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Past and Future Sources of Commercial Real Estate Returns



Historical commercial real estate returns are attributed to three fundamental factors: initial current yield, growth in net operating income, and changes in going-in versus going-out capitalization rates (i.e., pricing movements). Separating returns into these three factors appears to provide more insightful information than the traditionally reported income and appreciation returns. Using this three-factor model, a two-dimensional matrix of projected ten-year real yields is estimated for each major type of commercial real estate.

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  • Joseph L. Pagliari, Jr. & James R. Webb, 1992. "Past and Future Sources of Commercial Real Estate Returns," Journal of Real Estate Research, American Real Estate Society, vol. 7(4), pages 387-422.
  • Handle: RePEc:jre:issued:v:7:n:4:1992:p:387-422

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    References listed on IDEAS

    1. David J. Hartzell & James R. Webb, 1988. "Real Estate Risk and Return Expectations: Recent Survey Results," Journal of Real Estate Research, American Real Estate Society, vol. 3(3), pages 31-37.
    2. Roger G. Ibbotson & Laurence B. Siegel, 1984. "Real Estate Returns: A Comparison with Other Investments," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 12(3), pages 219-242.
    3. David J. Hartzell & David G. Shulma & Vice President, 1987. "Refining the Analysis of Regional Diversification for Income-Producing Real Estate," Journal of Real Estate Research, American Real Estate Society, vol. 2(2), pages 85-95.
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    Cited by:

    1. Gaetano Lisi, 2015. "Use of Hedonic Prices to Estimate Capitalization Rate," International Real Estate Review, Asian Real Estate Society, vol. 18(3), pages 303-316.
    2. Joseph L. Pagliari, Jr. & James R. Webb & Todd A. Canter & Frederich Lieblich, 1997. "A Fundamental Comparison of International Real Estate Returns," Journal of Real Estate Research, American Real Estate Society, vol. 13(3), pages 317-348.

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    JEL classification:

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


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