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Cornell University School of Hotel Administration

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Full-Text Articles in Real Estate

Hotval Toolkit, Crocker H. Liu Oct 2019

Hotval Toolkit, Crocker H. Liu

Center for Real Estate and Finance Tools

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Scroll down to "Additional Files" to access the HOTVal Toolkit.

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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 ...


Third Quarter 2019: Is Bad News Fake News?, Crocker H. Liu, Adam D. Nowak, Robert M. White Jr Oct 2019

Third Quarter 2019: Is Bad News Fake News?, Crocker H. Liu, Adam D. Nowak, Robert M. White Jr

Cornell Real Estate Market Indices

Only hotels in the South Atlantic region experienced a positive price momentum during this period.* The performance of hotels in non-gateway cities declined at a faster rate relative to those in gateway cities. Hotel financial operating performance has finally returned to positive profitability with operating profit exceeding both a hotel property’s operating costs as well as financial (borrowing) cost, based on economic value analysis (EVA). The price of larger hotels has spiraled downward at a faster rate than that of smaller hotels and repeat sale hotels. The cost of hotel debt financing, as well as equity financing, has declined ...


Second Quarter 2019: Gradual Hotel Slowdown: Has The Party Ended?, Crocker H. Liu, Adam D. Nowak, Robert M. White Jr Jul 2019

Second Quarter 2019: Gradual Hotel Slowdown: Has The Party Ended?, Crocker H. Liu, Adam D. Nowak, Robert M. White Jr

Cornell Real Estate Market Indices

In this issue, we introduce our new regional indices of hotel performance. Based on these indices, hotels in the Midwest and Mountain regions (mostly hotels in Arizona, Colorado, and Nevada) have outperformed other regions, while hotels in the Pacific region (primarily California) and South Atlantic region (mostly Florida) have grown at a more moderate pace in the post-recession era. The performance of hotels in gateway cities declined this quarter, narrowing the gap in performance relative to hotels in non-gateway cities. Hotel financial performance overall is now in the red zone: operating profit stands below a hotel property’s borrowing cost ...


Where, When And How Do Sophisticated Investor Respond To Flood Risk?, Piet M. A. Eichholtz, Eva Steiner, Erkan Yönder Jun 2019

Where, When And How Do Sophisticated Investor Respond To Flood Risk?, Piet M. A. Eichholtz, Eva Steiner, Erkan Yönder

Working Papers

While the empirical evidence on the pricing of flood risk exposure in residential real estate held by uninformed households is mixed, this study shows that sophisticated investors in commercial real estate markets rationally respond to heightened flood risk by bidding down the prices of exposed assets. Using a detailed property-level database on commercial real estate transactions completed in New York, Boston, and Chicago before and after the shift in the salience of flood risk caused by Hurricane Sandy, we document that properties exposed to flood risk experience slower price appreciation after the storm than equivalent unexposed properties. We further show ...


The Rate Of Return On Real Estate: Long-Run Micro-Level Evidence, David Chambers, Christian Spaenjers, Eva Steiner Jun 2019

The Rate Of Return On Real Estate: Long-Run Micro-Level Evidence, David Chambers, Christian Spaenjers, Eva Steiner

Working Papers

We provide evidence that direct real estate investments are less profitable and more risky in the long run than previously thought. We hand-collect property-level data on realized income, expenses, and transaction prices from the archives of four large institutional investors in the U.K.—historically important Oxbridge colleges—for the period 1901–1970. Gross income yields mostly fluctuate around 5%, but trend to lower (higher) levels for agricultural and residential (commercial) real estate near the end of our sample period. Operating costs mean that net yields are about one third lower than gross yields on average. Long-term real income growth ...


The Hurdles To Financing Modular Development, Daniel Feutz Apr 2019

The Hurdles To Financing Modular Development, Daniel Feutz

Cornell Real Estate Review

Revenues from the permanent modular construction (PMC) sector jumped 62% in one year to reach $3.3 billion in 2016 and its quick growth has not gone unnoticed. The industry has attracted investment from sources such as Soft Bank’s Vision Fund and Amazon’s Alexa Fund, an indication of the perceived feasibility of modular building that is further illustrated in PMC’s growing market share that increased 37% from 2014 to 2017 (Bousquin, 2019). Rising construction costs, tight labor markets, and an unprecedented demand for housing have pushed modular construction towards being one of the disruptors of an industry ...


