Real Estate Rental Payments: Application of Stock-Inventory Modeling
This paper analyzes the rental term structure taking into account the opportunity costs faced by the tenant for varying lease lengths. The analysis involves the application of a multi-period stock inventory model. The implication of the model is that the term structure of rents is determined by a clientele effect that can bias the occupancy value derived from using rational-expectations in the term structure relationship. The model does, however, reveal the characteristic stock-inventory U-shaped function that will determine the optimal lease length for a given tenant.
Year of publication: |
2004
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Authors: | McCann, Philip ; Ward, Charles |
Published in: |
The Journal of Real Estate Finance and Economics. - Springer. - Vol. 28.2004, 2_3, p. 273-292
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Publisher: |
Springer |
Saved in:
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