Characteristics of a Full-Disclosure, Transaction-Based Index of Commercial Real Estate

Posted: 28 Apr 1999

See all articles by David H. Downs

David H. Downs

Virginia Commonwealth University (VCU) - Department of Finance, Insurance & Real Estate; The Kornblau Institute

Barrett A. Slade

Brigham Young University; Independent

Abstract

This study addresses the characteristics of a transaction-based index of commercial real estate as reported in a full-disclosure market. Prior research on transaction-based indices has enumerated various shortcomings for commercial real estate markets. This study circumvents many of these problems by using a large data set of commercial property transactions obtained for the Phoenix, Arizona metropolitan statistical area. The empirical analysis demonstrates that investors stand to gain considerable insight by comparing full-disclosure, transaction-based indices with voluntary-disclosure, appraisal-based indices. The results suggest that full-disclosure indices avoid some of the institutional biases associated with other benchmarks of commercial real estate performance. In addition, some public policy issues emerge on the role of state mandated disclosure rules.

JEL Classification: R33

Suggested Citation

Downs, David H. and Slade, Barrett A. and Slade, Barrett A., Characteristics of a Full-Disclosure, Transaction-Based Index of Commercial Real Estate. Available at SSRN: https://ssrn.com/abstract=153009

David H. Downs (Contact Author)

Virginia Commonwealth University (VCU) - Department of Finance, Insurance & Real Estate ( email )

Richmond, VA 23284-4000
United States

The Kornblau Institute ( email )

Richmond, VA 23284-4000
United States

Barrett A. Slade

Brigham Young University ( email )

Marriott School 618 TNRB
Provo, UT 84602
United States
801-472-2082 (Phone)
801-472-2082 (Fax)

Independent

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