Matching Items (19)

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FASB ASC Topic 606: Revenue from Contracts with Customers Analysis and Impact on the Real Estate Industry

Description

In 2014, IASB and FASB published a new revenue recognition standard that will upend the way revenue is recognized on financial statements filed with the SEC. The new standard, ASC

In 2014, IASB and FASB published a new revenue recognition standard that will upend the way revenue is recognized on financial statements filed with the SEC. The new standard, ASC 606 \u2014 Revenue from Contracts with Customers, is effective as of December 16, 2017 for all public US GAAP entities and effective for all IFRS entities as of January 1, 2018. All non-public US GAAP entities are required to implement the reporting standards for financial periods following December 16, 2018. The purpose of this new guidance is to shift from industry and transaction specific revenue recognition methods to a framework that enables financial statement users to understand how and when revenue is recognized. As an incoming associate within the audit industry, I decided to analyze the key differences between the new revenue recognition standard with the existing GAAP and IFRS standards. The following research explores the impact on various industries, particularly the real estate industry. ASC 606's impact will vary depending on the industry. In terms of real estate, the industry will experience a moderate impact. The new guidance will likely enable the earlier recognition of revenue in most instances, based on the five-step revenue recognition process laid out by the IASB and FASB. This publication also analyzes the 10-K's of three companies in the real estate industry; Kennedy Wilson Holdings Inc., CBRE Group Inc., and Digital Realty Trust, Inc. Through excerpts from the 10-K's of these companies, readers will gain insights into how real estate companies are preparing for the implementation of ASC 606. With this new revenue recognition standard, financial statement users will be able to better grasp the nature, timing, amount, and uncertainty of revenue recognition, thereby increasing transparency within the public accounting profession.

Contributors

Agent

Created

Date Created
  • 2018-05

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Brexit and Beyond: The Future Implications on London's Commercial Real Estate Market

Description

This thesis takes the form of a market research report with the goal of analyzing the implications of the United Kingdom (UK) leaving the European Union (EU) (known as “Brexit”)

This thesis takes the form of a market research report with the goal of analyzing the implications of the United Kingdom (UK) leaving the European Union (EU) (known as “Brexit”) on London’s office commercial real estate market. The ultimate goal of this report is to make a prediction, firmly grounded in quantitative and qualitative research conducted over the past several months, as to the direction of London’s commercial real estate market going forward (post-Brexit). Within the commercial real estate sector, this paper narrows its focus to the office segment of the London market.

Understanding the political landscape is crucial to formulating a reasonable prediction as to the future of the London market. Aside from research reports and articles, our main insights into the political direction of Brexit come from our recordings from meetings in March of 2017 with two high-ranking members of Parliament and one member of the House of Lords—all of whom are members of the Tory Party (the meetings being held under the condition of anonymity). The below analysis will be followed by a discussion of the economics of Brexit, primarily focusing on the economic risks and uncertainties which have emerged after the vote, and which currently exist today. Such risks include the UK losing its financial passporting rights, weakening GDP and currency value, the potential for a reduction in foreign direct investment (FDI), and the potential loss of the service sector in the city of London due to not being able to access the European Single Market.

The report will shift focus to analyzing three competing viewpoints of the direction of the London market based on recordings from interviews of stakeholders in the London real estate market. One being an executive of one of the largest REITs in the UK, another being the Global Head of Real Estate at a top asset management firm, and another being a director at a large property consulting firm. The report includes these differing “sub-theses” in order to try to make sense of the vast market uncertainties post-Brexit as well as to contrast their viewpoints with where the market is currently and with the report’s investment recommendation.

The remainder of the report will consist of the methods used for analyzing market trends including how the data was modeled in order to make the investment recommendation. The report will analyze real estate and market metrics pre-Brexit, immediately after the vote, post-Brexit, and will conclude with future projections encapsulating the investment recommendation.

Contributors

Agent

Created

Date Created
  • 2017-12

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Private Equity Real Estate: Market Analysis and Underwriting for Value-Add Commercial Multifamily Investments

Description

For this thesis, the authors would like to create a hypothetical Private Equity Real Estate Investment firm that focuses on creating value for partners by taking an opportunistic approach to

For this thesis, the authors would like to create a hypothetical Private Equity Real Estate Investment firm that focuses on creating value for partners by taking an opportunistic approach to acquiring under-performing urban multi-family properties with large upside potential for investing. The project will focus on both the market analysis and financial modeling associated with investment strategy and transactions. There is a substantial amount of complexity within commercial real estate and this thesis seeks to offer an accurate and comprehensive documentary of the process, while simplifying it for everyday readers. Additionally, there are a significant amount of risk factors associated with investment decisions, so the best practices from the industry documented in this manuscript are valuable tools for successful investing in the future. To gain the most profound and reliable industry knowledge, the authors leveraged the experience of dozens of industry professionals through research and personal interviews. Through careful analysis, the authors were able to ascertain the current economic position in the real estate cycle and to create a plan for future investing. Additionally, they were able to identify and evaluate a specific asset for purchase. As a result, the authors found that multifamily properties are a sound investment for the next two years and that the company should slowly start to shift directions to office and retail in 2018.

