Anmerkungen:
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Beschreibung:
The purpose of this paper is an exploration of the relationship between the innovation ecosystem, consisting of venture capital investment and high-growth start-ups, and the market value of commercial real estate property. Traditional economic and business research has not done significant analysis on the relationship between these two systems. Commercial real estate property valuations, in practice, take significant consideration of major employers and employment composition in order to determine long-term metropolitan economic expansion prospects, population growth, resiliency to fluctuations in the business cycle, monetary policy and long-term tenant demand, but these analyses have yet to integrate venture capital investment volumes into local ecosystems as a predictor of future asset and space values. I argue that the innovation ecosystem substantially increases the total factor productivity (TFP) of labor and capital within a regional economy, thereby increasing the value of real property within geographic proximity to venture capital investment, independent of changes in population or employment in traditional industry sectors. Thus, exponential increases in corporate profitability per employee and median income translate into materially significant increases in demand for office, retail, residential and industrial space in a given geography. This research is important for accurately assessing net present value (NPV) in the development, acquisition, and disposition of trillions of dollars of commercial real estate properties not only within the realm of private equity, but also sovereign wealth funds (SWF), pension funds and insurance companies