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Financing corporate real estate: A raw materials procurement approach

Kevin E. Deeble (Vice‐President, Capital Markets and Corporate Finance, Starwood Financial, One Embarcadero Center, 33rd Floor, San Francisco CA 94111, USA; Tel: +1 (415) 263 8669; Fax: +1 (415) 391 6259; e‐mail: kevindeeble@trinetco.com)

Journal of Corporate Real Estate

ISSN: 1463-001X

Article publication date: 1 April 2000

Abstract

Current CRE financial management practices predominantly reflect a view of real estate as an investment vehicle. The author argues that for the CRE manager, real estate is not an investment vehicle, but rather a raw material in his firm’s production process. Under the raw materials procurement approach, the CRE manager’s goal is to optimise reliability, flexibility and cost across the CRE portfolio. Optimisation is attained by pursuing a financing strategy of asset/liability matching; the CRE manager should attempt to match the duration of his real estate financial commitments to the real estate’s expected productive life as a raw material. The author outlines a methodology for implementation built around two key manageable variables: commitment and control.

Keywords

Citation

Deeble, K.E. (2000), "Financing corporate real estate: A raw materials procurement approach", Journal of Corporate Real Estate, Vol. 2 No. 2, pp. 144-153. https://doi.org/10.1108/14630010010811275

Publisher

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MCB UP Ltd

Copyright © 2000, MCB UP Limited