during this quarter, we remain concerned that the increasing relative riskiness of hotels compared to other commercial real estate suggests that lenders will eventually start to tighten hotel lending standards if this trend continues. Our early warning indicators continue to suggest an eventual downward trend in large hotel prices. This is report number 20 of the index series.


The Consequences Of Reit Index Membership For Return Patterns, Andrey Pavlov, Eva Steiner, Susan Wachter 2016 Simon Fraser University

The Consequences Of Reit Index Membership For Return Patterns, Andrey Pavlov, Eva Steiner, Susan Wachter

Eva Steiner

We study the impact of S&P index membership on REIT stock returns. Given the hybrid nature of REITs, their returns may become more like those of other indexed stocks and less like those of their underlying properties. The existing literature does not offer clear predictions on these potential outcomes. Taking advantage of the inclusion of REITs in major S&P indexes starting in 2001, we find that shared index membership significantly increases the correlation between REIT returns after controlling for the stock characteristics that determine index membership. We also document that index membership enhances the link between REIT stock ...


Leverage, Volatile Future Earnings Growth And Expected Stock Returns, Jamie Alcock, Eva Steiner, Kelvin Jui Keng Tan 2016 University of Sydney

Leverage, Volatile Future Earnings Growth And Expected Stock Returns, Jamie Alcock, Eva Steiner, Kelvin Jui Keng Tan

Eva Steiner

We provide theory and evidence to complement Choi's [RFS, 2013] important new insights on the returns to equity in `value' firms. We show that higher future earnings growth ameliorates the value-reducing effect of leverage and, because the market for earnings is incomplete, reduces the earnings-risk sensitivity of the default option. Ceteris paribus, a levered firm with low (high) earnings growth is more sensitive to the first (second) of these effects thus generating higher (lower) expected returns. We demonstrate this by modeling equity as an Asian-style call option on net earnings and find significant empirical support for our hypotheses.


The Consequences Of Reit Index Membership For Return Patterns, Andrey Pavlov, Eva Steiner, Susan Wachter 2016 Simon Fraser University

The Consequences Of Reit Index Membership For Return Patterns, Andrey Pavlov, Eva Steiner, Susan Wachter

Eva Steiner

We study the impact of S&P index membership on REIT stock returns. Given the hybrid nature of REITs, their returns may become more like those of other indexed stocks and less like those of their underlying properties. The existing literature does not offer clear predictions on these potential outcomes. Taking advantage of the inclusion of REITs in major S&P indexes starting in 2001, we find that shared index membership significantly increases the correlation between REIT returns after controlling for the stock characteristics that determine index membership. We also document that index membership enhances the link between REIT stock ...


Reit Capital Structure Choices: Preparation Matters, Andrey Pavlov, Eva Steiner, Susan Wachter 2016 Simon Fraser University

Reit Capital Structure Choices: Preparation Matters, Andrey Pavlov, Eva Steiner, Susan Wachter

Eva Steiner

Sun, Titman, and Twite (2015) find that capital structure risks, namely high leverage and a high share of short-term debt, reduced the cumulative total return of US REITs in the 2007-2009 financial crisis. We find that mitigating capital structure risks ahead of the crisis by reducing leverage and extending debt maturity in 2006, was associated with a significantly higher cumulative total return 2007-2009, after controlling for the levels of those variables at the start of the financial crisis. We further identify two systematic cross-sectional differences between those REITs that reduced capital structure risks prior to the financial crisis and those ...


On The Capital Structure Of Real Estate Firms, Jamie Alcock, Eva Steiner, Kelvin Jui Keng Tan 2016 University of Cambridge

On The Capital Structure Of Real Estate Firms, Jamie Alcock, Eva Steiner, Kelvin Jui Keng Tan

Eva Steiner

The leverage and debt maturity choices of real estate companies are interdependent, and are not made separately as is often assumed in the literature. We use three-stage least squares (3SLS) regression analysis to explore this interdependence for a sample of listed U.S. real estate companies and Real Estate Investment Trusts (REITs) traded between 1973 and 2006.We find substantial differences in the nature of the relationship between leverage and maturity for the two firm types. Leverage is a determinant of maturity for non-REITs, whereas maturity is a determinant of leverage for REITs. We also find that the drivers of ...