Rising Tourism In Saudi Arabia: Implications For Real Estate Investment, Ali S. Daye Apr 2019

Rising Tourism In Saudi Arabia: Implications For Real Estate Investment, Ali S. Daye

Cornell Real Estate Review

Over the last few years, the Kingdom of Saudi Arabia (KSA) has pursued a more aggressive approach towards economic diversification in order to plan for the future of its youth as nearly 60 percent of the country’s 3 million citizens are under the age of 30 (KSA-General Authority for Statics, 2017). Saudi Arabia traditionally has relied heavily on the public sector to absorb many of the educated Saudi nationals. However, the country is now looking to the private sector to create more jobs for its burgeoning population and has enacted policies that ease doing business in the country and ...


Modular Construction: A Solution To Affordable Housing Challenges, John Thompson Apr 2019

Modular Construction: A Solution To Affordable Housing Challenges, John Thompson

Cornell Real Estate Review

The lack of affordable housing is pervasive across the United States. It affects some locations more severely than others, with each having unique challenges. Construction and land acquisition costs are frequently cited as primary drivers of multi-family housing development, and affordability is determined by a geography’s housing costs versus its median income. This paper highlights crucial components in the connection between economic conditions, public policy, and affordable housing development. It focuses on how efficiencies in modular construction present opportunities for addressing specific challenges in Maine and will propose a strategy for public-private cooperation, particularly in the site selection process ...


Opportunity Zones And New Orleans: A Chance For Affordable Housing Growth, Wilson Blum Apr 2019

Opportunity Zones And New Orleans: A Chance For Affordable Housing Growth, Wilson Blum

Cornell Real Estate Review

In the year and a half since their introduction, Opportunity Zones have quickly become one of the hottest topics in real estate development. This exciting program offers a new chance to revitalize distressed communities around the country by significantly broadening the pool of potential investors and providing them with enticing incentives to pull their money out of the market and into these locales. The success or failure of the program will hinge on the ability of public-private partnerships to bridge an often fraught line between outside investment and local community. In addition to providing an overview of the Opportunity Zone ...


The U.S. Student Housing Market: Overlooked Opportunities, Joseph A. Mcfalls Apr 2019

The U.S. Student Housing Market: Overlooked Opportunities, Joseph A. Mcfalls

Cornell Real Estate Review

Student housing has emerged in recent years as one of the most in-demand asset classes in commercial real estate. Investors, both domestic and international, have been attracted to U.S. student housing projects for many reasons, including their steady yields and reliable returns during all market cycles (The Economist, 2018). As a result, investment in and development of student housing has increased dramatically over the past few years (Brass, 2018). Even with this increased focus on the sector, opportunities still remain in the student housing industry, particularly for investors and developers with differentiated projects. This paper will examine the current ...


Tailwinds On The U.S. Gulf Coast: How The Boom In U.S. Energy Production Is Creating Opportunities For Real Estate Investment, Christopher Trahan Apr 2019

Tailwinds On The U.S. Gulf Coast: How The Boom In U.S. Energy Production Is Creating Opportunities For Real Estate Investment, Christopher Trahan

Cornell Real Estate Review

The Federal Government’s commitment to deepen the Mississippi River channel and its decision to allow the exportation of crude have created many opportunities in the U.S. Gulf Coast region for private investment and development. Yet the country’s resurgence in energy production is temporarily impeded by a lack of sufficient infrastructure necessary to match supply with demand. As the glut of U.S. crude and demand for infrastructure increases, the need for industrial facilities on the Gulf Coast continues to grow. These facilities are essential to economic development along the nation’s southern energy corridor. The real estate ...


A Taxonomy Of Coworking Space: Manhattan, Nyc, Yaoyi Zhou Apr 2019

A Taxonomy Of Coworking Space: Manhattan, Nyc, Yaoyi Zhou

Cornell Real Estate Review

The growth in the coworking inventory has accelerated over the past years, with more than 5 million square feet of new space flooding into the market in each of the past three years (Cushman & Wakefield, 2018). In 2018, over 200 coworking companies that operated in the U.S. had at least one location larger than 5,000 square feet. As competition increases, coworking markets enter periods of “specialization” in spaces of various size, business plans and clientele (Brown, 2016; Diduch, 2018), however, the lack of analysis of these characteristics make it difficult to understand the current supply of coworking space on the market.


Research Articles Apr 2019

Research Articles

Cornell Real Estate Review

No abstract provided.