Contributors

Agent

Created

Date Created
  • 2016-05

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The Monetary and Non-Monetary Value of a Real Estate License

Description

My Honors Thesis is about answering a central question regarding the business of real estate: "What is the return on investment of obtaining a real estate license?" I focused my

My Honors Thesis is about answering a central question regarding the business of real estate: "What is the return on investment of obtaining a real estate license?" I focused my research on the monetary, time, and other value factors that affect the initial cost of securing a real estate salesperson license in the State of Arizona (costs) and the amount of money a licensed salesperson makes as a result of having a salesperson license (income). Licensees make this trade-off: the cost in terms of real dollars to obtain a license, as well as the opportunity costs associated with the time to secure, start using, and begin to earn money by way of a salesperson license. To answer the central question I conducted a survey of active licensees in order to determine the value ascribed to holding a real estate salesperson license. Through my research, I concluded that there is not a single number that can be assigned to a real estate license that indicates its value, but the data collected reveals that the return on investment has the potential to be great. Upfront costs and fees necessary to obtain a license are insignificant when the commission a licensee can then make from a single transaction is enough to cover those expenses. Therefore, based on the survey results and research into the initial costs associated with obtaining a real estate license, there appears to be sufficient data to support a positive return on investment and warrant obtaining a real estate license.

Contributors

Agent

Created

Date Created
  • 2018-05

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My Realtor, My Friend: Perceived Value in the Realtor-Client Relationship

Description

The business of residential real estate is booming; over 5 million homes were sold in the United States in 2017 alone, according to the National Association of REALTORS® (“Quick Real

The business of residential real estate is booming; over 5 million homes were sold in the United States in 2017 alone, according to the National Association of REALTORS® (“Quick Real Estate Statistics,” 2018). With the recovery of the housing market after the 2008 crash, more home buyers and sellers seek out real estate agents to assist with their transactions. Despite the majority of home buyers and sellers still using agents to conduct transactions, obstacles for fostering positive relationships come in the form of poor agent ethical reputations (Pacelle, 1994), agent empathy (Snyder et al, 2011), and even agent attractiveness (S.P. Salter et al, 2012). These reasons make it all the more critical that agents stand out from competitors, raising the question of how agents can differentiate themselves from other agents. To answer this question, this thesis seeks to discover what clients and agents value the most in their relationship with each other. In this study, three real estate agents and a client or client-couple from each were interviewed about the agent’s personality, brand promise, and actions taken to convey the promise. The most important factors in developing relationships, as well as a theoretical framework for the different relationships that can be formed within the agent-client context, were derived from the interview data collected. Commercial friendship develops from the overlap of all three relationship factors identified in the study, and as previously found, correlates with client loyalty and relationship quality (Lou, Zhou & Zheng, 2011). By shaping service around such factors, agents may be able to form better relationships with their clients. An agent with a stronger relationship with their clients may be more likely to receive referrals, earn customer loyalty, and even capture the attention of a first-time home buyer without the use of referral.

Contributors

Agent

Created

Date Created
  • 2018-12

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Future Outlook in Single-Family Residential Real Estate Investment Trusts

Description

This paper takes a critical look at single-family real estate investment trusts’ generative returns since the 2008 Housing Crisis. The research paper presents an overview of REITs legal qualifications, the

This paper takes a critical look at single-family real estate investment trusts’ generative returns since the 2008 Housing Crisis. The research paper presents an overview of REITs legal qualifications, the 2008 Housing Crisis and how the crisis led to the advent of the single-family home REIT industry, a case study on a single-family home REIT, the current market sentiment, trends that are impacting the performance of publicly traded single-family home REITs, and future opportunity for maximizing returns in the sector. Home pricing discrepancies will arise from the lack of housing starts and increased demand for available homes, leading to diminished returns with pure acquisition strategies. After detailing accessible empirical data on the American single-family home industry, we seek to find alternatives for single-family home REITs to continue to post their prior yield to investors after the 2008 Housing Crisis. Strategies such as development and expansion into rural markets will be examined as potential growth opportunities for single-family REITs.