Leverage, Volatile Future Earnings Growth And Expected Stock Returns, Jamie Alcock, Eva Steiner, Kelvin Jui Keng Tan 2016 University of Sydney

Leverage, Volatile Future Earnings Growth And Expected Stock Returns, Jamie Alcock, Eva Steiner, Kelvin Jui Keng Tan

Eva Steiner

We provide theory and evidence to complement Choi's [RFS, 2013] important new insights on the returns to equity in `value' firms. We show that higher future earnings growth ameliorates the value-reducing effect of leverage and, because the market for earnings is incomplete, reduces the earnings-risk sensitivity of the default option. Ceteris paribus, a levered firm with low (high) earnings growth is more sensitive to the first (second) of these effects thus generating higher (lower) expected returns. We demonstrate this by modeling equity as an Asian-style call option on net earnings and find significant empirical support for our hypotheses.


Future Earnings Growth Volatility And The Value Premium, Jamie Alcock, Eva Steiner, Kelvin Jui Keng Tan 2016 University of Sydney

Future Earnings Growth Volatility And The Value Premium, Jamie Alcock, Eva Steiner, Kelvin Jui Keng Tan

Eva Steiner

The value premium is well established in empirical asset pricing, but to date there is little understanding as to its fundamental drivers. We use a stochastic earnings valuation model to establish a direct link between the volatility of future earnings growth and firm value. We illustrate that risky earnings growth affects growth and value firms differently. We provide empirical evidence that the volatility of future earnings growth is a significant determinant of the value premium. Using data on individual firms and characteristic-sorted test portfolios, we also find that earnings growth volatility is significant in explaining the cross-sectional variation of stock ...


The Consequences Of Reit Index Membership For Return Patterns, Andrey Pavlov, Eva Steiner, Susan Wachter 2016 Simon Fraser University

The Consequences Of Reit Index Membership For Return Patterns, Andrey Pavlov, Eva Steiner, Susan Wachter

Working Papers

We study the impact of S&P index membership on REIT stock returns. Given the hybrid nature of REITs, their returns may become more like those of other indexed stocks and less like those of their underlying properties. The existing literature does not offer clear predictions on these potential outcomes. Taking advantage of the inclusion of REITs in major S&P indexes starting in 2001, we find that shared index membership significantly increases the correlation between REIT returns after controlling for the stock characteristics that determine index membership. We also document that index membership enhances the link between REIT stock ...


Surveying Labour Market Trends: A Demand And Supply Analysis Of The Quantity Surveying Profession In Ireland, Roisin Murphy 2016 Dublin Institute of Technology

Surveying Labour Market Trends: A Demand And Supply Analysis Of The Quantity Surveying Profession In Ireland, Roisin Murphy

Conference papers

The construction and property sectors in Ireland have undergone significant change over the past decade. From a period of sustained growth in output and employment to a recession returning to the current period of expansion. While the cyclical nature of the sector and consequential impact on the labour market is widely recognized, the impact on the quantity surveying profession specifically is comparatively less well evidenced. A widespread survey of employers was undertaken to ascertain recent employment trends and likely future demand for quantity surveyors. At the same time an analysis of current enrolments on surveying programmes across the country provided ...


How Mortgage Fraud Helped Facilitate The 2008 Housing Crisis, Darlene B. Freeman 2016 La Salle University

How Mortgage Fraud Helped Facilitate The 2008 Housing Crisis, Darlene B. Freeman

Economic Crime Forensics Capstones

There has been much debate about what caused the housing meltdown that occurred from 2008 through 2010. One aspect that has not been debated; mortgage fraud was at the center of this historically difficult time in our nation’s history, and played a major role in causing millions of homes to go into foreclosure. For this Capstone Project, I will analyze the devastation mortgage fraud caused in the lives of people that were displaced from their homes, workers that lost their jobs and the continued devastation that still remains due to a shrinking housing market. I will also examine the ...


