Developers, Wall Street and Taxmen. (2017)
We propose a general equilibrium model of commercial real estate (CRE) development in a multi-jurisdictions economy with segmented commercial good and equity markets. The CRE assets' capital structures and cash flows, the prices of equity, debt, and commercial goods, and the jurisdictions' property taxes and land use policies are all endogenous. The capital structures of CRE assets in different jurisdictions are interdependent. Shocks to a developer's funding capacity, the production of a CRE asset, and a jurisdiction's property tax illustrate this result. Our model also captures the impact that global real estate markets have on local jurisdictions' fiscal policies.
Publication DateSeptember, 2017
Citation InformationMarta Faias and Jaime Luque. "Developers, Wall Street and Taxmen" . (2017)
Available at: http://works.bepress.com/luque/25/
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