 Beyond Index-Based Hedging: Can Real Estate Trigger a New Breed of Derivatives Market?Patrick Lecomte Journal of Real Estate Portfolio Management, 2007, vol. 13, issue 4, 345-378 Abstract: Executive Summary. As index-based real estate deriv-atives are being introduced in the United States, this pa-per questions the validity of these instruments for hedging risks involved in commercial real estate markets. It first shows that the concept of index-based derivatives may not be appropriate for intrinsically heterogeneous assets such as real estate. Based on an innovative frame-work drawn from the field of biomedical sciences, it then proposes the establishment of a radically new breed of derivatives market that would enable effective hedging of commercial real estate assets. It concludes by outlining a framework for modeling real estate risk based on ge-netics that could be used with the proposed derivatives market.This paper is the winner of the best paper on Innovative Thinking “Thinking Out of the Box” (sponsored by the Homer Hoyt Advanced Studies Institute) award pre-sented at the 2007 American Real Estate Society Annual Meeting in San Francisco, California. Date: 2007 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:repmxx:v:13:y:2007:i:4:p:345-378 Ordering information: This journal article can be ordered from DOI: 10.1080/10835547.2007.12089791 Access Statistics for this article Journal of Real Estate Portfolio Management is currently edited by Peng Liu and Vivek Sah More articles in Journal of Real Estate Portfolio Management from Taylor & Francis Journals |
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