An integrated analytical framework : guidelines for commercial real estate investment management

Abstract

This thesis introduces an Integrated Analytical Framework that provides guidelines on mapping the analysis structure and reporting essentials for the commercial real estate ("CRE") investment with coverage from Acquisition Management, Development Management, Asset Management to Divestment. The motivation of this thesis responds to the need that small-scale Private Equity Real Estate ("PERE") firms have for efficient, comprehensive, and streamlined tools to manage investment assets. There are two purposes of this thesis. First, it is to introduce an analytical framework, integrating the entire lifecycle of a commercial real estate investment. From a quantitative analytical perspective, the framework introduces Key Performance Indicators that CRE investors should rely on to understand the expected performance of their investments. Second, it is to help CRE investors achieve analytical efficiency. A model template, in Microsoft Excel, is developed here to translate the framework into a practical tool. This thesis serves as a practical manual for small-scale PERE firms and real estate entrepreneurs who have limited resources and possess strong desires for a streamlined but comprehensive analytical tool to fulfill their investment management demands. This thesis focuses on both asset-level and portfolio-level investment analyses. While the asset-level perspective intends to be micro-level analysis and emphasizes the detail of every aspect of the asset, the portfolio-level analysis consolidates the asset fundamentals and provides a bird's-eye view of the entire investment lifecycle. This thesis contains a supplemental Excel file The Integrated Analytical Framework Model Template that can be obtained from DSpace@MIT with the persistent identifier: https://hdl.handle.net/1721.1/126014.