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Article
Publication date: 1 January 2006

Anna‐Liisa Lindholm and Kari I. Leväinen

The purpose of this paper is to model how real estate strategies can add value to the core business, providing corporate real estate mangers with a tool to illustrate to corporate…

6686

Abstract

Purpose

The purpose of this paper is to model how real estate strategies can add value to the core business, providing corporate real estate mangers with a tool to illustrate to corporate officers how real estate adds value to the firms.

Design/methodology/approach

The authors review previous research and interview 26 corporate real estate executives to examine what are common approaches to developing real estate strategies and measuring performance. They then model how real estate adds value to the firm and how that value can be measured.

Findings

Many firms do not recognize how real estate adds value to the business. While they may have a corporate real estate strategy, that strategy is often not developed in coordination with the overall business strategy. In addition, the performance measures being used by many companies focus solely on cost, not value added.

Practical implications

Corporate real estate's contribution to the core goal of wealth maximization can be modeled to illustrate the tangible and intangible effects real estate has financial performance. A structured approach to developing a real estate strategy in conjunction with the core business strategy, supported by a performance measurement system will allow corporate real estate executives to better communicate how corporate real estate is adding value to the firm.

Originality/value

Corporate real estate managers need better ways to illustrate, to corporate leaders, how they add value. This paper illustrates such a model with supporting operating decisions and performance measures.

Details

Journal of Corporate Real Estate, vol. 8 no. 1
Type: Research Article
ISSN: 1463-001X

Keywords

Article
Publication date: 1 July 2000

William B. Ardern

Annual real estate taxes are one of the largest and fastest‐growing occupancy costs for corporationsowning or leasing real estate in the United States. An active programme of…

Abstract

Annual real estate taxes are one of the largest and fastest‐growing occupancy costs for corporations owning or leasing real estate in the United States. An active programme of management, control and reduction of annual real estate tax assessments can be successful, if a corporation is proactive and follows certain steps on a timely basis.

Details

Journal of Corporate Real Estate, vol. 2 no. 3
Type: Research Article
ISSN: 1463-001X

Keywords

Article
Publication date: 27 June 2024

Xinran Kong and Wei Wang

Research on corporate social responsibility (CSR) within the real estate sector is limited, and the precise workings of its impact are still unclear. Under the premise that real

Abstract

Purpose

Research on corporate social responsibility (CSR) within the real estate sector is limited, and the precise workings of its impact are still unclear. Under the premise that real estate enterprises face environmental uncertainty in China, this study explored the impact of CSR on real estate enterprise value.

Design/methodology/approach

To investigate the impact of CSR on enterprise value, we studied 111 real estate enterprises with A-shares listed on Shanghai and Shenzhen stock exchanges from 2010 to 2020, and performed empirical tests to determine the moderating effect of environmental uncertainty on this relationship.

Findings

(1) The fulfillment of corporate social responsibility (CSR) significantly influences the value of real estate enterprises. A sub-dimensional analysis reveals that fulfilling stakeholder and social welfare responsibilities within CSR positively impacts enterprise value, whereas environmental responsibility does not exert a notable effect. (2) The uncertainty associated with environmental changes profoundly affects the relationship between CSR and the value of real estate enterprises. More precisely, as environmental uncertainty increases, it amplifies the beneficial impact of CSR on enterprise value.

Practical implications

These findings are valuable for real estate enterprises as they navigate the transition towards sustainable development, and they also provide insight for the government in formulating policies aimed at regulating the real estate sector.

Originality/value

This study complements the existing discussion and research on corporate social responsibility (CSR) and enterprise value in the real estate industry, while elucidating the underlying mechanism of how environmental uncertainty mediates the relationship between the two.

