Capturing UK Real Estate Volitility

Volatility, or the variability of the underlying asset, is one of the key fundamental components of property derivative pricing and in the application of real option models in development analysis. There has been relatively little work on volatility in real terms of its application to property derivatives and the real options analysis. Most research on volatility stems from investment performance (Nathakumaran & Newell (1995), Brown & Matysiak 2000, Booth & Matysiak 2001). Historic standard deviation is often used as a proxy for volatility and there has been a reliance on indices, which are subject to valuation smoothing effects. Transaction prices are considered to be more volatile than the traditional standard deviations of appraisal based indices. This could lead, arguably, to inefficiencies and mis-pricing, particularly if it is also accepted that changes evolve randomly over time and where future volatility and not an ex-post measure is the key (Sing 1998). If history does not repeat, or provides an unreliable measure, then estimating model based (implied) volatility is an alternative approach (Patel & Sing 2000). This paper is the first of two that employ alternative approaches to calculating and capturing volatility in UK real estate for the purposes of applying the measure to derivative pricing and real option models. It draws on a uniquely constructed IPD/Gerald Eve transactions database, containing over 21,000 properties over the period 1983-2005. In this first paper the magnitude of historic amplification associated with asset returns by sector and geographic spread is looked at. In the subsequent paper the focus will be upon model based (implied) volatility.Real Estate, Volatility

Real Option Pricing in Mixed-use Development Projects

The application of real options theory to commercial real estate has developed rapidly during the last 15 Years. In particular, several pricing models have been applied to value real options embedded in development projects. In this study we use a case study of a mixed use development scheme and identify the major implied and explicit real options available to the developer. We offer the perspective of a real market application by exploring different binomial models and the associated methods of estimating the crucial parameter of volatility. We include simple binomial lattices, quadranomial lattices and demonstrate the sensitivity of the results to the choice of inputs and method.

Real option pricing in mixed-use development projects

The application of real options theory to commercial real estate has developed rapidly during the last 15 Years. In particular, several pricing models have been applied to value real options embedded in development projects. In this study we use a case study of a mixed use development scheme and identify the major implied and explicit real options available to the developer. We offer the perspective of a real market application by exploring different binomial models and the associated methods of estimating the crucial parameter of volatility. We include simple binomial lattices, quadranomial lattices and demonstrate the sensitivity of the results to the choice of inputs and method

A framework for the development of a global standardised marine taxon reference image database (SMarTaR-ID) to support image-based analyses

Video and image data are regularly used in the field of benthic ecology to document biodiversity. However, their use is subject to a number of challenges, principally the identification of taxa within the images without associated physical specimens. The challenge of applying traditional taxonomic keys to the identification of fauna from images has led to the development of personal, group, or institution level reference image catalogues of operational taxonomic units (OTUs) or morphospecies. Lack of standardisation among these reference catalogues has led to problems with observer bias and the inability to combine datasets across studies. In addition, lack of a common reference standard is stifling efforts in the application of artificial intelligence to taxon identification. Using the North Atlantic deep sea as a case study, we propose a database structure to facilitate standardisation of morphospecies image catalogues between research groups and support future use in multiple front-end applications. We also propose a framework for coordination of international efforts to develop reference guides for the identification of marine species from images. The proposed structure maps to the Darwin Core standard to allow integration with existing databases. We suggest a management framework where high-level taxonomic groups are curated by a regional team, consisting of both end users and taxonomic experts. We identify a mechanism by which overall quality of data within a common reference guide could be raised over the next decade. Finally, we discuss the role of a common reference standard in advancing marine ecology and supporting sustainable use of this ecosystem

Filaggrin deficiency results in a dose-dependent impairment of the epidermal barrier in ichthyosis vulgaris

Oncogene-induced senescence acts as a barrier against tumor formation and has been implicated as the mechanism preventing the transformation of benign melanocytic lesions that frequently harbour oncogenic B-RAF or N-RAS mutations. In the present study we systematically assessed the relative importance of the tumor suppressor proteins p53, p21Waf1, pRb and p16INK4a in mediating oncogene-induced senescence in human melanocytes. We now show that oncogenic N-RAS induced senescence in melanocytes is associated with DNA damage, a potent DNA damage response and the activation of both the p16INK4a/pRb andp53/p21Waf1 tumor suppressor pathways. Surprisingly neither the pharmacological inhibition of the DNA damage response pathway nor silencing of p53 expression had any detectable impact on oncogene-induced senescence in human melanocytes. Our data indicate that the pRb pathway is the dominant effector of senescence in these cells, as its specific inactivation delays the onset of senescence and weakens oncogene-induced proliferative arrest.1 page(s