Flexibility and real estate valuation under uncertainty : a practical guide for developers /
Provides a revolutionary conceptual framework and practical tools to quantify uncertainty and recognize the value of flexibility in real estate development This book takes a practical "engineering" approach to the valuation of options and flexibility in real estate. It presents simple simu...
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| Main Authors: | , |
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| Format: | Electronic eBook |
| Language: | English |
| Published: |
Hoboken, NJ :
John Wiley & Sons, Inc.,
2018.
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| Subjects: | |
| Online Access: | CONNECT |
Table of Contents:
- Intro; Title Page; Copyright Page; Contents; Foreword; Authorsâ#x80;#x99; Preface; Acknowledgments; About the Companion Website; Chapter 1 Discounted Cash Flow Valuation: The Basic Procedures and Concepts Underlying Spreadsheet Valuation Constitute the Springboard to our Approach of Analyzing Flexibility Under Uncertainty; 1.1 Why the Focus on the Discounted Cash Flow Model?; 1.2 Structure of a Discounted Cash Flow Spreadsheet; 1.3 The Cash Flow Projection; 1.4 Discount Rate; 1.5 Market Value and Forward-Looking (Ex-Ante) Analysis; 1.6 Backward-Looking (Ex-Post) Analysis; 1.7 Conclusion.
- Chapter 2 Economics of the Discounted Cash Flow Valuation Model: Understanding the Discount Rate is Critical2.1 Choice of Discount Rate; 2.2 Differences between Discount Rate, Opportunity Cost of Capital, and Internal Rate of Return; 2.3 Net Present Value; 2.4 Relationship between Discount Rate, Growth Rate, and Income Yield; 2.5 Relationship between Discount Rate and Risk; 2.6 Conclusion; Chapter 3 Future Scenarios Matter: We Need to Recognize that Future Projections are Uncertain; 3.1 The Standard Discounted Cash Flow Model Appears to be Deterministic.
- 3.2 We Live in a World of Uncertainty3.3 Discounted Cash Flow Pro Forma Cash Flows Are Expectations; 3.4 Flexibility and Options; 3.5 Conclusion; Chapter 4 Scenario Analysis: Future Scenarios can Significantly and Surprisingly Affect the Present Value; 4.1 Discounted Cash Flow Scenario Analysis; 4.2 Scenarios Affect Value; 4.3 Flexibility Has Value; 4.4 Conclusion; Chapter 5 Future Outcomes Cover a Range of Possibilities: We Can Describe Uncertainties in Real Estate Using Probability Distributions of Possible Future Outcomes; 5.1 Distribution of Future Outcomes.
- 5.2 Quantifying Input Distributions5.3 Distributions of Outcomes Differ from Distributions of Inputs; 5.4 Flaw of Averages; 5.5 Conclusion; Chapter 6 Simulation of Outcomes: Simulation is a Practical, Efficient Way to Explore Uncertainty and to choose between Alternative Strategies for Managing it; 6.1 Generating Scenarios; 6.2 Real Estate Simulation in a Nutshell; 6.3 Simulation Is an Efficient Process; 6.4 Number of Trials; 6.5 Conclusion; Chapter 7 Modeling Price Dynamics: Using Pricing Factors to Model the Dynamics of Real Estate Markets; 7.1 Pricing Factors; 7.2 Random Walks.
- 7.3 Real Estate Pricing Factor Dynamics7.4 Conclusion; Chapter 8 Interpreting Simulation Results: Target Curves and Scatterplots can be used to Graph the Distribution of the Sample Output; 8.1 Target Curves; 8.2 Comparing Target Curves; 8.3 Value at Risk; 8.4 Scatterplots; 8.5 Conclusion; Chapter 9 Resale Timing Decision: Analysis: Letâ#x80;#x99;s See what happens when we apply the Tools of Flexibility Analysis to a Classical Investment Decision: when to sell the Property; 9.1 The Resale Timing Problem; 9.2 Extending the Time Horizon of the Discounted Cash Flow Model; 9.3 IF Statements.
