Major, John B. with Pan, Fung Shine (Eds.). Contemporary Real Estate Finance: Selected Readings

Abstract

Co-EditorG. Stacy SirmansCollege of BusinessFlorida State UniversityTallahassee, FL 32306 1042904-644-82 14 904-644-4077 (FAX)This section of the Journal publishes reviews on textbooks, professional books, and other scholarly books appropriate to real estate. Areas of interest include, but are not limited to, mortgage markets, real estate investments, real estate finance, asset/property management, real estate development, corporate real estate, valuation, and other areas related to real estate. If you have an interest in reviewing a particular book or if you wish to be considered as a reviewer, please contact the Co-Editor at the address noted above. A list of new books follows the book reviews; both are arranged alphabetically by author.Associate EditorsJohn D. Benjamin Mark J. EppliThe American University George Washington UniversityH. Glenn Boggs Andrea J. HeusonFlorida State University University of MiamiA. Quang Do John R. KnightSan Diego State University University of the PacificMajor, John B., with Pan, Fung-Shine (Eds.), Contemporary Real Estate Finance: Selected Readings, Prentice Hall, 1996.406 Pages.The editors have compiled an excellent selection of articles by numerous real estate experts, many of whom are noted authorities in the field of real estate. That speaks volumes about this collection of readings. The text contains twenty-seven readings of historical interest and state-of-the-art studies. These readings can be used as a supplement in upper-level undergraduate or graduate real estate finance and investment courses. It is also an ideal source of readings for undergraduate and graduate real estate seminar courses.The articles in Part 1, Introduction, focus on the development of real estate investment analysis, critical issues in real estate investment analysis and real estate portfolios. The first article, by Austin J. Jaffee and C. F. Sirmans (AREUEA, 1984), provides a review and analysis of the past, present, and future of research on real estate financial decisions. Some of the unresolved issues in real estate investment analysis such as Real Estate as an Investment, Investor Objectives, and Taxation Environment are discussed. The authors posed excellent questions for future research. It is not surprising that some of the issues remain unresolved in 1996; consequently, this article not only provides the historical development of the theory of real estate investment analysis but also presents a research agenda for the future. The timeliness and relevancy of their research agenda are reflected in subsequent articles in this text and in the body of research published since the mid- 1980s.98 BOOK REVIEWSThe second article in Part 1, Real Estate: The Whole Story by Paul M. Firstenberg, Stephen A. Ross, and Randall C. Zisler (1988), applies modern portfolio theory to real estate asset selection. The authors contend that investors should examine equity real estate investments not only on their individual merits but also for their impact on the investors overall real estate portfolio. The two modern portfolio techniques used in this paper are the capital asset pricing model (CAPM) and the arbitrage pricing theory (APT). The authors demonstrate that these techniques are just as applicable to real estate portfolio management as to security portfolio management. Their intention is to show how pension funds and other large investors can use modern portfolio techniques both to construct real estate portfolios and to allocate funds to asset categories including real estate. They begin their work by comparing total real estate returns to returns on stocks and bonds to show that real estate is an attractive asset category relative to stocks and bonds. This article provides an excellent review and application of modern portfolio theory for both undergraduate and graduate students. …