Baker Program Apr 2019

Baker Program

Cornell Real Estate Review

No abstract provided.


2018 Institutional Real Estate Allocations Monitor, Survey Highlights Apr 2019

2018 Institutional Real Estate Allocations Monitor, Survey Highlights

Cornell Real Estate Review

[Excerpt] Cornell University’s Baker Program in Real Estate and Hodes Weill & Associates are pleased to present the findings of the sixth annual Institutional Real Estate Allocations Monitor (the “2018 Allocations Monitor”). The 2018 Allocations Monitor focuses on the role of real estate in institutional portfolios, and the impact of institutional allocation trends on the investment management industry. Launched in 2013, the 2018 Allocations Monitor is a comprehensive annual assessment of institutions’ allocations to, and objectives in real estate investments. This report analyzes trends in institutional portfolios and allocations by region, type and size of institution.


36th Annual Cornell Real Estate Conference Recap Apr 2019

36th Annual Cornell Real Estate Conference Recap

Cornell Real Estate Review

[Excerpt] On October 19, 2018, the Cornell Real Estate Council (CREC) hosted the 36th annual Cornell Real Estate Conference in New York City. The conference brought together hundreds of industry professionals, alumni and current students for a day of networking and panel discussions surrounding recent trends. Cornell’s unparalleled alumni network within the real estate community facilitated a broad exchange of innovative ideas applicable across the industry, from design and construction to development and finance. Highlighting a “Focus on the Future,” five panel discussions, including keynote Speaker Seth Klarman (CAS ’79) and 2018 Industry Leader Award Recipient Kenneth Himmel (JCB-Hotel ...


Real Estate Industry Apr 2019

Real Estate Industry

Cornell Real Estate Review

No abstract provided.


Domestic Trek: Los Angeles, California Apr 2019

Domestic Trek: Los Angeles, California

Cornell Real Estate Review

[Excerpt] On the first day of the Baker Program’s Los Angeles trek, students visited Tustin Legacy, a 1600-acre development that is among the largest undeveloped land in Southern California. This site was constructed and commissioned shortly after Pearl Harbor as a Lighter-Than-Air (LTA) facility to patrol the Pacific coastline with manned blimps. At one point, as many as 12 blimps operated from two hangars on the site. The hangars, two of the largest wooden structures ever built, are over seventeen stories high, 1,000 feet long and 300 feet wide. Listed on the National Register of Historic Places, the ...


International Trek: Shanghai, China Apr 2019

International Trek: Shanghai, China

Cornell Real Estate Review

[Excerpt] Beginning their international trek, the Baker Program in Real Estate students visited the Colliers International office in Shanghai. The firm currently has 15,000 professionals and staff in 396 offices in 68 countries across six continents. Colliers has two billion square feet under management and $2.6 billion in annual revenue. Colliers Shanghai is the regional headquarters for east China and the company’s largest office in the country. This office provides a full range of services for industrial, office, retial and residential. Its landmark Shanghai projects include Platinum, L’Avenue, Ecocity, Chamtime Corporate Avenue, and Longyu International Plaza ...


Case Competitions Apr 2019

Case Competitions

Cornell Real Estate Review

[Excerpt] Cornell University continued its strong showing this past year in several case competitions across the country winning 1st place in the Argus University Challenge, 3rd place at the University of Miami Impact Investing Competition, and an Honorable Mention at the UT Austin National Real Estate Case Competition and the ULI-Hines Student Competition. Teams also participated in the Kellogg Real Estate Venture Competition at Northwestern University.


Alumni Highlight: Jiwon Park (Baker/Mba '18), Samsung Apr 2019

Alumni Highlight: Jiwon Park (Baker/Mba '18), Samsung

Cornell Real Estate Review

Jiwon Park is a member of the real estate investment team in the asset management department of Samsung Fire & Marine Insurance. A 2018 graduate of Cornell’s Baker Program in Real Estate and the Johnson School of Management, Jiwon served as a Research Associate at Hodes Weill & Associates in New York as well as at an asset management firm in Los Angeles while at Cornell. Prior to Cornell, she worked at JLL Korea. Jiwon is a graduate of the University of Southern California with a double major in accounting and real estate finance.


