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LEADER 00000cam a2200865Mi 4500
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049 INap
082 04 333.332
082 04 333.332|223
099 Ebook O'Reilly for Public Libraries
100 1 Geltner, David,|d1951-|eauthor.
245 10 Flexibility and real estate valuation under uncertainty :
|ba practical guide for developers /|cDavid Geltner,
Richard de Neufville.|h[O'Reilly electronic resource]
250 1st.
264 1 Chichester :|bWiley Blackwell,|c2018.
300 1 online resource
336 text|btxt|2rdacontent
337 computer|bc|2rdamedia
338 online resource|bcr|2rdacarrier
500 Foreword xiii Author's Preface xvii Acknowledgement xxi
About the Companion Website xxiii 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 1.1
Why the Focus on the Discounted Cash Flow Model? 2 1.2
Structure of a Discounted Cash Flow Spreadsheet 3 1.3 The
Cash Flow Projection 5 1.4 Discount Rate 7 1.5 Market
Value and Forward?]Looking (Ex?]Ante) Analysis 7 1.6
Backward?] Looking (Ex?]Post) Analysis 9 1.7 Conclusion 9
2 Economics of the Discounted Cash Flow Valuation Model:
Understanding the Discount Rate is Critical 11 2.1 Choice
of Discount Rate 11 2.2 Differences between Discount Rate,
Opportunity Cost of Capital,
500 And Internal Rate of Return 13 2.3 Net Present Value 14
2.4 Relationship between Discount Rate, Growth Rate,
500 And Income Yield 15 2.5 Relationship between Discount Rate
and Risk 18 2.6 Conclusion 19 3 Future Scenarios Matter:
We Need to Recognize that Future Projections are Uncertain
21 3.1 The Standard Discounted Cash Flow Model Appears to
be Deterministic 21 3.2 We Live in a World of Uncertainty
23 3.3 Discounted Cash Flow Pro Forma Cash Flows Are
Expectations 24 3.4 Flexibility and Options 26 3.5
Conclusion 26 4 Scenario Analysis: Future Scenarios can
Significantly and Surprisingly Affect the Present Value 27
4.1 Discounted Cash Flow Scenario Analysis 27 4.2
Scenarios Affect Value 29 4.3 Flexibility Has Value 30 4.4
Conclusion 32 5 Future Outcomes Cover a Range of
Possibilities: We Can Describe Uncertainties in Real
Estate Using Probability Distributions of Possible Future
Outcomes 33 5.1 Distribution of Future Outcomes 34 5.2
Quantifying Input.
500 Distributions 34 5.3 Distributions of Outcomes Differ from
Distributions of Inputs 38 5.4 Flaw of Averages 39 5.5
Conclusion 40 6 Simulation of Outcomes: Simulation is a
Practical,
500 Efficient Way to Explore Uncertainty and to choose between
Alternative Strategies for Managing it 41 6.1 Generating
Scenarios 41 6.2 Real Estate Simulation in a Nutshell 42
6.3 Simulation Is an Efficient Process 43 6.4 Number of
Trials 44 6.5 Conclusion 45 7 Modeling Price Dynamics:
Using Pricing Factors to Model the Dynamics of Real Estate
Markets 47 7.1 Pricing Factors 47 7.2 Random Walks 49 7.3
Real Estate Pricing Factor Dynamics 51 7.4 Conclusion 52 8
Interpreting Simulation Results: Target Curves and
Scatterplots can be used to Graph the Distribution of the
Sample Output 53 8.1 Target Curves 53 8.2 Comparing Target
Curves 57 8.3 Value at Risk 57 8.4 Scatterplots 57 8.5
Conclusion 59 9 Resale Timing Decision: Analysis: Let's
See what happens when we apply the Tools of Flexibility
Analysis to a Classical Investment Decision: when to.
500 Sell the Property 61 9.1 The Resale Timing Problem 62 9.2
Extending the Time Horizon of the Discounted Cash Flow
Model 62 9.3 IF Statements 63 9.4 Trigger Value for
Stop?]Gain Rule 64 9.5 Value of Example Stop?]Gain Rule 64
9.6 Conclusion 68 10 Resale Timing Decision: Discussion:
Let's think about Additional Insights we can get from
Simulation 69 10.1 Sensitivity Analysis 69 10.2 When to
Use the Stop?]Gain Rule 70 10.3 Implications of
Flexibility for Property Valuation 71 10.4 Conclusion 72
11 Development Project Valuation: This Chapter Looks at
Valuation of Development Projects From an Investment
Perspective, Considering Uncertainty, Flexibility,
500 And Time?]to?]Build 73 11.1 Time?]to?]Build Difference
between Development Projects and Existing Assets 74 11.2
Lower Opportunity Cost of Capital for Construction Costs
75 11.3 Illustrative Example 77 11.4 Residual Value of
Development Land 78 11.5 Investment Risk in Development
Project 79 11.6 Conclusion 80 12 Basic Flexibility in
Development Projects: The Most Basic Flexibility in Real
Estate Development is the Option to Choose whether and
when to Build 83 12.1 Review of Call (and Put) Options 84
12.2 Land as a Call Option on Development 85 12.3 Drivers
of Option Value 85 12.4 A Practical Example of a Call (and
Put) Option 86 12.5 Flexibility and Scenario Analysis for
Development Projects 88 12.6 Conclusion 90 13 Option
Dichotomies: We Introduce a Typology of Flexibility in
Development Projects 91 13.1 Three Dichotomies for
Thinking Generally about.
