Leverage, Timing and Real Estate Performance

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• Professor Tony Key, Cass Business School
• Wednesday 07 November 2012, 16:00-17:00
• Mill Lane Lecture Room 1.

If you have a question about this talk, please contact Joanna Laver.

With equilibrium pricing of property and debt, leverage will theoretically boost expected return and risk. But the standard method of presenting the theory (in, for example, appraisals) typically fails to discuss how leverage can be managed through cycles of changing property values, and potential mis-pricing of property and debt. The presentation will use simulation methods and evidence on realised returns to investors with varying leverage to argue that, in the out-turn asymmetric timing effects and mis-pricing mean the leveraging property does not pay off in risk-adjusted return or even in absolute return.

This talk is part of the Land Economy Departmental Seminar Series series.

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• Land Economy Departmental Seminar Series
• Mill Lane Lecture Room 1

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