Managing Real Estate Exposure: An Empirical Analysis on Interest Rate Risk

摘要: Real estate is an illiquid investment with cyclical returns, so risk management techniques should be used for sustainable returns. The include asset based, portfolio, insurance and derivatives solutions. Asset based solutions the character of real estate, on where it’s located how well it developed. Some property such as foreclosure those require maintenance riskier than others. Portfolio allow companies to different location segments office retail. Using this, limited systematic component, based-idiosyncratic tried reduced when included enough number assets basket. capable determining which risks taking transfer. earthquake, fire, vehicle crush, terrorist activities are rare in nature but can cause severe damage takes place. policies cover these events most time reinsured. In addition available hedge some risks. These traded market or over-the-counter. By using possible interest rate risk, inflation, currency risks, price changes. To also studied this paper, instruments cap, swap, collar available. research investigating role performance companies. variables 30 years treasury yield, exchange closing CBRE Group Inc., Colliers International Group, Jones Lang LaSalle Incorporated. data daily period 16 June 2004 19 2015. methods Johansen Cointegration Granger Causality. results study indicate there a short-run long-run relationship between firm stock performance. other words, fluctuation critical discussed mitigation ideas controlling that industry exposed.