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A STRUCTURAL MODEL FOR NET RENTAL INCOME IN THE U.S. LEASING INDUSTRY

Gustavo Gomez-Sorzano

Regional and Sectoral Economic Studies, 2007, vol. 7, issue 1, 67-80

Abstract: I estimate a theoretically and statistically satisfying model to account for Net Rental Income (NRI) for one of the largest Real Estate Investment Trust companies (REIT) in the U.S. I claim that I have found an accurate method to forecasts the direction and dollar amount of NRI in the apartment industry in The U.S. that can be extended to the remaining branches of the leasing industry. The variables that together account for ninety seven percent of the variation in NRI for this apartment company are, one-period time lag of lease renewals, the Federal Funds interest rate end of month, total gross potential of the company, total concessions, two-period time lag of move-ins, the ratio between total non-farm employment and total construction permits authorized, the inventory of houses in the U.S, one-period time lag of move-outs and this REIT apartment units occupied.

Keywords: REIT; Net Rental Income (NRI); demand for lease renewals (search for similar items in EconPapers)
JEL-codes: C22 C51 C53 R21 (search for similar items in EconPapers)
Date: 2007
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