[...]... undergraduate and graduate real estate investment courses The CD-ROM included with the book contains spreadsheets for data analysis tailored specifically to real estate settings The major thrust is to bridge the gap between theory and practice by showing the student how to implement his real estate education in the real world The study of real estate follows long traditions grounded in Urban Economics and Finance... a much larger, and at times less sophisticated, audience It has been estimated that one-half of the world’s wealth is in real estate A book such as this offers tools to enhance decision- making for consumers and researchers in market economies of any country interested in land use and real estate investment Empirical risk analysis improves the understanding of markets in general Real estate is not different... of spreadsheet modeling and the complexity such simplification overlooks A PRACTICAL GUIDE TO INVESTMENT REAL ESTATE Perhaps the first manual for the private real estate investor was William Nickerson’s How I Turned $1,000 into a Million in Real Estate in My Spare Time based on his real estate investments in the 1930s Despite the complexities of modern day life, thousands of real estate investors still... understanding of programming The assumption is that students have had at least a semester of calculus and have for reference a primary real estate investment text Graduate students with some background in statistics will take the sample data provided and exercise their empirical skills in the context of real estate data limitations This will enhance understanding of how real estate adds to and fits... 2 Lenders and managers of large real estate portfolios, many of whom originate real estate data, will be able to incorporate these tools into their daily real estate risk management activities The most sophisticated investors and their advisors will use these tools for due diligence in an environment of professional liability and a rising standard of care 22 xv Preface 3 Investment real estate brokers... recently, data on real estate was available only for large, institutional grade properties and its use limited to those who work in that market Now, robust databases are available for many different types of real estate For the first time, databases covering private real estate investment have breadth (large number of observations in relatively small geographic areas) and depth (long histories of data covering... various homilies and truisms that have characterized private real estate investment for decades Second, at a time when the industry is digitizing and databases deliver more objective information about the private real estate investment market, it will incorporate appropriate yet innovative ways to use this new data Third, combining the first two, it will uncover a way of viewing risk in real estate that... Consider how the appropriate use of real estate data permits us to confirm the actual shape of the rent gradient  Reach conclusions about another commonly used term in real estate: the path of progress  Discuss how the use of data improves the location decision 1 2 Private Real Estate Investment CLASSICAL LOCATION THEORY Certain tenants, categorized by the way they use land, have certain needs Common... Economics and Finance There is, however an inherent conflict between the twin realities that the finance market is efficient and the real estate market is not Practitioners in the real world know, or at least act as if they know, that real estate is very different from finance No investment real estate broker gets up in the morning and does anything even remotely resembling what a stockbroker does While anecdotal... exhausted and/ or (b) because of institutional factors are inapplicable to real estate Hence, risk modeling using fast, numerically intensive simulation with bounded datasets offers a significant improvement over the present ad hoc real estate methods Considerable recent progress has been made in mathematical software and algorithms that permit one to access, combine, and integrate real estate databases . Date/Time: 22.12.2004/9:38pm Page: 3/22 Private Real Estate Investment Data Analysis and Decision Making Roger J. Brown, PhD Director of Research Real Estate and Land Use Institute San Diego State. consumers and researchers in market economies of any country interested in land use and real estate investment. Empirical risk analysis improves the under- standing of markets in general. Real estate. context of real estate data limitations. This will enhance understanding of how real estate adds to and fits into the overall economic picture. Practitioners 1. Lenders and managers of large real estate