{"id":{"repo_id":"mit","oai_identifier":"oai:dspace.mit.edu:1721.1/120651"},"canonical_url":"https://search.dev.ndltd.org/etd/mit/oai:dspace.mit.edu:1721.1/120651","repository":{"repo_id":"mit","name":"MIT","base_url":"https://dspace.mit.edu/oai/request"},"display":{"title":"'The Optimal Mix' : deploying portfolio theory on real estate asset returns in mixed-use development","abstract":"Mixed-use has emerged as one of the most popular and demanded forms of real estate development in many metropolitan regions around the world. While mixed-use development broadly incorporates a variety of functions including, residential, commercial, and retail programs within one project, there is little science in determining the 'optimal mix' in mixed-use development resulting in a programmatic melange. Current practices largely determine the program mix through \"gut intuition\" or \"rule of thumb\", and value mixed-use projects by the returns of the individual components. This study seeks to develop an alternative model in defining an ideal program mix in mixed-use development that is based on an optimized and quantifiable portfolio value. The goal is to develop a framework for determining a recipe for mixed-use development in the hope of guiding future development practices in building more efficient, profitable and sustainable mixed-use developments across the United States. This study sees an opportunity to apply Modern Portfolio Theory, a widely adopted method in the finance industry that determines the most efficient allocation in a portfolio of assets, to identify an optimal program mix in mixed-use development projects. Mixed-use developments are inherently a portfolio of distinct real estate assets. Each component product type, such as residential, office, and retail can be thought of as individual assets within a mixed-use portfolio. These component assets offer varying returns and volatilities due to their individual characteristics and correlations with the market. If a mixed-use project is viewed as a portfolio, then an opportunity exists to optimize the project by adjusting allocations in the individual assets, resulting in an efficiently programmed project that maximizes total project returns for a given level of risk. Using market data, this thesis intends to identify the 'optimal mix' for fourteen markets across the United States. The study seeks to discuss the real-world limitations of implementing these program mixes in order to propose a new method to quantify and evaluate programming in mixed-use development; a method based on determining an 'optimal mix' that will generate the highest risk-adjusted returns for an investor, bringing to the forefront a new method in intelligent programming.","abstract_html":"Mixed-use has emerged as one of the most popular and demanded forms of real estate development in many metropolitan regions around the world. While mixed-use development broadly incorporates a variety of functions including, residential, commercial, and retail programs within one project, there is little science in determining the 'optimal mix' in mixed-use development resulting in a programmatic melange. Current practices largely determine the program mix through "gut intuition" or "rule of thumb", and value mixed-use projects by the returns of the individual components. This study seeks to develop an alternative model in defining an ideal program mix in mixed-use development that is based on an optimized and quantifiable portfolio value. The goal is to develop a framework for determining a recipe for mixed-use development in the hope of guiding future development practices in building more efficient, profitable and sustainable mixed-use developments across the United States. This study sees an opportunity to apply Modern Portfolio Theory, a widely adopted method in the finance industry that determines the most efficient allocation in a portfolio of assets, to identify an optimal program mix in mixed-use development projects. Mixed-use developments are inherently a portfolio of distinct real estate assets. Each component product type, such as residential, office, and retail can be thought of as individual assets within a mixed-use portfolio. These component assets offer varying returns and volatilities due to their individual characteristics and correlations with the market. If a mixed-use project is viewed as a portfolio, then an opportunity exists to optimize the project by adjusting allocations in the individual assets, resulting in an efficiently programmed project that maximizes total project returns for a given level of risk. Using market data, this thesis intends to identify the 'optimal mix' for fourteen markets across the United States. The study seeks to discuss the real-world limitations of implementing these program mixes in order to propose a new method to quantify and evaluate programming in mixed-use development; a method based on determining an 'optimal mix' that will generate the highest risk-adjusted returns for an investor, bringing to the forefront a new method in intelligent programming.","abstract_has_math":false,"creators":["Song, Weijia, S.M. Massachusetts Institute of Technology"],"institution":"Massachusetts Institute of Technology","degree_name":null,"degree_level":null,"degree_discipline":null,"degree_department":"Massachusetts Institute of Technology. Center for Real Estate. Program in Real Estate Development.","school":null,"contributors":[],"advisors":["Walter N. Torous."],"committee_chairs":[],"committee_members":[],"year":2018,"date_issued":"2018","date_published":"2018","updated_at":"2026-07-22T22:21:16Z","subjects":["Center for Real Estate. Program in Real Estate Development."],"languages":["eng"],"rights":["MIT theses are protected by copyright. 