New Frontiers in Real Estate Finance: The Rise of Micro Markets

This book explores three innovative concepts in real estate finance: factorization, digitalization, and tokenization. It discusses the use of factor-based real estate derivatives to mitigate risk, the digitalization of commercial real estate through smart technologies, and the emergence of 'digital rights' or property rights for smart buildings. It also proposes the tokenization of commercial real estate as an alternative to securitization. The book emphasizes how these innovations can transform the commercial real estate industry and lead to the development of smart economies.

Format: Hardback
Length: 194 pages
Publication date: 04 June 2021
Publisher: Taylor & Francis Ltd

This book delves into three groundbreaking concepts and the financial instruments associated with them that have the potential to revolutionise the realm of real estate finance. The first concept explored is the factorisation of commercial real estate, which involves the use of factor-based real estate derivatives. In-depth academic references are provided to address methodological issues related to factors in real estate risk analysis.

The book then shifts its focus to the digitalisation of commercial real estate. The environment in which buildings operate is undergoing a rapid transformation. Cities that were once composed of inanimate architectural structures are evolving into digital entities, acquiring digital skins and becoming increasingly intelligent. Smart technologies applied to the built environment are fundamentally altering the role of buildings in cities and their interactions with their occupants.

To address this evolving landscape, the book introduces the concept of smart space. It examines the emergence of 'digital rights or property rights for smart buildings in smart environments.' It proposes concepts and methods for identifying, pricing, and trading these new property rights, which are expected to dominate the commercial real estate sector in the future.

Lastly, the book explores the tokenisation of commercial real estate. Tokenisation, sometimes referred to as an alternative to securitisation, is a novel financial engineering tool applied to real assets. The book suggests two innovative applications of tokenisation: private commercial real estate index tokenisation and data tokens for smart buildings.

Through factorisation, digitalisation, and tokenisation, commercial real estate emerges as a forefront of innovation. The unique characteristics of real estate, stemming from its physicality, unlock new ways of thinking that have the potential to profoundly impact other asset classes by paving the way.

Weight: 476g
Dimension: 159 x 242 x 20 (mm)
ISBN-13: 9780367361433