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This chapter describes how micro-locational factors affect international alliance formation. The authors focus specifically on the role of global cities, which are studied from a distance perspective. The authors argue that distances must be apprehended not at the country level but at the city level. The chapter is an attempt to provide a better understanding of the complex, multilevel factors that interact when firms select an alliance partner in a particular location. The authors take an explorative methodological approach through a configurational analysis of international alliances made by American companies in 2015. The main contribution is the proposition of a typology of micro-locational characteristics to help understand international alliance formation at a city level.

The adoption of statistical methods of analysis by British valuers has been, at the best, rather piece‐meal. This paper highlights the contrasting application of multiple regression analysis (MRA) within valuation practice in the USA relative to that in the UK and emphasises the need for suitable databases. Historically the valuer in the UK has lacked access to databases. The analyses presented in this paper indicate that, even if databases exist, factors such as statistical variability, heterogeneity, geographical scale and sample size may influence both the explanatory and predictive powers of the MRA model. Nevertheless the estimation of value from the objectivity of the MRA model can assist the valuer by supporting opinion or highlighting circumstances where re‐appraisal is necessary.

Using a unique data set, the purpose of this paper is to test the hypothesis that tenants pay increased accommodation costs for space in energy efficient office property.

The authors obtain lease contracts for office space in central Sydney, Australia. Empirical data on annual gross face rent and contract terms from each lease are combined with building characteristics and measured energy performance at the time of lease. Hedonic regression isolates the effect of energy performance on gross face rent.

No significant price differentials emerged as a function of energy performance, leading to a conclusion that tenants are not willing to pay for energy efficiency. Six factors – tenancy floor level, submarket location, proximity to transit, market fixed effects, building quality specification and, surprisingly, outgoings liability – consistently explain over 85 per cent of gross face rent prices in Sydney.

Rent premiums from an asset owner's perspective could emerge as a result of occupancy premiums, market timing or agent bias combined with statistically insignificant rental price differentials.

Tenants are likely indifferent to energy costs because the paper demonstrates that energy efficiency lacks financial salience and legal obligation in Sydney. This means that split incentives between owner and tenant are not a substantial barrier to energy efficiency investment in this market.

This study is the first to thoroughly examine energy efficiency rent price premiums at the tenancy scale in response to disclosure of measured performance. It also presents evidence against the common assumption that rent premiums at the asset scale reflect tenant willingness to pay for energy efficiency.

The purpose of this paper is to investigate the relationship between occupiers’ satisfaction with the property management service they receive and the financial performance of commercial real estate.

The study uses occupier satisfaction data for 240 UK commercial properties collected over a 12-year period and the annual total returns achieved by those properties. Various statistical techniques are employed to assess whether increasing occupier satisfaction leads to greater returns for investors. These include comparing excess returns and risk-adjusted returns with occupier satisfaction at each property to assess whether superior property management generates outperformance (“positive alpha”). The study also investigates whether the relationship between occupier satisfaction and returns is the same across all sectors and whether it is affected by market conditions.

A positive correspondence is found between benchmark outperformance and occupier satisfaction. The relationship is similar for all sectors of commercial property and is particularly strong during the Global Financial Crisis, indicating that paying attention to satisfying the needs of occupiers has particular benefits during periods when the supply of commercial real estate exceeds demand.

The sample of properties was restricted to those for which occupier satisfaction data had been collected by RealService Ltd and whose owners permitted access to the financial performance results. This meant that the properties belong to only three landlords, all UK REITs that care sufficiently about occupier satisfaction to commission studies. Thus the findings might not apply to all commercial properties. The mechanism by which the positive relationship between satisfaction and financial performance occurs is not tested, but the conventional mechanisms of reputation and customer loyalty (the “service-profit chain”) are discussed.

The findings suggest that it is worthwhile for landlords, or property managers acting on their behalf, to understand the needs of their occupiers in order to deliver the level of service that those occupiers desire. Leases in the UK are generally “triple net” and the total returns used for this analysis are net of property management costs, so the positive relationship between satisfaction and performance is not the result of economising on service delivery. A further implication is that valuers should take more account of occupier satisfaction when assessing the capital value of a property, from which total returns are assessed.

Demonstrating the links between customer service, customer satisfaction and business profitability is rarely attempted because of the many confounding factors that affect profitability. UK listed real estate companies are typically reluctant to reveal the financial performance of individual properties, and information about occupiers’ satisfaction is not generally available. The authors were fortunate to be granted access to a time series of such data, and to be able to demonstrate that attention to delivering a property management service that satisfies occupiers is likely to bring financial rewards to the owners of the property.