Details

Business Process Management Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1463-7154

Keywords

Book part
Publication date: 18 February 2004

Ranney Ramsey

This article identifies the concept of market value as a standardizing concept that coordinates the actions of market participants in relatively inefficient real estate markets…

Abstract

This article identifies the concept of market value as a standardizing concept that coordinates the actions of market participants in relatively inefficient real estate markets. The paper also identifies different levels of discourse that reflect the organizational/institutional complexity of the real estate appraisal profession. The standardizing effect of market value includes a cognitive and fiduciary component. Using this framework, the paper traces the influence of Richard T. Ely’s institutional economics – and its legacy in the form of the research program of Urban Land Economics at the University of Wisconsin – on the formation and development of the standards of appraisal and ethical practice. This complexity is traced historically from the early part of the 19th century to the formation of the professional organizations and the establishment of their standards, and also through a series of reform efforts in the 1960s and 1980s that were articulated in the academic community. The paper illustrates the manner in which Institutional Economics has been influential in the continuing development of the real estate appraisal profession and suggests reasons for its continuing relevance.

Details

Wisconsin "Government and Business" and the History of Heterodox Economic Thought
Type: Book
ISBN: 978-0-76231-090-6

Article
Publication date: 1 January 1992

J.H. Goslings and V.L. Petri

Looks at the risk/return characteristics of real estate on thebasis of both appraisal and market values. Broadens this analysis toinclude inflation. Makes a series of observations…

Abstract

Looks at the risk/return characteristics of real estate on the basis of both appraisal and market values. Broadens this analysis to include inflation. Makes a series of observations about the role of real estate in efficient investment portfolios. Concludes that as long as direct real estate is valued at appraisal value it is unmistakably a solid inflation hedge.

Details

Journal of Property Valuation and Investment, vol. 10 no. 1
Type: Research Article
ISSN: 0960-2712

Keywords

Article
Publication date: 14 March 2023

Daniel Amos and Naana Amakie Boakye-Agyeman

This study aims to establish the statistical relationships between corporate real estate added value indicators of cost reduction, increasing productivity, risk reduction and…

Abstract

Purpose

This study aims to establish the statistical relationships between corporate real estate added value indicators of cost reduction, increasing productivity, risk reduction and flexibility and organizational financial and non-financial performance.

Design/methodology/approach

The study adopted a mixed methods approach which encompasses initial expert interviews and subsequent questionnaire surveys. Partial least squares structural equation modelling was applied to test the proposed hypotheses of the study.

Findings

The results highlight the significant influence of three added value indicators on organizational performance while highlighting the need for strategic corporate real estate risk management to enhance performance.

Practical implications

The results of the study are useful to identify relevant added value indicators that can improve organizational performance as well as potential added value indicators that deserve attention for performance improvement. Moreover, it presents knowledge on corporate performance indicators which is sparsely explored in corporate real estate management literature.

Originality/value

This study makes a novel contribution to corporate real estate management literature by presenting a parsimonious model to alert corporate real estate managers on essential added value parameters towards organizational performance. The model set the theoretical debates to exploit additional added value dimensions and organizational performance.

Details

Journal of Corporate Real Estate , vol. 25 no. 4
Type: Research Article
ISSN: 1463-001X

Keywords

Article
Publication date: 2 March 2012

Georgia Warren‐Myers

The purpose of this paper is to synthesise the plethora of research that has been conducted into the relationship between sustainability and market value in real estate, by…

12594

Abstract

Purpose

The purpose of this paper is to synthesise the plethora of research that has been conducted into the relationship between sustainability and market value in real estate, by critically analysing the research and the applicability of sustainability and value research in valuation practice.

Design/methodology/approach

The research on the relationship between sustainability and market value in real estate is examined from the perspective of its usefulness to the valuation profession in providing guidance, information and evidence to be used in valuation practice.

Findings

Existing research conducted into the relationship between sustainability and market value has not provided the valuation profession with evidence which would allow the incorporation of normative theories on the value of sustainability in valuation practice. This review highlights the lack of evidence, and the applicability of current research into sustainability and value to the valuation profession in providing guidance and information in valuing real estate incorporating sustainability.

