Grading criteria: Each problem is worth 10 points.
Below is the rubric I will be using when grading your solutions to each problem:
|I expect to see the following:||0 points||1 point||2 points|
|Show correct numerical answer||Incorrect||Numerical answer is incorrect because of a typo somewhere in the calculations
Numerical answer is correct but only in some intermediate steps
|Show correct formulas||Not shown||Shown for some, but not all, steps||Shown for all steps|
|Show correct numbers that go into the formulas||Not shown||Shown for some, but not all, steps||Shown for all steps|
|Brief verbal explanation: why you’re doing what you’re doing in each step||Not shown||Shown for some, but not all, steps||Shown for all steps|
|Appearance||Hand-written||Partially hand-written and partially typed||Typed|
You are offered an investment that guarantees to pay you back $200 per month for the next 5 years. The annual rate of return for similar investments is 12%. What is the most you should be willing to pay for it today?
(2 + 2 + 2 + 2 + 2 = 10 points)
(1 + 1 + 1 + 0 + 2 = 5 points)
The questions in this homework are based on data that I would like you to get from the following three websites: (1) Simon Property Group (www.simon.com), (2) US Census Bureau (www.census.gov), and (3) Bureau of Labor Statistics (www.bls.gov).
For each question, show in your write-up all numbers you are working with, and explain all relevant calculations. Take a screen-shot, etc. of the website from which your data was downloaded, so I can verify your numbers, and include in your uploaded document.
Problem #1 (10 points)
Simon Property Group (www.simon.com) is one of the largest real estate companies in the world which in particular owns hundreds of shopping centers in the US as well as overseas.
- Pick one of their shopping centers in California. On the website find and summarize in your write-up information for:
- Mall type
- Main anchors
- Size of, and information on, trade-area resident population
- Size of, and information on, trade-area non-resident population
- Main competitors in the trade area that the website gives
- Using “Reilly’s Law of Retail Gravitation” calculate the break-point distance for your shopping center in part (a) relative to the nearest Simon Property Group shopping center. Use GLA sizes for “populations” in the formula. What does the result tell you? Explain.
Problem #2 (10 points)
For Los Angeles metropolitan statistical area calculate the Actual Sales Index for personal care products and services based on the most recent available data. For the data use the US Census’ FactFinder “Advanced Search”, select the right geographies and the right NAICS retail category. In addition, for the same year, for the same geography calculate the Spending Potential Index for personal care products and services. For the data go to the Bureau of Labor Statistics website, in the search line type “Consumer Expenditure Survey” (CEX). On the new page, on the left under “geography” you can then select the right geography.
Do your results suggest “leakage” or “inflow” of consumer spending in Los Angeles MSA? Explain. How can this finding be used in real estate market studies?