The Formation of a Broad Real Estate Management Theory

Abstract

This research aims at developing a real estate management theory that overarches the different classes of real estate management like e.g. corporate real estate (CRE) management and housing management, who all operate within a specific narrative, apply a particular range of concepts and terminology, and refer in their own way to general theories like asset and portfolio management. These specificities create barriers for communication between the different classes of real estate management and hamper the exchange and development of knowledge in the field, what we consider undesirable. The challenge of developing a broad real estate management theory is to avoid that little more is done than to repeat general management, economic or sociological theories. The aimed broad real estate management theory should approximate the concreteness of the specific theories and cover their core, while still being relevant for practice, research and education. For this research, real estate management is considered the ongoing process of aligning the built environment and the needs of users, which happens at all scales of the built environment, for all types of users, and for all real estate aspects such as location, cost, function, time and quality. Based on this definition, the research will addresses three components: demand side, supply side and the delivery models that coordinate both sides. The research on the side of the real estate demander searches for similarities and differences between e.g. the way the demander is organised internally, the real estate procurement is executed, what is outsourced and why, what performance criteria are used, how financial markets are accessed. The research on the side of the supplier of the built environment may address topics like e.g. what is the relation of the supplier with the user, what drives production, what are context constraints, what is the status of the sustainability discourse. The search for similarities and differences in the delivery may address e.g. what models are in place, what types of institutions operate in this delivery, who intervenes in this alignment and why, what is the nature of the markets, what is the role of state intervention, what type of alignment is searched for, what performance criteria are used. The comparison of different classes of real estate management may reveal e.g.: that theories on CRE management subsequently position the CRE management department inside the user’s organisation boundary, whereas theories on housing management position this group most often outside the households’ boundary; that current practices in CRE and housing management both strive after a portfolio of conventional assets and keep away from the representative objects like monuments; that there is a trend that households want to be more involved and co-producing their house than before and thereto want to bypass the current institutional setting (sort of insourcing, self-production), whereas within organisations the trend has been for decades to less involve in the management of their accommodation and to rely on the possibilities offered by the CRE and related services market, although since a few years in-sourcing and self-provision seem to be revalued; that there is recent trend that private companies engage in the delivery of housing for their employees to deal with failing housing markets like they did in the beginning of the 20th century, and that households are re-initiating work at home, for which they need a different type of dwelling; both types of users seem to breach the institutionalised division of actors by real estate function installed for almost a century. This type of observations – and many more and of very different natures – trigger an explanation of causes and mechanisms, and together with the main theories used in the different classes of real estate management (Pestoff, 1993; Brandsen et al., 2005; Henderson & Venkatraman, 1993;…) they are the basis for building the aimed broad real estate management theory. In concreto the research method consists of theory design, academic literature study and interviews with academics.