Practical implications

This paper highlights the limited applicability of research to date in regard to the relationship between sustainability and market value for the valuation profession. The lack of historical evidence, data or information on the quantifiable effects on market value of this new trend (sustainability), leaves the valuation profession uncertain as to the relationship between sustainability and market value. There is a probable risk of valuers interpreting strategic research incorrectly, and making inappropriate adjustments or comparisons because of their lack of knowledge and limited sustainability assessment skills. Although there is an evolving body of knowledge, there is a need for extensive analysis of unbiased, evidence‐based research in individual and broader markets to provide guidance, evidence and knowledge of the implications of sustainability in the valuation of real estate.

Originality/value

The examination of research investigating the relationship between sustainability and value from a valuation perspective provides an alternative insight into the applicability of current research in valuation practice. The increasing profile and role of sustainability in the real estate sector needs to be addressed in valuation practice; however, the variety of research to date needs to be interpreted by valuers in the correct context. This paper brings to light the applicability of sustainability and value research for the broader valuation profession, and the potential implications of misuse or misunderstanding of that research.

Details

Journal of Property Investment & Finance, vol. 30 no. 2
Type: Research Article
ISSN: 1463-578X

Keywords

Article
Publication date: 9 May 2016

Theo J.M. van der Voordt

Because of the transition of the Dutch health care sector from a governmentally steered domain towards regulated market forces, health care organisations have become fully…

Abstract

Purpose

Because of the transition of the Dutch health care sector from a governmentally steered domain towards regulated market forces, health care organisations have become fully responsible for their real estate. This paper aims to explore if/how Dutch health care organisations adopt the concept of adding value by corporate and public real estate, which values are prioritised and how these values are implemented in daily practice.

Design/methodology/approach

Literature study and a meta-analysis of six student theses (1 × BSc, 1 × MSc, 3 × post-MSc and 1 × PhD) on adding value by health care facilities were conducted, using document analysis and semi-structured interviews with CEOs, project leaders, real estate managers and facility managers. All respondents work in Dutch hospitals, assisted living facilities for the elderly, or mental health care facilities. The interviews were jointly prepared by the students, and the author of this paper being their supervisor.

Findings

End-user satisfaction, enhancing productivity and stimulating innovation are highly prioritised. Which values are prioritised depends on the organisational objectives, target group, available budget, position in the life cycle of design, construction and use and external context, in particular governmental policy and competition with other health care suppliers. The operationalisation into concrete design choices and strategic management of buildings-in-use is still underdeveloped.

Research limitations/implications

The interviews lasted 1-1.5 hours, which is rather limited to get a complete picture. Although much work has been done to operationalise the added value of corporate real estate and building-related facilities, there is still a lack of a widely agreed taxonomy of added values and how to measure and manage these values. Ongoing international collaboration between researchers and practitioners aims to contribute to a common framework and to develop standardised measurement methods.

Practical implications

The insights can support decision-makers in value-adding real estate and facilities management value by public and corporate real estate. The listings of prioritised values and related interventions can be used as a frame of reference to improve the current design and management of health care real estate.

Social implications

A clear insight in value-adding management of corporate real estate may result in a better fit among real estate, organisational objectives and end-user needs.

Originality/value

The findings link the added value theory to corporate real estate management in Dutch health care practice.

Details

Journal of Corporate Real Estate, vol. 18 no. 2
Type: Research Article
ISSN: 1463-001X

Keywords

Article
Publication date: 2 August 2013

Francesco Baldi

Real options available to developers and leading to an active and dynamic development of real estate assets are numerous. The purpose of the article is twofold. First, a…

1713

Abstract

Purpose

Real options available to developers and leading to an active and dynamic development of real estate assets are numerous. The purpose of the article is twofold. First, a conceptual framework is proposed as a practical aid for recognizing and understanding some frequently recurring combinations of options (such as deferral and expansion options). Based on the definition and classification of real options available in real estate markets, a comprehensive valuation tool for quantifying the value of those options embedded in a real estate development project is thus developed using a portfolio view.

Design/methodology/approach

Based on standard option pricing techniques, the proposed conceptual methodology is validated by applying it to an actual case of an investment for the construction of a new, multi‐purpose building in the semi‐central zone of the urban area of Rome (Italy).

