IDEAS home Printed from https://ideas.repec.org/a/jre/issued/v15n31998p223-238.html
   My bibliography  Save this article

Rationales for Real Estate Leasing versus Owning

Author

Abstract

In this article, rationales for the widespread existence of commercial real estate leasing are examined. Given the tendency of tenants to abuse property to their own advantage, there must be powerful incentives on the other side to encourage landlords and property managers to participate in the widespread practice of leasing. We suggest that common leasing practices are the consequence of many rationales, including the ability of the landlord to solve free-rider problems in maintaining property desirability and informational asymmetries that exist between landlords and tenants.

Suggested Citation

  • John Benjamin & Chris de la Torre & Jim Musumeci, 1998. "Rationales for Real Estate Leasing versus Owning," Journal of Real Estate Research, American Real Estate Society, vol. 15(3), pages 223-238.
    • Handle: RePEc:jre:issued:v:15:n:3:1998:p:223-238
    as

    Download full text from publisher

    File URL: http://pages.jh.edu/jrer/papers/pdf/past/vol15n03/v15p223.pdf
    File Function: Full text
    Download Restriction: no

    References listed on IDEAS

    as
    1. James, Christopher, 1987. "Some evidence on the uniqueness of bank loans," Journal of Financial Economics, Elsevier, vol. 19(2), pages 217-235, December.
    2. Williamson, Oliver E, 1988. " Corporate Finance and Corporate Governance," Journal of Finance, American Finance Association, vol. 43(3), pages 567-591, July.
    3. Benjamin, John D & de la Torre, Cris & Musumeci, Jim, 1995. "Controlling the Incentive Problems in Real Estate Leasing," The Journal of Real Estate Finance and Economics, Springer, vol. 10(2), pages 177-191, March.
    4. Barclay, Michael J & Smith, Clifford W, Jr, 1995. " The Priority Structure of Corporate Liabilities," Journal of Finance, American Finance Association, vol. 50(3), pages 899-917, July.
    5. Bhattacharya Sudipto & Thakor Anjan V., 1993. "Contemporary Banking Theory," Journal of Financial Intermediation, Elsevier, vol. 3(1), pages 2-50, October.
    6. Sharpe, Steven A. & Nguyen, Hien H., 1995. "Capital market imperfections and the incentive to lease," Journal of Financial Economics, Elsevier, vol. 39(2-3), pages 271-294.
    7. Bradford Cornell & Richard Roll, 1981. "Strategies for Pairwise Competition in Markets and Organizations," Bell Journal of Economics, The RAND Corporation, vol. 12(1), pages 201-213, Spring.
    8. Lewellen, Wilbur G & Long, Michael S & McConnell, John J, 1976. "Asset Leasing in Competitive Capital Markets," Journal of Finance, American Finance Association, vol. 31(3), pages 787-798, June.
    9. Flath, David, 1980. "The Economics of Short-Term Leasing," Economic Inquiry, Western Economic Association International, vol. 18(2), pages 247-259, April.
    10. Kanemoto, Yoshitsugu, 1990. "Contract types in the property market," Regional Science and Urban Economics, Elsevier, vol. 20(1), pages 5-22, June.
    11. Michael J. Brennan, 1995. "Corporate Finance Over the Last 25 Years," Financial Management, Financial Management Association, vol. 24(2), Summer.
    12. Henderson, J Vernon & Ioannides, Yannis M, 1983. "A Model of Housing Tenure Choice," American Economic Review, American Economic Association, vol. 73(1), pages 98-113, March.
    13. William B. Brueggeman & Jeffrey D. Fisher & David M. Porter, 1990. "Rethinking Corporate Real Estate," Journal of Applied Corporate Finance, Morgan Stanley, vol. 3(1), pages 39-50, March.
    14. Myers, Stewart C & Dill, David A & Bautista, Alberto J, 1976. "Valuation of Financial Lease Contracts," Journal of Finance, American Finance Association, vol. 31(3), pages 799-819, June.
    15. Lewis, Craig M. & Schallheim, James S., 1992. "Are Debt and Leases Substitutes?," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 27(4), pages 497-511, December.
    16. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
    17. Smith, Clifford W, Jr & Wakeman, L MacDonald, 1985. " Determinants of Corporate Leasing Policy," Journal of Finance, American Finance Association, vol. 40(3), pages 895-908, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Noriko Ashiya, 2015. "Determinants of Potential Seller/Lessee Benefits in Sale¡VLeaseback Transactions," International Real Estate Review, Asian Real Estate Society, vol. 18(1), pages 89-112.
    2. Arnold, Lutz G. & Babl, Andreas, 2014. "Alas, my home is my castle: On the cost of house ownership as a screening device," Journal of Urban Economics, Elsevier, vol. 81(C), pages 57-64.

    More about this item

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jre:issued:v:15:n:3:1998:p:223-238. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (JRER Graduate Assistant/Webmaster). General contact details of provider: http://www.aresnet.org/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.