500 Development Options 91 13.2 Defensive versus Offensive
Options 92 13.3 Options "On" and "In" Projects 93 13.4
Timing Options versus Product Options 94 13.5 Conclusion
94 14 Product Options in Development: We Discuss Three
types of Product Options 95 14.1 Concept of Base Plan 95
14.2 Product Expansion Flexibility 96 14.3 Product Mix
Flexibility 98 14.4 Conclusion 98 15 Timing Options in
Development: Now we Turn to the Types of Timing Options 99
15.1 Project Start?]Timing Flexibility (The Delay Option)
99 15.2 Project Production Timing Flexibility 100 15.3
Modular Production Timing Flexibility 102 15.4 Phasing
Timing Flexibility 103 15.5 Types of Phasing 103 15.6
Recognizing Defensive and Offensive Options in Simulation
Results 104 15.7 Conclusion 107 16 Garden City: An Example
Multi?]Asset Development Project: We Present the
Traditional.
500 DCF Valuation Spreadsheet Model for the Example
Development Project We use in the Rest of Book 109 16.1
Overview of Multi?]Asset Development Project 110 16.2
Structure of a Realistic Multi?]Asset Spreadsheet Pro
Forma 111 16.3 Cash Flows for the Example Pro Forma 113
16.4 Temporal Profile for Base Case 115 16.5 Expected
Economics of the Garden City Project 116 16.6 Conclusion
118 17 Effect of Uncertainty without Flexibility in
Development Project Evaluation: We Re?]analyze the Garden
City Project by Reflecting Uncertainty Without Flexibility
119 17.1 Modeling Uncertainty for the Multi?]Asset
Development Project 120 17.2 Generating Random Future
Scenarios 122 17.3 Outcomes Reflecting Uncertainty for the
Multi?]Asset Development 123 17.4 Effect of Different
Probability Inputs Assumptions 127 17.5 Conclusion 129 18
Project Start?]Delay Flexibility: We Model the Value of.
500 The Most Basic and Widely Available Development Project
Option 131 18.1 Project Start?]Delay Option 132 18.2
Option Exercise Decision Rule 132 18.3 Defining "Profit"
in the Decision Model 134 18.4 Value of Start?]Delay
Flexibility in the Garden City Project 134 18.5 Conclusion
138 19 Decision Rules and Value Implications: We Further
Explore the Option to Delay the Project Start 139 19.1
Simple Myopic Delay Rule 140 19.2 Trigger Values 140 19.3
Value Implications of the Decision Rules 141 19.4 Effect
of Trigger Values (Start or Delay Bias) 143 19.5 Review
the Meaning of Flexibility Value 145 19.6 Conclusion 146
20 Modular Production Timing Flexibility: We Explore the
Timing Option to Pause and Restart the Project Any Time
After its Commencement 147 20.1 Modular Production Timing
Flexibility 148 20.2 Modeling the Modular Production
Option 148.
500 20.3 Value of Modular Production Timing Flexibility 150
20.4 Effect of Trigger Values (Bias toward Pause or
Continue.
504 Includes bibliographical references.
520 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. It presents
simple simulation models built in universal spreadsheet
software such as Microsoft Excel. These realistically
reflect the varying and erratic sources of uncertainty and
price dynamics that uniquely characterize real estate. 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. The book thereby aims to significantly improve
valuation and investment decision making. Flexibility and
Real Estate Valuation under Uncertainty: A Practical Guide
for Developers is presented at 3 levels. First, it
introduces and explains the concepts underlying the
approach at a basic level accessible to non-technical and
non-specialized readers. 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. At a second
level, the book presents a framework, a roadmap for the
prospective analyst. 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
third level includes more technical details and specific
models. An Appendix discusses the technical details of
real estate price dynamics. Associated web pages provide
electronic spreadsheet templates for the models used as
examples in the book. Some features of the book include:-
'' 'Concepts and tools that are simple and accessible to a
broad audience of practitioners;-'' 'An approach relevant
for all development projects;-'' 'Complementarity with the
author's Commercial Real Estate Analysis & Investments'the
most-cited real estate investments textbook on the market.
Flexibility 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.
590 O'Reilly|bO'Reilly Online Learning: Academic/Public
Library Edition
650 0 Real property|xValuation.
650 0 Real estate development.
650 0 Real estate investment.
650 6 Biens réels|xÉvaluation.
650 6 Promotion immobilière.
650 6 Immeubles|xInvestissements.
650 7 land valuation.|2aat
650 7 real estate development.|2aat
650 7 Real estate development|2fast
650 7 Real estate investment|2fast
650 7 Real property|xValuation|2fast
700 1 De Neufville, Richard,|d1939-|eauthor.
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