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Clientele Effects and Condo Conversions |
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| Authors: | John D Benjamin Peter Chinloy William G Hardin III and Zhonghua Wu |
| Institution: | Kogod School of Business, American University, Washington, DC 20016 or .;Kogod School of Business, American University, Washington, DC 20016 or .;Department of Finance and Real Estate, Florida International University, Miami, FL 33199 or .;Department of Finance and Real Estate, Florida International University, Miami, FL 33199 or . |
| Abstract: | During an asset boom a property can develop a new usage. Appreciation investors emerge to change a property's occupant mix or letter grade. Rental investors not intending to change the mix or grade are outbid. Sellers receive a capitalized premium from the new type of bidder. For apartments in Miami-Fort Lauderdale during 2004–2006, there is an asset pricing premium from condo converters. The price of real estate depends on clienteles in addition to characteristics. |
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