Acknowledgments vii About the Author xiii PREFACE xvii Part I Introduction to Real Estate and Risk 1 1 Who Should Read This Book, and Why? 3 Q&A: Interview with Danel Neidich, CEO and Founder, Dune Capital Management and former Goldman Sachs Partner 10 2 Statistics, Monte Carlo, Bayes Rule, Stochastic Arithmetic, and Uncertain Attributes 13 Q&A: Interview with Professor Joseph L. Pagliari, Jr., John Mazarakis and Chicago Atlantic Clinical Professor of Real Estate, The University of Chicago 47 Part II The Building Blocks: Public, Private, Equity, and Debt 51 3 What Is Real Estate? Leases, Buildings, and Cities 53 Q&A: Interview with Michael Fascitelli, Chairman, MDF Capital 62 4 The Capital Stack, Optimal Leverage, WACC, and Mortgage Default 65 Q&A: Interview with Michael Giliberto, Co-Creator of the Giliberto-Levy Indexes; formerly senior portfolio manager at J. P. Morgan; and currently serving on corporate and pension fund boards 79 5 The Lease: An Options Approach and Upward-Only Adjusting Leases 81 Q&A: Interview with Doug Lyons, Managing Principal, Pearlmark 99 6 The Real Estate Quadrants: Interdependent and Predictive 101 Q&A: Interview with Ethan Penner, Chairman, MOSAIC 139 7 Property: The Macroeconomics of Performance and Risk 141 Q&A: Interview with Owen Thomas, Chairman and CEO, BXP, Inc. 152 8 Office Property: COVID-19, Obsolescence, Work From Home (WFH), and Conversions 155 Q&A: Interview with John Sischo, Managing Principal, Coretrust Capital Partners, LLC 185 9 Risk Analysis in Practice: Retail, Self-Storage, and Housing 187 Q&A: Interview with Benjamin Shibe Macfarland III, CEO, SROACapital.com, LLC 199 Part III Performance Analysis, Risk, and Popular Myths 201 10 Asset Allocation, with and without Liabilities, and Shortfall Constraints 203 Q&A: Interview with Sonny Kalsi, Co-CEO, BGO 250 11 Optimal Development: Linkage, the Internal Cost of Capital, and Risk 253 Q&A: Interview with Steve Wechsler, President and CEO of National Association of Real Estate Investment Trusts 276 12 Cap Rates and Hidden Information: Avoiding Traps with Caps 279 Q&A: Interview with Steve Rosenberg, Founder and CEO, Greystone 313 13 Liquidity: Turnover, MSA Liquidity, and Investment Horizon 315 Q&A: Interview with Ron Havner, Chairman of Public Storage and Chairman Emeritus of Shurgard 340 14 Is Real Estate an Effective Inflation Hedge? Only in the Long Run 343 Q&A: Interview with Jason Benderly, President, Benderly Economics and former Chief Economist of Goldman Sachs 371 15 A Monte Carlo Model of GP and LP Interests in a Structured Joint Venture 373 Q&A: Interview with Ralph Rosenberg, Chairman of Real Assets, KKR 391 Part IV The Public Sector and Collective Risk 393 16 Public-Sector Risk: Introduction to Sprawl and Rent Control 395 Q&A: Interview with Matthew Zisler, Senior Managing Director, Greystone 401 17 Sprawl: An Options Perspective 403 Q&A: Interview with Daniel Cummings, Managing Director, Bain Capital 410 18 Rent Control Redux: Prediction, Assessment, and Opportunity 413 Q&A: Interview with Aly Worthington, Head of Capital Markets, Summit Development 425 Part V Behavioral Bias, Investment Risk, and An Investor''s Guide 427 19 Cognitive Errors, Picking Winners, and the Risk of Overpaying 429 Q&A: Interview with Susan Stupin, Managing Director, Prescott Holdings, LLC; The Prescott Group, LLC 446 20 Underfunded Public Pension Funds, Risk, and Alternatives 449 Q&A: Interview with Richard F. Burns, Senior Advisor & Trustee, The NHP Foundation 460 21 Investor''s Checklist and Conclusions 463 Q&A: Interview with Russell Platt, Co-Founder and CEO of Forum Partners 469 Notes 471 Index 477.