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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

13Option Dichotomies: We Introduce a Typology of Flexibility in Development Projects

This chapter suggests some ways to think generally about options in real estate development projects. Specifically, we present a three‐way typology to place these options into an overall context.

13.1 Three Dichotomies for Thinking Generally about Development Options

As we noted in Chapter 3, the terms “flexibility” and “option” overlap considerably in the context of this book. Developers have certain types of flexibilities that do not fit the technical economics definition of an “option.” An example is the resale timing flexibility of an existing property we explored quantitatively in Chapter 9. But we can view most of the types of development flexibility that we focus on in this book as options, at least conceptually, pretty much as we defined them in Section 12.1.

At this stage, we introduce three general ways to think about options in development projects. The idea is to help us think about what we can use options for, how we ...

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Publisher Resources

ISBN: 9781119106494Purchase book