WEF and NGKF Research: Real Estate Bubble Warning System
The World Economic Forum (WEF) and Newmark Grubb Knight Frank (NGKF) agreed to staff and project manage a work-stream dedicated to the development of an Early Warning System prototype for commercial real estate.
NYU Stern developed a Stern Signature Project to contribute to this research. With Professor Stijn Van Nieuwerburgh serving as a faculty sponsor, three MBA students worked on this project for the fall semester.
(Press Release)
NYU Stern developed a Stern Signature Project to contribute to this research. With Professor Stijn Van Nieuwerburgh serving as a faculty sponsor, three MBA students worked on this project for the fall semester.
(Press Release)
Project Goals:
•Can we create a model that would tell us whether we are in a real estate bubble, i.e. whether current prices have deviated unjustifiably from the fundamental value of the underlying property?
•Determine whether we can use data that we have access to in order to correctly identify a bubble in individual metros and the nation
NYU Stern Contributions:
•In order to shed light on whether the current boom is a bubble, we use data (total returns, income yields) from U.S. equity REITs and transactional data to calculate implied dividend growth expectations
Research Findings:
Implied Cash Flow Growth in U.S. Commercial Real Estate Values by Professor Stijn Van Nieuwerburgh
World Economic Forum Bubble Early Warning System Presentation by Caitlyn Dewitt, Dwane Omar Jones, and Sanam Mechkat
Understanding the Commercial Real Estate Investment Ecosystem: An Early Warning System Prototype
Prepared by the Steering and Advisory Committees of the Shaping the Future of Real Estate - Asset Price Dynamics Initiative
Understanding the Commercial Real Estate Investment Ecosystem: An Early Warning System Case Study
Prepared by the Steering and Advisory Committees of the Shaping the Future of Real Estate - Asset Price Dynamics Initiative
Infographic Commercial Real Estate Investment Ecosystem
Shaping the Future of Real Estate Asset Pricing Dynamics Project Website (all project reports)
•Can we create a model that would tell us whether we are in a real estate bubble, i.e. whether current prices have deviated unjustifiably from the fundamental value of the underlying property?
•Determine whether we can use data that we have access to in order to correctly identify a bubble in individual metros and the nation
NYU Stern Contributions:
•In order to shed light on whether the current boom is a bubble, we use data (total returns, income yields) from U.S. equity REITs and transactional data to calculate implied dividend growth expectations
Research Findings:
Implied Cash Flow Growth in U.S. Commercial Real Estate Values by Professor Stijn Van Nieuwerburgh
World Economic Forum Bubble Early Warning System Presentation by Caitlyn Dewitt, Dwane Omar Jones, and Sanam Mechkat
Understanding the Commercial Real Estate Investment Ecosystem: An Early Warning System Prototype
Prepared by the Steering and Advisory Committees of the Shaping the Future of Real Estate - Asset Price Dynamics Initiative
Understanding the Commercial Real Estate Investment Ecosystem: An Early Warning System Case Study
Prepared by the Steering and Advisory Committees of the Shaping the Future of Real Estate - Asset Price Dynamics Initiative
Infographic Commercial Real Estate Investment Ecosystem
Shaping the Future of Real Estate Asset Pricing Dynamics Project Website (all project reports)