Scott Frayn

Publication Date

1-1-2010

Document Type

Dissertation/Thesis

First Advisor

Karlson, Stephen H.

Degree Name

B.S. (Bachelor of Science)

Legacy Department

Department of Economics

Abstract

I analyze the viability of planned construction as a leading indicator to commercial price appreciation through application of fundamental economic principles, and linear regression. My experience as a commercial real estate appraiser has brought me to suspect that the commercial real estate market is a thinly traded market where information asymmetries are common, and exploitation opportunities may exist. The potential leading indicators that I analyze are the Architectural Billing Index (ABI), building permits, housing starts, and the combination of all three. The regression analysis results in strong correlations between each leading indicator and commercial appreciation. The strong correlations lead me to believe that the current commercial real estate market is not a perfectly competitive market, and arbitrage opportunities may currently exist for investors who are able to analyze the market using leading indicators, and quickly enter or exit the market.

Comments

Includes bibliographical references.

Extent

23 pages

Language

eng

Publisher

Northern Illinois University

Rights Statement

In Copyright

Rights Statement 2

NIU theses are protected by copyright. They may be viewed from Huskie Commons for any purpose, but reproduction or distribution in any format is prohibited without the written permission of the authors.

Media Type

Text

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