Call us 24/7: + 1(925)399 0085

Get your paper done by an expert

No matter what kind of academic paper you need, it is simple and secure to hire an essay writer for a price you can afford at StudyAcer. Save more time for yourself.

Order A Custom Paper

Approximate price: $

19 k happy customers
8.5 out of 10 satisfaction rate
527 writers active

Real Estate Finance and Investments

Real Estate Finance and Investments – Fall 2011

Homework 2

Question 1

The equity REIT A currently (current time is end of 2005) trades at $120/share. In the past year, the realized rate of return on A has been 10%, and A’s cap rate at the beginning of year was 13%. REIT A distributed all of its NOI in the past year to its shareholders in the form of dividends. What was the trading price of A at the beginning of 2005?1

Question 2

Consider the following projected cash ‡ows (including reversion) for Property

A and Property B for the following 10 years.

Annual net cash ‡ow projections for two properties ($ millions)

































a. What is the annual growth rate in operating cash ‡ows for each building during the …rst nine years?

b. If both properties sell at cap rates (initial and terminal cash yields) of 9%, what is the expected annual return on a 10-year investment in each property?

c. If the 9% cap rate represents a fair market value for each property, then which property is the more risky investment (and how do you know)?

Question 3

You are considering investing in Property B in question 2. The listing price of the property is $11 million. You know that the historical annual returns on this type of property has been 10%, and the historical risk premium on this type of property has been 5.5%. In alternative investments tools, the prices of zero coupon treasury bonds are as follows:

Prices of zero coupon treasury bonds (denomination = $1,000)























How much is the property worth? Is this a good investment opportunity?2

1 Hint: Start with the de…nition of return. Write the return to REIT A in 2005. The answer will be staring at you …

2 Hint: You can calculate the risk free rates at di¤erent maturities from the Treasury bond

prices; i.e., Pt =






Our guarantees

Study Acers provides students with tutoring and help them save time, and excel in their courses. Students LOVE us!No matter what kind of essay paper you need, it is simple and secure to hire an essay writer for a price you can afford at StudyAcers. Save more time for yourself. Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Our Homework Writing Disciplines

With a highly diverse team in almost all academic fields including: