TY - JOUR
T1 - Determinants of cross-sectional variation in discount rates, growth rates and exit cap rates
AU - Hoesli, Martin Edward Ralph
AU - Hendershott, Patric Henry
AU - Gunnelin, A.
AU - Soderberg, B.
PY - 2004
Y1 - 2004
N2 - This study investigates the determinants of key input variables in valuers' discounted cash flow models used for estimating market values for offices. Data from 599 valuations in 2000 from Stockholm, Gothenburg and Malmo are used to explain variation in discount rates, expected growth rates in net operating income and exit cap rates. Our ability to explain the relatively wide variation in appraisal assumptions with plausible covariates generates confidence in the appraisal process. This has important implications because most value and returns indices of commercial real estate worldwide are appraisal based.
AB - This study investigates the determinants of key input variables in valuers' discounted cash flow models used for estimating market values for offices. Data from 599 valuations in 2000 from Stockholm, Gothenburg and Malmo are used to explain variation in discount rates, expected growth rates in net operating income and exit cap rates. Our ability to explain the relatively wide variation in appraisal assumptions with plausible covariates generates confidence in the appraisal process. This has important implications because most value and returns indices of commercial real estate worldwide are appraisal based.
U2 - 10.1111/j.1080-8620.2004.00090.x
DO - 10.1111/j.1080-8620.2004.00090.x
M3 - Article
SN - 1080-8620
VL - 32
SP - 217
EP - 237
JO - Real Estate Economics
JF - Real Estate Economics
IS - 2
ER -