Monday, June 05, 2006
Unexpectedly Low Rates of Return for Real Estate
In the Journal of Portfolio Management, Special Issue (2005): 32-45, Jeffrey D. Fischer and William N. Goetzmann analyze real estate returns by calculating internal rates of return (IRRs) using actual property sales records.
The IRRs they observed ranged by property type from 7.5% to 9.9%.
That's much lower than the Korpacz or RERC surveys would lead one to expect. How come?
(I read about this in the CFA Digest (May 2006))
In the Journal of Portfolio Management, Special Issue (2005): 32-45, Jeffrey D. Fischer and William N. Goetzmann analyze real estate returns by calculating internal rates of return (IRRs) using actual property sales records.
The IRRs they observed ranged by property type from 7.5% to 9.9%.
That's much lower than the Korpacz or RERC surveys would lead one to expect. How come?
(I read about this in the CFA Digest (May 2006))
# posted by K @ 8:19 PM 
