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Retail Leasehold Interests: A Contingent Claim Analysis
Author(s) -
Chiang Raymond,
Lai TsongYue,
Ling David C.
Publication year - 1986
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/1540-6229.00384
Subject(s) - leasehold estate , lease , value (mathematics) , economics , asset (computer security) , actuarial science , microeconomics , dual (grammatical number) , financial economics , business , finance , computer science , art , computer security , literature , machine learning , political science , law
This paper develops a contingent claim model to analyze certain aspects of retail leasehold contracts. The approach allows for the explicit consideration of risk without any ad hoc risk adjustment. Both “straight” leases and “percentage” leases are examined with the value of sales as the underlying asset. Each lease value is expressed as a combination of options on sales. The effects of the lease value's determinants and equilibrium risk measurements are also analyzed.