J. McDonald, “Equity Participation: A Theoretical Analysis,” Journal of Real Estate Portfolio Management, Vol. 18, No. 3, 2012, pp. 247-255.
has been cited by the following article:
TITLE: Equity Participation without Equity: An Analysis of Hope Notes
AUTHORS: John F. McDonald
KEYWORDS: Hope Notes; Asset Valuation; Commercial Real Estate
JOURNAL NAME: Modern Economy, Vol.4 No.5, May 31, 2013
ABSTRACT: The paper examines the case of splitting a defaulted mortgage loan on a commercial property into an A note that earns interest and a B note that earns a return only if the value of the property increases. The B note is known as a “hope note.” The paper shows that the current methods for structuring such a deal often produce a B note that is worthless. A state-preference model is employed.