The Optimal Time of Renovating a Mall

K.C. Wong and George Norman ()
Additional contact information
K.C. Wong: Department of Surveying University of Hong Kong Pokfulam Road Hong Kong, http://www.hku.hk/

Journal of Real Estate Research, 1994, vol. 9, issue 1, pages 33-48

Abstract: This paper presents a maximization model determining the optimal time at which a mall should be renovated. The analysis is constructed on the assumption of a decreasing rental income over time as a mall ages. It is then shown that the optimal renovation period achieves a balance between the marginal cost and benefits of delaying renovation. We show how this balance is affected by changes in the discount rate, net rental incomes, and renovation costs. Numerical simulations are used to demonstrate the method of estimating this optimal renovation time and to illustrate the sensitivity of the optimal renovation period to changes in economic factors such as the discount rate, the level and rates of change of renovation costs and rental incomes.

JEL-codes: L85 (search for similar items in EconPapers)
Date: 1994
View list of references View citations in EconPapers

Downloads: (external link)
http://aux.zicklin.baruch.cuny.edu/jrer/papers/pdf/past/vol09n01/v09p033.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:jre:issued:v:9:n:1:1994:p:33-48

Ordering information: This journal article can be ordered from
Diane Quarles American Real Estate Society Manager of Member Services Clemson University Box 341323 Clemson, SC 29634-1323
http://aux.zicklin.b ... u/jrer/about/get.htm

Access Statistics for this article

Journal of Real Estate Research is edited by Dr. Ko Wang

More articles in Journal of Real Estate Research from American Real Estate Society
Address: American Real Estate Society Clemson University School of Business & Behavioral Science Department of Finance 401 Sirrine Hall Clemson, SC 29634-1323
Series data maintained by JRER Graduate Assistant/Webmaster ().