Leasing Versus Purchase of Corporate Real Property: Leases with Residual Equity Interests
This article reports the informal research findings from personal interviews with more than thirty corporate real estate executives in regard to leasing corporate operating space while retaining an equity interest in the residual value of the leased property. There appears to be general agreement among "excellent" corporate real estate executives that occupancy costs can often be reduced through leases with equity interests below what is generally possible with either (1) a straight lease of space or (2) an outright purchase (i.e., borrow to buy). Four reasons discussed with corporate real estate executives for the increasing use of leases with residual equity interests are reviewed. Finally, theoretical support is suggested for why such leases, rather than being just the outgrowth of the current corporate space glut, may actually reflect a long-term trend in the way large companies "finance" operating space needs.
Volume (Year): 6 (1991)
Issue (Month): 1 ()
|Contact details of provider:|| Postal: American Real Estate Society Clemson University School of Business & Behavioral Science Department of Finance 401 Sirrine Hall Clemson, SC 29634-1323|
Web page: http://www.aresnet.org/
|Order Information:|| Postal: Diane Quarles American Real Estate Society Manager of Member Services Clemson University Box 341323 Clemson, SC 29634-1323|
Web: http://pages.jh.edu/jrer/about/get.htm Email:
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Long, Michael S., 1977. "Leasing and the Cost of Capital," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 12(04), pages 579-586, November.
- 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.
- Johnson, Robert W & Lewellen, Wilbur G, 1972. "Analysis of the Lease-or-Buy Decision," Journal of Finance, American Finance Association, vol. 27(4), pages 815-23, September.
- 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 787-98, June.
When requesting a correction, please mention this item's handle: RePEc:jre:issued:v:6:n:1:1991:p:79-86. 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)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 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.