Liquidating estate assets
full profits from task Motivate agent to maximize agent's expected value Assume risk-neutrality Agent's Goals: Maximize labor value. Set risk-return from project to meet personal goal Insure future work Contract & Solutions: Full disclosure? Depend upon available information Incentive compatibility Agency Problems as costs Monitoring Costs Inefficiency and Leakage Time delays Diversification cost-benefit Examples in Development Developer and Financier Information differential: Local economy Incentive differential: Risk aversion, timing Moral Hazard Risk General and Limited Partners Information differential: Project Incentive differential: Risk aversion, timing Moral Hazard Risk Developer and Labor Information differential: Labor Effort Incentive differential: Risk aversion, timing Effort risk Homeowners and Lender Information differential: Upkeep Incentive differential: expenses Adeverse selection risk Contract solutions Costa Mesa Case The Location Highways Orange County Retail/Office Civic Authorities Transportation The Market Southern California Economy Overbuilt? The Parcel Approvals Land Lease: Comparables The Competitors Segistrom The Developer Curci Strengths Weaknesses The Financier Copley Strengths Weaknesses The Deal Current Motivation Future Position The Future Retail: Introduction to Shopping Centers Historical Evolution Urban to Suburban Settlement Patterns Taxonomy of Stores Variety Specialty Limited Line Department Mass Merchandise Discount Warehouse Types of Shopping Centers Shapes of Shopping Centers Rationale: Anchors for Draw Shops for Impulse Finance: Anchors own or lease cheaply Specialty shops pay percentage Gravity Models William Reilly (1929) "Retail Score Inversely Proportional to Distance" Geographical Settlement Patterns Applications: How many customers will come to the store? Payments Contingent payments Limited Partnership General Partners: Three EDUS partners share residual above 8 1/2 % Limited Partner A: Senior Equity 600K for 50% 8 1/2 % first claim 1/2 percent rents Limited Partner B: Junior Equity 400K for 50% 200K share residual above 8 1/2 % 1/2 percent rents Market Report Definition of Trade Area Differentiation of Comparison vs. ) Realize Value on Undervalued Assets Why undervalued? CMO (Collateralized Mortgage Obligation) Preferred Habitat Theory: Cut Slices Vertically!
Price = .65 Million Bank Considerations Default Risk Take-out Loan Future Business Adverse Selection Financing Rate The REIT Game This is an investment game based upon publically traded REIT's and REIT mutual funds. Partner story Strategy of principal Properties Auction sales Current operations Price/Sq. Hedonic regression A linear model of price conditional upon characteristics P may be interpreted as the log return for the housing portfolio in period t.
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Everyone must be prepared for class discussion on every case. Estate as physical land and improvements (a place and thing) A physical geographical location Role of law Role of technology Role of government Property rights (an interest) Distinct from estate Divisible Transferable across owners Transferable through time Posessatory interest: English common law. Immobility Location is key characteristic Local economic issues prevail in valuation i.e.
There is a Real Estate Investment Trust Game to be played through the term. Fisher, Case: Taurus Realty or: Case: The Real Estate Global Crash Lecture 1: Introduction Ancient History of Real Estate Real Estate Defined by Law Mesopotamian property rights Ur (1,800 B. Any interest in real estate that carries right of exclusive possession, right to sell, lease, use or keep others off. city-wide employment Micro economic conditions might prevail i.e.
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) PO only gets principal (what happens when rates drop?