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Flexibility and Real Estate Valuation under Uncertainty
book

Flexibility and Real Estate Valuation under Uncertainty

by David Geltner, Richard de Neufville
April 2018
Intermediate to advanced content levelIntermediate to advanced
256 pages
7h 35m
English
Wiley-Blackwell
Content preview from Flexibility and Real Estate Valuation under Uncertainty

10Resale Timing Decision: Discussion: Let’s think about Additional Insights we can get from Simulation

Now that we are almost halfway through the book, it is a good time to take a break from the math and graphs and think about some of the contextual issues in using simulation to explore our alternatives for flexible management of real estate.

10.1 Sensitivity Analysis

Simulations of flexibility provide us with masses of data. We can analyze this information to gain additional insights beyond investment performance targets such as PVs and IRRs.

For example, simulation analysis allows us to see the effect of resale timing flexibility on the various metrics of investment performance. Since the simulation keeps track of when the IF statement indicates that it is desirable to sell, we can see how this flexibility affects the average holding period for the property. How frequently does the simulation say we will hold the property for more than 10 years? Or for ...

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Publisher Resources

ISBN: 9781119106494Purchase book