Working Papers

Tenant Riskiness, Contract Length, and the Term Structure of Commercial Leases

Under Review | Last updated: March 2025

This paper explores the connection between tenant riskiness, commercial lease length and the term structure of lease contracts. Theory shows that the possibility of default on a long-term lease generates a risk/lease-length connection. The empirical work uses a large CompStak lease dataset combined with tenant characteristics (including risk) from Dun & Bradstreet. Regressions show that lease length is inversely related to the D&B risk measures, as predicted, and that risky tenants pay a higher rent premium for long-term contracts than low-risk tenants. The presence of such tenants thus raises the slope of the term structure of commercial rents.

Owned Now Rented Later? The Effect of Housing Stock Transitions on Affordable Housing and Market Dynamics

Under Review | Last updated April 2020

This paper shows that own-to-rent housing stock transitions provide a long run source of affordable housing while slowing recovery following a shock. Based on multiple linked surveys for the United States, there is a 2 percent net shift of existing SFD housing into rental status with each passing decade. Short term transitions can be larger and exceed 10 percent for recently built homes following the 2007 crash. Short run effects also partly reverse as markets rebound, depressing new construction. At the MSA level, roughly 25 fewer single family permits are filed for every 100 own-to-rent transitions of recently built homes.

Risk-Return Trade-Offs in Real Estate Markets Across and Within Cities

Under Review | Last updated: August 2025

We show that risk-return tradeoffs contribute to spatial variation in residential housing returns across cities and within larger metropolitan areas. At both levels of geography, this occurs because house price volatility varies with local supply elasticity and propensity for demand shocks. Market-wide systematic risk and locally based idiosyncratic risk both contribute to risk-return tradeoffs. At the CBSA level, magnitudes of effects are similar for the two types of risk but within large urban areas neighborhood-level idiosyncratic risk is more important and contributes to higher average returns in city centers. Our findings indicate that spatial differences in return to residential real estate persist in equilibrium, complementing persistent spatial variation in price levels. As with other assets, higher housing returns are associated with greater exposure to risk.

Eyes on the Street, Spatial Concentration of Retail Activity and Crime

Under Review | Last updated December 2023

If spatial concentration of retail establishments amplifies the effect of “eyes on the street”, that should lower neighborhood crime rates and reduce investment in anti-crime measures, with benefits capitalized into higher retail rent. Data for New York City supports these predictions. In addition, comparisons between nighttime versus daytime crime, pre-pandemic versus COVID-19 lockdown, and different measures of spatial concentration shed light on mechanisms. Under plausible identifying conditions, increasing neighborhood concentration of retail outlets by one standard deviation reduces property crime and police stops by at least 8.5% and 11%, respectively, and causes retail rent to increase by at least 7.8%.