Skip to Main Content
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

14Product Options in Development: We Discuss Three types of Product Options

This chapter introduces you to three types of flexibilities concerning the scale or type of products (buildings) that development projects produce. These concern horizontal and vertical expansion, and flexibility in the mix of product.

14.1 Concept of Base Plan

In general, expansion options reflect the ability of the developer to add an additional quantity of built space to a “base plan” of the project. The base plan refers to the initial plan for the complete project, what the developer intends to build with a high degree of commitment. It is the reference point for our analyses.

For definitional clarity and analytical convenience, we focus on the notion of expansion options as being those that enable developers to add more total real estate product (greater amounts of built space), beyond that in the base plan.

Developers may, of course, exercise flexibility to abandon parts of the base plan. This possibility, a type of defensive option, is inherently part of the way we define the production timing options to be described in Chapter 15.

Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
and much more.
Start your free trial

You might also like

The Taxable Investor's Manifesto

The Taxable Investor's Manifesto

Stuart E. Lucas
Contextual Pricing: The Death of List Price and the New Market Reality

Contextual Pricing: The Death of List Price and the New Market Reality

Robert Docters, Michael Barzelay, John G. Hanson, Cecilia Nguyen

Publisher Resources

ISBN: 9781119106494Purchase book