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While mixed-use development broadly incorporates a variety of functions including, residential, commercial, and retail programs within one project, there is little science in determining the 'optimal mix' in mixed-use development resulting in a programmatic melange. Current practices largely determine the program mix through \"gut intuition\" or \"rule of thumb\", and value mixed-use projects by the returns of the individual components. This study seeks to develop an alternative model in defining an ideal program mix in mixed-use development that is based on an optimized and quantifiable portfolio value. The goal is to develop a framework for determining a recipe for mixed-use development in the hope of guiding future development practices in building more efficient, profitable and sustainable mixed-use developments across the United States. This study sees an opportunity to apply Modern Portfolio Theory, a widely adopted method in the finance industry that determines the most efficient allocation in a portfolio of assets, to identify an optimal program mix in mixed-use development projects. Mixed-use developments are inherently a portfolio of distinct real estate assets. Each component product type, such as residential, office, and retail can be thought of as individual assets within a mixed-use portfolio. These component assets offer varying returns and volatilities due to their individual characteristics and correlations with the market. If a mixed-use project is viewed as a portfolio, then an opportunity exists to optimize the project by adjusting allocations in the individual assets, resulting in an efficiently programmed project that maximizes total project returns for a given level of risk. Using market data, this thesis intends to identify the 'optimal mix' for fourteen markets across the United States. The study seeks to discuss the real-world limitations of implementing these program mixes in order to propose a new method to quantify and evaluate programming in mixed-use development; a method based on determining an 'optimal mix' that will generate the highest risk-adjusted returns for an investor, bringing to the forefront a new method in intelligent programming."]},{"key":"dc:description.degree","label":"Dc Description Degree","values":["S.M. in Real Estate Development"]},{"key":"dc:title","label":"Title","values":["'The Optimal Mix' : deploying portfolio theory on real estate asset returns in mixed-use development"]}]}],"canonical_facts":{"dc:contributor.advisor":["Walter N. Torous."],"dc:contributor.department":["Massachusetts Institute of Technology. Center for Real Estate. Program in Real Estate Development."],"dc:contributor.other":["Massachusetts Institute of Technology. Center for Real Estate. Program in Real Estate Development."],"dc:creator":["Song, Weijia, S.M. 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Current practices largely determine the program mix through \"gut intuition\" or \"rule of thumb\", and value mixed-use projects by the returns of the individual components. This study seeks to develop an alternative model in defining an ideal program mix in mixed-use development that is based on an optimized and quantifiable portfolio value. The goal is to develop a framework for determining a recipe for mixed-use development in the hope of guiding future development practices in building more efficient, profitable and sustainable mixed-use developments across the United States. This study sees an opportunity to apply Modern Portfolio Theory, a widely adopted method in the finance industry that determines the most efficient allocation in a portfolio of assets, to identify an optimal program mix in mixed-use development projects. Mixed-use developments are inherently a portfolio of distinct real estate assets. Each component product type, such as residential, office, and retail can be thought of as individual assets within a mixed-use portfolio. These component assets offer varying returns and volatilities due to their individual characteristics and correlations with the market. If a mixed-use project is viewed as a portfolio, then an opportunity exists to optimize the project by adjusting allocations in the individual assets, resulting in an efficiently programmed project that maximizes total project returns for a given level of risk. Using market data, this thesis intends to identify the 'optimal mix' for fourteen markets across the United States. The study seeks to discuss the real-world limitations of implementing these program mixes in order to propose a new method to quantify and evaluate programming in mixed-use development; a method based on determining an 'optimal mix' that will generate the highest risk-adjusted returns for an investor, bringing to the forefront a new method in intelligent programming."],"dc:description.degree":["S.M. in Real Estate Development"],"dc:identifier.uri":["http://hdl.handle.net/1721.1/120651"],"dc:language.iso":["eng"],"dc:publisher":["Massachusetts Institute of Technology"],"dc:rights":["MIT theses are protected by copyright. They may be viewed, downloaded, or printed from this source but further reproduction or distribution in any format is prohibited without written permission."],"dc:rights.uri":["http://dspace.mit.edu/handle/1721.1/7582"],"dc:subject":["Center for Real Estate. 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