@article{7393fea374fb4f24aa0994ec3bdf5ea6,
title = "The term structure of lease rates with endogenous default triggers and tenant capital structure: Theory and evidence",
abstract = "This paper focuses on the defaultable lease rate term structure with endogenous default. We combine the competitive lease market argument proposed by Grenadier (1996) and the endogenous default structural model proposed by Leland and Toft (1996) to examine the interaction between the lessee's capital structure and the equilibrium lease rate. Under this framework, determining the lease rate is a simultaneous equation problem that captures the trade-off between debt and lease financing. Using data on 2,482 real estate lease transactions, we empirically confirm the predictions derived from the numerical analysis of the model.",
author = "Sumit Agarwal and Ambrose, {Brent W.} and Hongming Huang and Yildiray Yildirim",
note = "Funding Information: ∗Agarwal, ushakri@yahoo.com, Economic Research, Federal Reserve Bank of Chicago, 230 S. LaSalle St., Chicago, IL 60604; Ambrose, bwa10@psu.edu, Institute for Real Estate Studies, Pennsylvania State University, University Park, PA 16802; Huang, hongming@ncu.edu.tw, Department of Finance, National Central University, No. 300, Jung-da Rd., Jung-Li, Taiwan 320, R.O.C.; and Yildirim, yildiray@syr.edu, Whitman School of Management, Syracuse University, 721 University Ave., Ste. 500, Syracuse, NY 13244. We thank Itzhak Ben-David, Hendrik Bessembinder (the editor), Steven Grenadier (the referee), and Raymond Kan for their helpful comments and suggestions. The views expressed in this research are those of the authors and not necessarily those of the Federal Reserve System or the Federal Reserve Bank of Chicago. 1See Geiger (Dec. 28, 2005).",
year = "2010",
month = dec,
doi = "10.1017/S0022109010000839",
language = "???core.languages.en_GB???",
volume = "46",
pages = "553--584",
journal = "Journal of Financial and Quantitative Analysis",
issn = "0022-1090",
number = "2",
}