Valuing long-term leases: The option to redevelop
dc.contributor.author | Capozza, Dennis R. | en_US |
dc.contributor.author | Sick, Gordon A. | en_US |
dc.date.accessioned | 2006-09-11T19:24:22Z | |
dc.date.available | 2006-09-11T19:24:22Z | |
dc.date.issued | 1991-06 | en_US |
dc.identifier.citation | Capozza, Dennis R.; Sick, Gordon A.; (1991). "Valuing long-term leases: The option to redevelop." The Journal of Real Estate Finance and Economics 4(2): 209-223. <http://hdl.handle.net/2027.42/47799> | en_US |
dc.identifier.issn | 0895-5638 | en_US |
dc.identifier.issn | 1573-045X | en_US |
dc.identifier.uri | https://hdl.handle.net/2027.42/47799 | |
dc.description.abstract | Long-term leases on property are popular in many jurisdictions, both with private vendors and with local governments who want to retain future control over land use. A puzzling issue for vendors and purchasers has been how to value these leased properties relative to fee-simple properties. Simple present-value models suggest that there should be little difference between the price of fee-simple land and the price of long-term leases. Transaction prices in Canada on 80-year to 100-year residential leases, however, are 20 percent to 40 percent less than comparable fee-simple properties. We outline a financial model for valuing leased properties. The value of the option to upgrade or redevelop is considered. We show that the large part of the discount of leased properties from fee-simple properties can be explained by this option to redevelop. | en_US |
dc.format.extent | 767501 bytes | |
dc.format.extent | 3115 bytes | |
dc.format.mimetype | application/pdf | |
dc.format.mimetype | text/plain | |
dc.language.iso | en_US | |
dc.publisher | Kluwer Academic Publishers; Springer Science+Business Media | en_US |
dc.subject.other | Economics / Management Science | en_US |
dc.subject.other | Regional Science | en_US |
dc.subject.other | Finance /Banking | en_US |
dc.subject.other | Lease | en_US |
dc.subject.other | Fee-simple | en_US |
dc.subject.other | Real Option | en_US |
dc.subject.other | Redevelop | en_US |
dc.title | Valuing long-term leases: The option to redevelop | en_US |
dc.type | Article | en_US |
dc.subject.hlbsecondlevel | Economics | en_US |
dc.subject.hlbtoplevel | Business | en_US |
dc.description.peerreviewed | Peer Reviewed | en_US |
dc.contributor.affiliationum | School of Business, University of Michigan, 48109-1234, Ann Arbor, MI, USA | en_US |
dc.contributor.affiliationother | Faculty of Management, University of Calgary, T2N 1N4, Calgary, Alberta, Canada | en_US |
dc.contributor.affiliationumcampus | Ann Arbor | en_US |
dc.description.bitstreamurl | http://deepblue.lib.umich.edu/bitstream/2027.42/47799/1/11146_2004_Article_BF00173125.pdf | en_US |
dc.identifier.doi | http://dx.doi.org/10.1007/BF00173125 | en_US |
dc.identifier.source | The Journal of Real Estate Finance and Economics | en_US |
dc.owningcollname | Interdisciplinary and Peer-Reviewed |
Files in this item
Remediation of Harmful Language
The University of Michigan Library aims to describe library materials in a way that respects the people and communities who create, use, and are represented in our collections. Report harmful or offensive language in catalog records, finding aids, or elsewhere in our collections anonymously through our metadata feedback form. More information at Remediation of Harmful Language.
Accessibility
If you are unable to use this file in its current format, please select the Contact Us link and we can modify it to make it more accessible to you.