This article is a theoretical examination of optimal leverage to maximize the value of an investment asset, assuming that the interest rate on loans increases with leverage. The expected rate of return to equity for the investing firm (that is subject to taxation at the entity level) and market...

This article presents a monthly vector autoregressive (VAR) model of housing prices, the federal funds rate, foreclosures, the unemployment rate and the mortgage interest rate for the United States for the period of 2000(1)--2010(8). Impulse response functions show that negative shocks to the...

This article shows that, because real estate investors borrow at an interest rate that is greater than the rate at which they can lend, the reservation value of real estate investments declines with the amount borrowed. The proof is a modified version of the home-made leverage examples...

The article presents a model of the market for commercial or industrial real estate at the local level that is used to derive an equation for the property tax rate that maximizes tax revenue - given that demand for real estate at the local level is highly elastic and capital is mobile in the...