To read the full version of this content please select one of the options below:

Estimating effective rents

Gerald R. Brown (University of Salford, Salford, UK)

Journal of Property Finance

ISSN: 0958-868X

Article publication date: 1 June 1995

2649

Abstract

Develops an approach to estimating effective rents based on the assumption that the net present value of incentives should be zero. Investors should not be able to profit from lease incentive packages if they are valued correctly because they should have no influence on capital values. If ad hoc methods of valuation are used in practice then there may be opportunities to identify mispriced properties. Presents a model which recognizes that different aspects of the cashflows can carry different risk and should be valued accordingly. Suggests that although the resulting model is more complex than generally found in practice it can nevertheless easily be solved with a spreadsheet. Develops the economic and financial principles involved rather than focusing on rule of thumb procedures.

Keywords

Citation

Brown, G.R. (1995), "Estimating effective rents", Journal of Property Finance, Vol. 6 No. 2, pp. 33-42. https://doi.org/10.1108/09588689510096079

Publisher

:

MCB UP Ltd

Copyright © 1995, MCB UP Limited

Related articles