Automated valuation models (AVMs) are statistical asset pricing models omnipresent in residential real estate markets, where they inform property tax assessment, mortgage underwriting and marketing. Use of these asset pricing models outside of residential real estate is rare. The purpose of the paper is to explore key characteristics of commercial office lease contracts and test an application in estimating office market rental prices using an AVM.

The authors apply a semi-log ordinary least squares hedonic regression approach to estimate either contract rent or the total costs of occupancy (TOC) (“grossed up” rent). Furthermore, the authors adopt a training/test split in the observed leasing data to evaluate the accuracy of using these pricing models for prediction. In the study, 80% of the samples are randomly selected to train the AVM and 20% was held back to test accuracy out of sample. A naive prediction model is used to establish accuracy prediction benchmarks for the AVM using the out-of-sample test data. To evaluate the performance of the AVM, the authors use a Monte Carlo simulation to run the selection process 100 times and calculate the test dataset's mean error (ME), mean absolute error (MAE), mean absolute percentage error (MAPE), median absolute percentage error (MdAPE), coefficient of dispersion (COD) and the training model's r-squared statistic (R²) for each run.

Using a sample of office lease transactions in Sydney CBD (Central Business District), Australia, the authors demonstrate accuracy statistics that are comparable to those used in residential valuation and outperform a naive model.

AVMs in an office leasing context have significant implications for practice. First, an AVM can act as an impartial arbiter in market rent review disputes. Second, the technology may enable frequent market rent reviews as a lease negotiation strategy that allows tenants and property owners to share market risk by limiting concerns over high costs and adversarial litigation that can emerge in a market rent review dispute.

Success in retailing depends heavily on location. Retailers do better if their shops/stores are situated adjacent to complementary or competitive establishments. This article presents the results of a survey of the micro‐locational perceptions of traders in the centre of a major British City.

Tobler's law of geography states that things that are close to one another tend to be more alike than things that are far apart. In this regard, the spatial pattern of price distribution is defined by the arrangement of individual entities in space and the geographic relationships among them. The purpose of this paper is to provide emerging findings of research analysing the salient factors which impact on the sale price of residential properties using a spatial regression approach.

The research develops and formulates a geographically weighted regression (GWR) model to incorporate residential sales transactions within the Belfast Metropolitan Area over the course of 2010. Transaction data were sourced from the University of Ulster House Price Index survey (2010, Q1‐Q4). The GWR approach was then evaluated relative to a standard hedonic model to determine the spatial heterogeneity of residential property price within the Belfast Metropolitan Area.

This investigation finds that the GWR technique provides increased accuracy in predicting marginal price estimates, in comparison with traditional hedonic modelling, within the Belfast housing market.

This study is one of only a few investigations of spatial house price variation applying the GWR methodology within the confines of a UK housing market. In this respect it enhances applied based knowledge and understanding of geographically weighted regression.

The purpose of this paper is to examine individual level property returns to see whether there is evidence of persistence in performance, i.e. a greater than expected probability of well (badly) performing properties continuing to perform well (badly) in subsequent periods.

The same methodology originally used in Young and Graff is applied, making the results directly comparable with those for the US and Australian markets. However, it uses a much larger database covering all UK commercial property data available in the Investment Property Databank (IPD) for the years 1981 to 2002 – as many as 216,758 individual property returns.

While the results of this study mimic the US and Australian results of greater persistence in the extreme first and fourth quartiles, they also evidence persistence in the moderate second and third quartiles, a notable departure from previous studies. Likewise patterns across property type, location, time, and holding period are remarkably similar.

The findings suggest that performance persistence is not a feature unique to particular markets, but instead may characterize most advanced real estate investment markets.

As well as extending previous research geographically, the paper explores possible reasons for such persistence, consideration of which leads to the conjecture that behaviors in the practice of institutional‐grade commercial real estate investment management may themselves be deeply rooted and persistent, and perhaps influenced for good or ill by agency effects.

The problem of obtaining suitable comparables has been recognised as the principal weakness in the direct comparison method of valuation. This paper utilising a data‐base derived for Northern Ireland highlights the degree of statistical variability that exists in residential property values. It is shown that knowledge of variability can aid the valuer in looking wider for comparables in certain property types while also bringing attention to situations in which spurious comparables are statistically more probable. In conclusion the case is forwarded for a ‘pooled’ data base in which the level of information available for the valuer could be greatly enhanced.

Although the issue of retail location has attracted a great deal of academic attention, the bulk of this literature pertains to the national, regional and urban scales of analysis. An equally important, but comparatively neglected, consideration is micro‐scale retail location; that is, location within planned shopping centres and unplanned shopping districts. Summarizes the existing literature on retail location at the micro‐scale and asks whether it is in fact a “cinderella” subject – unappreciated but with much to offer – or an “ugly sister”, unworthy of serious attention.