Call Options and Liquidation in Commercial Mortgage Financing
研究了财富受限的经理人用外部债务融资购买商业地产项目时，可赎回债务的低效性，并解释了为何商业地产贷款常被止赎及以甩卖价清算。
This paper models a commercial real estate project where a wealth‐constrained manager uses outside debt financing to purchase a project who’s return depends on future economic conditions and the manager’s investment in the project. It is shown that it is inefficient to finance the project with callable debt. This prediction is consistent with observed real estate financing practice. I also model the outcome of financial distress allowing for (1) debt forgiveness, (2) equity in exchange for debt forgiveness, and (3) foreclosure. The model motivates (1) why commercial real estate loans are often foreclosed, and (2) why lenders foreclose assets at fire‐sale prices.