Essays on Reputation and Capital Expenditure in Real Estate.
Open Access
- Author:
- Garate Alvarez, Sergio Rodolfo
- Graduate Program:
- Business Administration
- Degree:
- Doctor of Philosophy
- Document Type:
- Dissertation
- Date of Defense:
- June 05, 2018
- Committee Members:
- Brent Ambrose, Dissertation Advisor/Co-Advisor
Brent William Ambrose, Committee Chair/Co-Chair
Jiro Yoshida, Committee Member
Liang Peng, Committee Member
Peter William Newberry, Outside Member
Austin Jaffe, Special Member - Keywords:
- real estate
capital expenditure
consumer reviews
real option
prepayment model
default model
competing risk model - Abstract:
- Real estate has multiple real options embedded, which include managers’ decisions to prepay a loan, delay investment, or expand or close sections of a building. The option to invest in capital improvement in a building is also a real option and understanding what triggers such improvements is critical to the industry. The following essays relate to three areas in real estate. In the first essay, I develop a real option model to address the impact an alternative use of a property and its market conditions on capital expenditures. I show using actual building capital expenditure information how alternative use market conditions affect improvement decision of an operating building. In the second essay, I analyze how online reputation systems affect the decision to invest in building improvements. I use online consumer reviews to show that reputation affects capital improvement decisions and I also provide evidence that capital expenditures improve the building’s reputation. In the final essay, I create an index using consumer-generated content and show that the index is a substantial source of information for managers to include in prepayment and default models.