Opportunistic real estate investors need global perspective

Quantifying office cap-rate risk factors can determine the hurdle rates across countries. This article attempts to quantify such risk factors and then to produce hurdle rates across countries with those risk factors. An array of variables are looked at that may affect hurdle rates of return on real estate, and estimate a two-equation model that attempts to explain both economic and real estate market risk using a subset of these variables. The results are discussed.