It presents simple simulation models built in universal spreadsheet software such as Microsoft Excel. Complementarity with the author's Commercial Real Estate Analysis & Investments-the most-cited real estate investments textbook on the market.įlexibility and Real Estate Valuation under Uncertainty: A Practical Guide for Developers is for everyone studying or concerned with the implementation of large-scale or multi-phase real estate development projects, as well as property investment and valuation more generally. Provides a revolutionary conceptual framework and practical tools to quantify uncertainty and recognize the value of flexibility in real estate developmentThis book takes a practical engineering approach to the valuation of options and flexibility in real estate.An approach relevant for all development projects.Concepts and tools that are simple and accessible to a broad audience of practitioners.Associated web pages provide electronic spreadsheet templates for the models used as examples in the book. An Appendix discusses the technical details of real estate price dynamics. The third level includes more technical details and specific models. On the other hand, the proposed model accounts for two different sources of uncertainty, those are technical and economic risk. It describes the practical tools in detail, taking care to go through the elements of the approach step-by-step for clarity and easy reference. The real options approach enables the possibility of optimally abandon the project before completion whenever the investment cost turns out to be larger than the expected net cash flow stream. Its introductory and concluding chapters present the important “big picture” implications of the analysis for economics and valuation and for project design and investment decision making.Īt a second level, the book presents a framework, a roadmap for the prospective analyst. First, it introduces and explains the concepts underlying the approach at a basic level accessible to non-technical and non-specialized readers. The book thereby aims to significantly improve valuation and investment decision making.įlexibility and Real Estate Valuation under Uncertainty: A Practical Guide for Developers is presented at 3 levels. The text covers new analytic procedures that are valuable for existing properties and enable a new, more profitable perspective on the planning, design, operation, and evaluation of large-scale, multi-phase development projects. These realistically reflect the varying and erratic sources of uncertainty and price dynamics that uniquely characterize real estate. It presents simple simulation models built in universal spreadsheet software such as Microsoft Excel®. This book takes a practical "engineering" approach to the valuation of options and flexibility in real estate. Provides a revolutionary conceptual framework and practical tools to quantify uncertainty and recognize the value of flexibility in real estate development
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