Admiral's Field Notes Series - REITs and Rental Real Estate by Victor S Yeung

Author:Victor S Yeung [Yeung, Victor S]
Language: eng
Format: azw3
Publisher: Yang & Associates Limited
Published: 2013-05-06T04:00:00+00:00

Part 4: Investing Characteristics of REITs

Chapter 6. What maintenance and expansion investments do the management typically make?

Rental real estate managers make significant investment in both maintenance and expansionary cap ex. In theory, maintenance cap ex happens when capital is spent to maintain the company's current competitive position, and expansionary cap ex happens when capital is spent to increase a company's competitive portfolio. The difficulty lies in some gray area between the two. For example, if a mall is being expanded, with some major renovation done to the existing space, how should the project be modeled? Often this would depend on analyst experience in judging through the merits of these projects.

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