Title page for ETD etd-06122006-154814


Type of Document Dissertation
Author Hayunga, Darren Keith
Author's Email Address dhayun1@lsu.edu
URN etd-06122006-154814
Title Spatial Diversification, Dividend Policy, and Credit Scoring in Real Estate
Degree Doctor of Philosophy (Ph.D.)
Department Finance (Business Administration)
Advisory Committee
Advisor Name Title
R. Kelley Pace Committee Chair
Clifford Stephens Committee Member
David M. Brasington Committee Member
V. Carlos Slawson Committee Member
Wes Harrison Dean's Representative
Keywords
  • spatial diversification
  • credit scoring
  • dividend policy
  • real estate
Date of Defense 2006-05-10
Availability unrestricted
Abstract
Built on the foundation of economic principles, real estate offers many pursuits of academic discovery within the realm of finance. This dissertation examines three areas of real estate finance. In the first chapter, I use the unique real estate characteristics of heterogeneity, immobility, and localized markets to examine the spatial aspects of large-scale commercial real estate portfolios. The results demonstrate a clear need for portfolio managers to diversify properties based upon distances between properties. The second chapter examines another large-scale real estate portfolio, the real estate investment trust, which is held by investors seeking dividend income. Despite the importance of dividend payouts to investors, current real estate literature does not fully explain the dividend policy of REITs. I find that REITs base dividend payouts on contemporaneous earnings, the level of dividends paid last period, and firm volatility. For real estate investors that desire income based upon debt instruments, the last chapter examines the prepayment and default of mortgage instruments using credit scoring. I address the research question of how credit scoring affects mortgage pricing. The findings indicate a need to include credit scores as a state variable in a mortgage option pricing model. Overall, each chapter furthers our understanding of real estate finance.
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