Thies Lindenthal

Thies Lindenthal

Research and teaching, mostly real estate finance, a bit of Big Data, ML, domain names, and a careful dose of proptech. University of Cambridge, Department of Land Economy.

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Carolin Schmidt, Wayne Wan and I drafted a new working paper — feedback would be very welcome.

ML-enabled classifiers are regularly criticized for being ‘black boxes’: While their predictive power is undisputed, it is difficult to understand why the model arrived at a particular classification. The same can be said for humans classifying photos according to their aesthetic appeal. They can quickly say whether they like a photo or not — but giving justifications for such a choice is often challenging. Also, human classifiers exhibit inconsistencies and biases, adding to the black box nature of their classifications.

This paper first collects binary classifications of house pictures from a large group of participants and then trains personalized ML classifiers for each participant. Predictions from these automated yet personal classification machines shed light on biases and inconsistencies in the participants’ assessment of residential real estate’s visual appeal.

Full paper: Link

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Working Paper: Enhancing Real Estate Investment Trust (REIT) Return Forecasts via Machine Learning

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We add to the emerging literature on machine learning empirical asset pricing by analyzing a comprehensive set of return prediction factors on REITs. We show that machine learning models are superior to traditional ordinary least square models and we find that REIT investors experience significant economic gains when using machine learning forecasts. Comparing to the stock market, we show that REITs are more predictable than stocks, and that the higher predictability is stable across time and across industry types.

The MPhils were back in town!

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It was such a joy to welcome back our MPhil alumni and former colleagues for the 2024 MPhil reunion! I truly enjoyed the evening, hearing all about your impressive careers—but, more importantly, seeing old friendships glowing strong and new bonds forming.Sometimes, the beauty of working in education gets lost in the daily grind. Being there with you wonderful people, I felt grateful, sentimental, and curious about your next steps. Thanks to all for the reunion, and I hope to see you again soon!

Continuous learning

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As I sat in the dentist’s chair, waiting for the local anesthetic to kick in, I finally asked the dentist something I had wondered about a few times before: “How do you keep up with new techniques and stay on top of your field?” I inquired, half-expecting a mention of professional courses or medical journals. His response was immediate and enthusiastic: “YouTube!” And that was reassuring.

Blog post: Predictable REIT returns

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The Cambridge Endowment for Research in Finance (CERF) has published a blog post on Kahshin Leow’s and my research on predictable REIT returns: https://www.cerf.cam.ac.uk/blog/blog-2024