4450738
Description
Mind Map by ashley.stephan7, updated more than 1 year ago
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Created by ashley.stephan7
about 8 years ago
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Ch. 1 Nature of
Real Estate
- 3 alternative
definitions for
real estate:
- tangible assets
of land &
buildings
- real property
vs. personal
property
- real -
permanent
improvements
- improvements on the land:
fixed structures
- improvements to the land:
making land suitable for
construction
- improvements on the land:
fixed structures
- personal -
things that can
be moved
- real -
permanent
improvements
- real property
vs. personal
property
- bundle of intangible
rights associated
with ownership
- property's
characteristics
- physical
- structure
- age
- size
- design
- quality
- age
- land
- size
- shape
- other natural
features
- size
- structure
- locational
- residential
- convenience
- access
- convenience
- commercial
- visibility
- access
- visibility
- residential
- legal
- physical
- property's
characteristics
- refers to the industry or
business activities related to
the acquisition, operation, &
disposition of physical assets
- tangible assets
of land &
buildings
- Real Estate
and the
Economy
- Land Use
in the U.S.
- an acre =
43,560 square
feet
- 640 acres in a
square mile
- 640 acres in a
square mile
- majority
of land is
developed
- an acre =
43,560 square
feet
- Real Estate
and U.S.
Wealth
- single largest
asset class
- 23% of
household
wealth
- 72% of
household
liabilities are
mortgages
- single largest
asset class
- Land Use
in the U.S.
- Real Estate
Markets &
Participants
- User, Capital, and
Property Markets
- User Markets:
competition
for physical
locations and
space
- Capital Markets:
serve to allocate
financial
resources to
households and
firms who need it
- Equity Interests:
"owners"
- private
- individuals,
partnerships,
limited liability
corporations,
private equity
funds, hedge
funds
- individuals,
partnerships,
limited liability
corporations,
private equity
funds, hedge
funds
- public
- publicly traded real
estate investment
trusts (REITs) and
real estate
companies
- publicly traded real
estate investment
trusts (REITs) and
real estate
companies
- private
- Debt Interests:
"lenders"
- private
- banks,
thrifts,
insurance
companies,
finance
companies,
private
lenders
- banks,
thrifts,
insurance
companies,
finance
companies,
private
lenders
- public
- commercial
mortgage-backed
securities (CMBS)
and mortgage
REITs
- commercial
mortgage-backed
securities (CMBS)
and mortgage
REITs
- private
- Equity Interests:
"owners"
- Property Markets: determine
the required property specific
invesment returns, property
values, capitalization rates,
and construction feasibility
Annotations:
- capitalization rate - the ratio of a property's annual net inome to its value
- User Markets:
competition
for physical
locations and
space
- Role of
Government
- local gov't =
most influence
- state gov't =
least effect
- national gov't =
many effective
possibilities
- local gov't =
most influence
- Interaction of 3
Value-Determining
Sectors
- "Real World"
- demand for
space in
submarkets
of local areas
- supply of
space in
submarkets
of local areas
- local user
markets
- rental
rates
- property
cash flows
- property
cash flows
- rental
rates
- local user
markets
- demand for
space in
submarkets
of local areas
- "Financial World"
- all investment
opportunities
- capital
markets
- investment
returns
- required
returns
- property
markets
- value
- property
markets
- value
- required
returns
- investment
returns
- capital
markets
- savings
- all investment
opportunities
- "Real World"
- Production of
Real Estate
Assets
- depends on
construction
costs
- depends on
construction
costs
- User, Capital, and
Property Markets
- Characteristics
- heterogenous
products
- immobile
products
- localized
markets
- segmented markets
- privately negotiated
transactions with
high costs
- heterogenous
products
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