Graduation Year
2015
Date of Submission
12-2014
Document Type
Campus Only Senior Thesis
Degree Name
Bachelor of Arts
Department
Economics
Reader 1
Fan Yu
Terms of Use & License Information
Rights Information
© 2014 Braden R. Crockett
Abstract
I present an empirical model that is based upon the findings of both the conceptual and empirical models of previous research. I first control for independent property, location, macroeconomic and capital market specific variables on the dependent variables that takes on the form of both the cap rate and sales price. Next I introduce two new variables that represent the transaction constraint and the default risk of the tenant. I find that the variable market which represents the time an individual property is on the market is statistically significant and has a negative coefficient of when regressed on sales price and a positive coefficient when regressed on the cap rate. When the market variable is further broken into bins, I found that the time on the market does not negatively impact a property unless it is in fact on the market for over 2 years. When the variable representing a tenant’s default risk is regressed on the cap rate I found the tenants probability of default to be statistically significant with a negative coefficient. This result is counter intuitive and most likely represents the data set being controlled for investment grade credit rated tenants.
Recommended Citation
Crockett, Braden R., "The Impact of Tenants Default Risk and Transactional Variables on Value: An Empirical Model of Single Tenant Net Leased Retail Assets" (2015). CMC Senior Theses. 1055.
https://scholarship.claremont.edu/cmc_theses/1055
This thesis is restricted to the Claremont Colleges current faculty, students, and staff.
