Speaker: Simon Buechler (MIT)

Paper Title: On the value of market signals: Evidence from commercial real estate redevelopment

Abstract: We investigate how institutional commercial real estate investors adapt their investment decisions according to tangible localized market signals. We find that investors are more likely to implement buy-to-redevelop strategies in a given area when recent investments signal the existence of a capital intensity gap and economic activity mismatch between older buildings and newly built ones. Our analysis shows that investors deem these information externalities valuable. Ceteris paribus, when real estate investments signal obsolescence of the existing stock, investors are willing to pay up to 30% more to acquire a property for redevelopment. Our findings contribute to the literature on pricing market signals and provide insights for policymakers to stimulate commercial real estate investments and urban renewal.

Paper Link: https://drive.google.com/file/d/1XOG9NP7GXry8WTzqxGHXddxAt3tfOQnD/view?usp=sharing

Registration Link: https://us06web.zoom.us/webinar/register/WN_9NO6vkgkRZWOh5HAL0Iycw