"Use" Valuation Under The 1976 Tax Reform Act: Problems And Implications, Michael D. Boehlje, Neil E. Harl 2016 Iowa State University

"Use" Valuation Under The 1976 Tax Reform Act: Problems And Implications, Michael D. Boehlje, Neil E. Harl

Neil Harl

With the rapid rise in farmland*values during recent years, farmers and farm organizations have argued that land values have little relationship to agricultural productivity. The fact that farmers have been the dominant purchasers in the farm real estate market during this period of time would seem to discredit this argument to some degree, but public officials have been sympathetic to the farmers' arguments. Some state legislatures, particularly in areas o f the country where urban expansion has placed upward pressures on land values, have adopted procedures to value farmland based on its agricultural productivity for purposes of assessing property ...


Hotval Toolkit, Crocker H. Liu 2016 Cornell University School of Hotel Administration

Hotval Toolkit, Crocker H. Liu

Center for Real Estate and Finance Tools

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Scroll down to "Additional Files" to access the calculator.

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HOTVal is a hotel valuation spreadsheet based on a regression model discussed in the Center for Real Estate and Finance at Cornell called Cornell Hotel Indices: Second Quarter 2012: The Trend is Our Friend by Crocker H. Liu, Adam D. Nowak, and Robert M. White, Jr. The model which will be continually updated, provides a rough estimation of the value of a hotel property once the user inputs information on whether the hotel is a large or small hotel, the year and quarter of the valuation, the state where the property ...


Second Quarter 2016: Slowdown For Large Hotels Continues; Small Hotels Have Now Slowed As Well, Crocker H. Liu, Adam D. Nowak, Robert M. White Jr. 2016 Cornell University School of Hotel Administration

Second Quarter 2016: Slowdown For Large Hotels Continues; Small Hotels Have Now Slowed As Well, Crocker H. Liu, Adam D. Nowak, Robert M. White Jr.

Cornell Real Estate Market Indices

Our Standardized Unexpected Price (SUP) metric continues to show a decline in the price of large hotels, and now also the price of small hotels has eased—even though hotel transaction volume has increased. Although debt and equity financing for hotels remain relatively inexpensive, we are concerned that the total volatility of hotel returns is greater relative to the return volatility for other commercial real estate. If this trend continues, lenders will eventually start to tighten hotel lending standards. Our early warning indicators all continue to suggest that the downward trend in hotel prices should continue into the next quarter ...


Union Park, Naiop Workshop Project, Kristina Benson, Tyler DuBois, Chad Encinas, Mackenzie Kisiel, Colin Kelley, Andrew Lords, Daniel Silvey, Deb Scott, Joseph Welliver 2016 Portland State University

Union Park, Naiop Workshop Project, Kristina Benson, Tyler Dubois, Chad Encinas, Mackenzie Kisiel, Colin Kelley, Andrew Lords, Daniel Silvey, Deb Scott, Joseph Welliver

Real Estate Development Workshop Projects

The following report is our development proposal for the 14-acre site currently owned by the US Postal Service, as well as several surrounding properties owned by PDC including Union Station. Our plan builds off of the 2015 Broadway Corridor Framework Plan, produced by the Portland Development Commission (PDC). The report is intended to provide the PDC with inspiration and lay the groundwork for a future public master plan.


Cover, Cornell Real Estate Review Editorial Board 2016 Cornell Univesity

Cover, Cornell Real Estate Review Editorial Board

Cornell Real Estate Review

No abstract provided.


Table Of Contents, Cornell Real Estate Review Editorial Board 2016 Cornell University

Table Of Contents, Cornell Real Estate Review Editorial Board

Cornell Real Estate Review

No abstract provided.


Letter From The Editors, Jason Henderson, Matthew Green, Jason Spencer 2016 Cornell University

Letter From The Editors, Jason Henderson, Matthew Green, Jason Spencer

Cornell Real Estate Review

[Excerpt] The Editorial Team is proud to release this 2016 14th Annual Volume of the Cornell Real Estate Review. This year’s issue explores a wide range of topics, including the deployment of new technologies in multifamily properties, the effects of autonomous vehicles on real estate, and the continued ramifications of the housing crisis through the legal tactics of certain mortgage lenders. Also included, a recent repositioning project– the unique turnaround of a former casino hotel property in Reno, Nevada. Furthermore, this release includes a discussion of value-added multifamily investment strategy, an analysis of the impact of rapid transit on ...


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