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Agent

Created

Date Created
  • 2020-05

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Managing Real Estate Investments: An analysis of microeconomic and financial metrics and scenarios and their effect on investor-level asset returns

Description

This paper will examine the statistical significance of IRR dispersions caused by adjustments to property conditions. Many different economic metrics affect the returns and performance of real estate assets. During

This paper will examine the statistical significance of IRR dispersions caused by adjustments to property conditions. Many different economic metrics affect the returns and performance of real estate assets. During the underwriting process, many of these factors are considered and analyzed to find the true value of the asset given a set of market conditions. Because of the dynamic nature of the market, these factors fluctuate and therefore affect asset returns. Using Argus software, real estate managers can identify these variables and see how their adjustments affect asset returns in real-time. The beginning of this paper will start with an outline of the properties being analyzed, and well as financial information and market assumptions. For the statistical analysis, the Argus inputs that will be analyzed are:
1. Rental Revenue
2. Occupancy Rate
3. Tenant Improvements
4. Leasing Commissions
5. Operating Expenses
6. Capital Expenditures
7. Purchase Price
8. LTV
9. Debt Service Payment
10. Exit Sales Price
For the analysis, each variable will be individually adjusted without any changes to the other variables to ensure that changes in IRR are solely a result of the variable being adjusted. After the sensitivity analysis, each variable will be examined further the showcase differences in disparities and provide managerial insight. Finally, the findings will be applied to a modern-day scenario for additional insight on the practice use of the data. The importance of this data is that once analyzed, it can help real estate managers understand the main determinants of value in commercial real estate investments.

Contributors

Agent

Created

Date Created
  • 2020-05

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Opportunities for Growth: Capitalization of Current Trends Relating to the Commercial Construction Industry

Description

Executive Casework, Inc. is a custom commercial mill working company based in San Jose, CA. Although the company originally only focused on cabinets, it has expanded to include custom reception

Executive Casework, Inc. is a custom commercial mill working company based in San Jose, CA. Although the company originally only focused on cabinets, it has expanded to include custom reception desks and solid surface countertops to meet demand. The company founded by David and Mark Brown has humble beginnings, originally located in Mark’s garage. Over the last two decades, the company has seen astronomical growth buoyed up by the fast increase in commercial real estate in Silicon Valley. <br/>However, the company is currently facing considerable uncertainty like many others in the industry. These resulting overhead costs, when paired with future uncertainty of demand created by geopolitical trends, work from home, and Covid-19, create a notable problem for Executive Casework, Inc. As such, this thesis will focus on strategic steps Executive Casework, Inc. can make to capitalize on current macrocosmic trends, as well as trends within their own industry. More specifically, it will be a strategic analysis identifying the key external forces driving the fluctuating revenues in the commercial custom mill working industry, followed by an analysis of these external forces (magnitude and longevity). We will end with a framework for capitalizing on these trends by organizationally and physically placing a company like our exemplar company, Executive Casework, in the best position to realize maximum profitability.

Contributors

Agent

Created

Date Created
  • 2021-05

Company X Collaborative Thesis: Real Estate

Description

The COVID-19 pandemic has and will continue to radically shift the workplace. An increasing percentage of the workforce desires flexible working options and, as such, firms are likely to require

The COVID-19 pandemic has and will continue to radically shift the workplace. An increasing percentage of the workforce desires flexible working options and, as such, firms are likely to require less office space going forward. Additionally, the economic downturn caused by the pandemic provides an opportunity for companies to secure favorable rent rates on new lease agreements. This project aims to evaluate and measure Company X’s potential cost savings from terminating current leases and downsizing office space in five selected cities. Along with city-specific real estate market research and forecasts, we employ a four-stage model of Company X’s real estate negotiation process to analyze whether existing lease agreements in these cities should be renewed or terminated.

Contributors

Agent

Created

Date Created
  • 2021-05

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How Blockchain Technology Will Affect the Real Estate Industry

Description

Blockchain technology has taken the world by storm, and is now establishing itself the the real estate industry. Through new inventions such as smart contracts and crypto mortgages, the real

Blockchain technology has taken the world by storm, and is now establishing itself the the real estate industry. Through new inventions such as smart contracts and crypto mortgages, the real estate industry is at the precipice of a major technological shift. After careful analysis of the current technologies and interviews with industry experts, this thesis will conclude with the possible implications that will arise from the wide spread use of Blockchain technology in real estate.

Contributors

Agent

Created

Date Created
  • 2021-05