Findings

Based on a static land value of €34.7 million, a waiting mode (deferral option) at an early stage of developing a property accounts for 16 percent of the expanded land value of the project, with 8 percent of such value being contributed by the expansion option. A real options valuation of the options portfolio available to a real estate developer enables increasing the project value by 31.1 percent as opposed to a traditional DCF analysis. In line with financial options theory, values of real options increase as volatility rises.

Practical implications

The case‐based analysis highlights that: flexibility in real estate development may create additional value enabling real estate developers or funds to react to market trends as new information arrives and uncertainty on fundamental factors (e.g. property prices) unfolds; the extra value added by managerial flexibility is neglected by DCF/NPV techniques; contrary to the common criticism on its lack of rigor, option valuation theory is suitable for appraising real estate assets; a portfolio approach is crucial when multiple real options exist.

Originality/value

Active management of real estate investments in response to changing property market and technology conditions confers operating flexibility and strategic value to appraisal of development projects beyond what is traditionally captured by a DCF model. An options approach to valuing and managing real estate development may change the developer's perspective altogether. Based on the combination of an original classification and a portfolio view of options existing in real estate markets, a real options framework for assessing the value of strategic flexibility incorporated in a greenfield development project (also accounting for potential option interactions) is designed.

Details

Journal of European Real Estate Research, vol. 6 no. 2
Type: Research Article
ISSN: 1753-9269

Keywords

Article
Publication date: 14 June 2022

Johnson Kampamba, Simon Kachepa and Kgalaletso Lesobea

The purpose of this study was to assess real estate cycles and their impact on property values in Gaborone, Botswana. Investors and real estate professionals in Botswana rarely…

Abstract

Purpose

The purpose of this study was to assess real estate cycles and their impact on property values in Gaborone, Botswana. Investors and real estate professionals in Botswana rarely assess property cycles when purchasing property. This study therefore, aims to assess whether real estate cycles do exist, their duration and the type of real estate cycle that Botswana experiences.

Design/methodology/approach

Data was collected from primary and secondary sources. This included sourcing out information at the Deeds Registry Office in Gaborone on residential property sales and a questionnaire to 100 property investors. A record was made of properties that were sold for the period of 16 years starting from the year 2000 to 2016. Secondary data on the other hand was also collected from published and unpublished books, academic journals, professional journals, magazines, reports and monographs. A quantitative approach was used in this study. Data was analysed using Microsoft Excel and subsequently presented in form of tables and graphs.

Findings

The findings from the literature review revealed that there are four phases in the real estate cycles (recovery, expansion, oversupply and recession) and each has distinct features that an investor must be aware of to avoid consequences in the property market. The results from the data analysis revealed that real estate cycles do exist in Botswana as identified during the past 16 years. The cycle that Botswana experiences is called the kitchen cycle. It was also evident that Botswana experienced three cycles lasting five to six years each. Furthermore, it was discovered that all phases in the real estate cycles affect property values.

Research limitations/implications

There is relatively little information about property cycles and their timing in Botswana. Therefore, this study may assist valuation surveyors to make promptly informed decisions on property investment through cycle assessment and hence positively inform the public and financial stakeholders. Society might find this beneficial in as far as decision-making is concerned when thinking of investing in real estate. The current system at the deeds office is cumbersome and time consuming, thus making it difficult for the researchers and possibly the public to analyse the property market. This study therefore, may encourage the Deeds Registry Office to computerize their records.

Practical implications

There is relatively little information about property cycles and their timing in Botswana. Therefore, this study may assist valuation surveyors to make promptly informed decisions on property investment through cycle assessment and hence positively inform the public and financial stakeholders.

Social implications

Society might find this beneficial in as far as decision-making is concerned when thinking of investing in real estate.

Originality/value

To the best of the authors’ knowledge, this paper is the first of its kind in Botswana to extend the knowledge of real estate cycles and their impact on property cycles in Botswana.

Details

International Journal of Housing Markets and Analysis, vol. 16 no. 5
Type: Research Article
ISSN: 1753-8270

Keywords

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