REAL ESTATE DERIVATIVES A PRIMER.qxp
نویسنده
چکیده
For many, derivatives are often associated with infamous financial events and scandals resulting from highly leveraged and speculative use of derivative financial instruments. The most common use of these instruments is, however, in the often quiet area of risk management rather than the charged atmosphere of high stakes betting. At the most basic level, a derivative is simply a financial instrument that allows two parties to enter into a relationship where one party gains more exposure to the performance of a specific asset while the other party reduces their exposure to the same asset. These agreements have been in use for centuries in agriculture and commodity trading and, in modern times, have evolved in complexity along with the global financial system to cover virtually all aspects of the capital market. Until recently, the one glaring exception to this has been the largely private investment market of residential and commercial property, particularly in the United States. Today, there is an emerging market of derivative instruments for property investment. While still embryonic, this market holds the promise of potentially significant benefits for real estate investment practices and markets. Specifically, a fully formed and functioning derivatives market for commercial property lifts the opaque veil of the private market that has retarded information efficiency and hampered price discovery in this multi-trillion dollar investment market. All real estate investors, regardless of their specific interest in using these instruments, should support the development of this market and the numerous benefits that they will ultimately bring to the asset class.
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تاریخ انتشار 2008