Allen, Marcus T; Buttimer, Richard J; Waller, Neil G - In: The Journal of Real Estate Finance and Economics 10 (1995) 3, pp. 271-83
This paper argues that security clauses in lease contracts create a contingent claim on the value of the leased property, which resembles a put option on common stock. Adapting the standard results from option pricing theory gives insight into how landlords determine security deposit amounts,...