Determinants of Cross-Sectional Variation in Discount Rates, Growth Rates, and Exit Cap Rates

Åke Gunnelin (), Patric Hendershott, Martin Hoesli and Bo Söderberg ()
Additional contact information
Åke Gunnelin: Stockholm Institute for Financial Research
Bo Söderberg: Royal Institute of Technology, Stockholm

FAME Research Paper Series from International Center for Financial Asset Management and Engineering

Abstract: This study investigates the determinants of key input variables in valuers’ DCF models used for estimating market values for offices. Data from 599 valuations in 2000 from Stockholm, Gothenburg and Malmö 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 co-variates generates confidence in the appraisal process. This has important implications because most value and returns indices of commercial real estate world-wide are appraisal-based.

Keywords: Real Estate Appraisal; DCF; Discount Rates; Capitalization Rates (search for similar items in EconPapers)
JEL-codes: R33 (search for similar items in EconPapers)
Date: 2003-09
New Economics Papers: this item is included in nep-geo
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.swissfinanceinstitute.ch/rp90.pdf
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.swissfinanceinstitute.ch/rp90.pdf [301 Moved Permanently]--> https://www.sfi.ch/rp90.pdf [302 Found]--> https://www.sfi.ch/en/rp90.pdf)

Related works:
Journal Article: Determinants of Cross‐Sectional Variation in Discount Rates, Growth Rates and Exit Cap Rates (2004)
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: https://EconPapers.repec.org/RePEc:fam:rpseri:rp90

Access Statistics for this paper

More papers in FAME Research Paper Series from International Center for Financial Asset Management and Engineering Contact information at EDIRC.
Bibliographic data for series maintained by Ridima Mittal ().