Alumni Highlights: Ravikanth Pamidimukkala (Baker '17), Redsky Capital, Llc Apr 2019

Alumni Highlights: Ravikanth Pamidimukkala (Baker '17), Redsky Capital, Llc

Cornell Real Estate Review

Ravikanth (Ravi) Pamidimukkala is an Associate at RedSky Capital, LLC, in New York City. A 2017 graduate of Cornell’s Baker Program in Real Estate, Ravi interned with First Capital Real Estate Advisors, LP, during the program. Before joining the Baker Program, Ravi worked in ground-up development and acquisitions for mixed-use, luxury residential, and hospitality asset classes in South East Asia and India. He holds a Bachelor’s degree from the Indian Institute of Technology Kharagpur and a Master’s of Professional Studies at Cornell University.


Highlights: Wx New York Women Executives In Real Estate, Krizia Calmet Apr 2019

Highlights: Wx New York Women Executives In Real Estate, Krizia Calmet

Cornell Real Estate Review

[Excerpt] For the fourth consecutive year, the Cornell Center for Real Estate and Finance and Cornell Real Estate Women hosted its annual WX Panel Discussion held at Statler Hall on March 11. WX New York Women Executives in Real Estate is an invitation-only association for New York’s executive-level women actively engaged in the commercial real estate industry. Through networking opportunities and educational seminars, WX promotes the advancement of women in the industry for its diverse membership of owners, developers, brokers, architects, engineers, bankers, and lawyers.

Sylvia Melikian (MBA ’76) moderated the four member panel of distinguished WX executives who ...


Photo Credits Apr 2019

Photo Credits

Cornell Real Estate Review

Photo credits for Cornell Real Estate Review (2019), Volume 17.


Letter From The Editors, Christopher Trahan, Ershad Chagani, Jennifer Spritzer, Joe Mcfalls, Wilson Blum Apr 2019

Letter From The Editors, Christopher Trahan, Ershad Chagani, Jennifer Spritzer, Joe Mcfalls, Wilson Blum

Cornell Real Estate Review

The Editorial Board of the Cornell Real Estate Review is pleased to present Volume 17 (2019). Under the direction of the Baker Program in Real Estate, the Review is a student run publication founded in 2002 as a forum for faculty, professionals, and real estate students to focus on the interdisciplinary nature of real estate. The Review covers a broad range of issues from various real estate fields including design, business economics, engineering, finance, law, planning, development, marketing, and property management. The publication blends informative articles on real estate practice with application-based academic research.


Editorial Board Apr 2019

Editorial Board

Cornell Real Estate Review

Editorial board members for Cornell Real Estate Review (2019), Volume 17.


Table Of Contents Apr 2019

Table Of Contents

Cornell Real Estate Review

Table of contents for Cornell Real Estate Review (2019), Volume 17.


Cover Apr 2019

Cover

Cornell Real Estate Review

Front cover of Cornell Real Estate Review (2019), Volume 17.


First Quarter 2019: Déjà Vu All Over Again: Reliving Groundhog Day, Crocker H. Liu, Adam D. Nowak, Robert M. White Jr. Apr 2019

First Quarter 2019: Déjà Vu All Over Again: Reliving Groundhog Day, Crocker H. Liu, Adam D. Nowak, Robert M. White Jr.

Cornell Real Estate Market Indices

Hotels in non-gateway cities outperformed those in gateway cities for the first time since the first quarter of 2006. That said, overall hotel financial performance still stands at breakeven, with operating profit similar to a hotel property’s borrowing cost based on economic value analysis. Smaller hotels and hotels involved a repeated sale rose in price, while larger hotels continued their downward price spiral. The cost of hotel debt financing has declined, with a narrowing in the relative risk premium for hotels. A reading of our tea leaves suggests prices are expected to decline for both large and small hotels ...


Fourth Quarter 2018: “David” Hotels Continue To Dominate The “Goliaths”, Crocker H. Liu, Adam D. Nowak, Robert M. White Jr Jan 2019

Fourth Quarter 2018: “David” Hotels Continue To Dominate The “Goliaths”, Crocker H. Liu, Adam D. Nowak, Robert M. White Jr

Cornell Real Estate Market Indices

Hotels in gateway cities continue to shine, with prices rising 25 percent year over year, compared to an 8-percent rise for hotels in non-gateway cities. Hotel financial performance is still breakeven, with operating profit similar to a hotel property’s borrowing cost, based on economic value analysis. Year over year, mortgage financing volume for hotels fell, as interest rates on Class A and Class B and C hotel deals have risen. A reading of our tea leaves suggests prices are expected to decline for the “Goliaths,” that is, large hotels, while prices moderate (at best) or decline slightly (at worst ...