A real options case study : The valuation of flexibility in the World Trade Center redevelopment
Author(s)Cailao, Alberto P
Valuation of flexibility in the World Trade Center redevelopment
Massachusetts Institute of Technology. Center for Real Estate. Program in Real Estate Development.
MetadataShow full item record
This thesis will apply the past research and methodologies of Real Options to Tower 2 and Tower 3 of the World Trade Center redevelopment project in New York, NY. The qualitative component of the thesis investigates the history behind the stalled development of Towers 2 and 3 and examines a potential contingency that could have mitigated the market risk. The quantitative component builds upon that story and creates a hypothetical Real Options case as a framework for applying and valuing building use flexibility in a large-scale, politically charged, real estate development project. Through this demonstration, it is observed that applying Real Options "in" the World Trade Center Towers 2 and 3 projects minimizes losses in weaker markets and maximizes gains in stronger markets.
Thesis (S.M.)--Massachusetts Institute of Technology, Program in Real Estate Development in Conjunction with the Center for Real Estate, 2009.This electronic version was submitted by the student author. The certified thesis is available in the Institute Archives and Special Collections.Cataloged from student submitted PDF version of thesis.Includes bibliographical references (p. 53-54).
DepartmentMassachusetts Institute of Technology. Center for Real Estate. Program in Real Estate Development.; Massachusetts Institute of Technology. Center for Real Estate
Massachusetts Institute of Technology
Center for Real Estate. Program in Real Estate Development.