IDEAS home Printed from https://ideas.repec.org/a/jre/issued/v9n11994p33-48.html
   My bibliography  Save this article

The Optimal Time of Renovating a Mall

Author

Abstract

This paper presents a maximization model determining the optimal time at which a mall should be renovated. The analysis is constructed on the assumption of a decreasing rental income over time as a mall ages. It is then shown that the optimal renovation period achieves a balance between the marginal cost and benefits of delaying renovation. We show how this balance is affected by changes in the discount rate, net rental incomes, and renovation costs. Numerical simulations are used to demonstrate the method of estimating this optimal renovation time and to illustrate the sensitivity of the optimal renovation period to changes in economic factors such as the discount rate, the level and rates of change of renovation costs and rental incomes.

Suggested Citation

  • K.C. Wong & George Norman, 1994. "The Optimal Time of Renovating a Mall," Journal of Real Estate Research, American Real Estate Society, vol. 9(1), pages 33-48.
  • Handle: RePEc:jre:issued:v:9:n:1:1994:p:33-48
    as

    Download full text from publisher

    File URL: http://pages.jh.edu/jrer/papers/pdf/past/vol09n01/v09p033.pdf
    File Function: Full text
    Download Restriction: no

    References listed on IDEAS

    as
    1. Clarke, Harry R. & Reed, William J., 1988. "A stochastic analysis of land development timing and property valuation," Regional Science and Urban Economics, Elsevier, vol. 18(3), pages 357-381, August.
    2. Anderson, John E., 1986. "Property taxes and the timing of urban land development," Regional Science and Urban Economics, Elsevier, vol. 16(4), pages 483-492, November.
    3. Arnott, Richard J & Lewis, Frank D, 1979. "The Transition of Land to Urban Use," Journal of Political Economy, University of Chicago Press, vol. 87(1), pages 161-169, February.
    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. John Corgel, 2007. "Technological Change as Reflected in Hotel Property Prices," The Journal of Real Estate Finance and Economics, Springer, vol. 34(2), pages 257-279, February.
    2. repec:eee:joreco:v:21:y:2014:i:4:p:610-618 is not listed on IDEAS

    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:9:n:1:1994:p:33-48. 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.