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| Real-Time Valuation:
Breathing New Life into Moribund DCF Modeling Author: Start Page: 25 Abstract:
By using readily available daily information on the time value of money,
namely the Treasury yield curve, and by applying risk premiums appropriate
to commercial real estate tenant leases, the predominant single discount
rate shortcut Discounted Cash Flow (DCF) models can be improved. By
utilizing the Treasury yield curve, real-time valuation is possible. The
Real-Time Valuation (RTV) model proposed here also produces useful
statistics to aid portfolio construction and monitoring such as duration and
explicit risk assessment. These statistics are unavailable in current
formulations of real estate DCF models.
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