Publications
Publications
- August 2014 (Revised November 2015)
- HBS Case Collection
Rick's Dilemma
By: Arthur I. Segel, Charles F. Wu, Siddharth Yog and Ben Eppler
Abstract
In 2014, Rick is serving as a trustee for a large family trust whose principle asset is a plot of prime real estate in the Upper East Side of Manhattan. The land is currently subject to a ground lease which pays $4.6 million annually, with resets every 20 years at 4.5% of the appraised value of the land. The next reset is in 2022, and in the meantime Rick must make a decision on whether it might be better for the trust's beneficiaries to sell the land early. If so, what price should he seek?
Keywords
Real Estate; New York Property; Appraisal Methods; Valuation Methodologies; Property; Finance; Real Estate Industry; New York (city, NY); United States
Citation
Segel, Arthur I., Charles F. Wu, Siddharth Yog, and Ben Eppler. "Rick's Dilemma." Harvard Business School Case 215-006, August 2014. (Revised November 2015.)