Commercial Real Estate Projects Research Articles

Strategic Choice of Commercial Real Estate in China's First-Tier Cities in The Oost-Epidemic Era

In recent years, affected by the Covid-19 and the current policy regulation of China's residential real estate market, the commercial real estate market has shown repeated fluctuations. During a historical period (2005-2015), thanks to the government's vigorous development of real estate and the influx of many people into large cities, commercial real estate in first-tier cities have experienced long-term prosperity. Some leading companies have earned high profits and occupied a large market share through the cycle of "financing - investment and construction - selling or operating - refinancing...". However, this phenomenon began to change in 2015. As the country adjusted its macro policies, financing costs continue to increase, the total area of new commercial real estate projects is decreasing year by year, and the market size of traditional commercial real estate is also shrinking, making people soberly aware that the prosperity and success of commercial real estate are deeply dependent on national development strategies, while depends on social and economic development and people's consumption habits. The study's results found that since 2019, the expansion scale and profitability of China's commercial real estate have both shrunk. On the one hand, residents' consumption ability and willingness have weakened due to the impact of Covid-19 and the business cycle. On the other hand, young consumer groups are no longer satisfied with a single business model; the upgrade of the consumption content and the rise of e-commerce shopping have had an impact on traditional commercial real estate, which forces companies to make corresponding adjustments to changes in the external environment when deciding long-term strategies. Using the PEST analysis tool to create a comprehensive and objective analysis of the current political, economic, social, and technological environment will help enterprises better judge external factors. Therefore, when formulating development strategies, they can better align their development plans with the country's new development strategy, earning strategic initiative and maintaining competitive vitality in the recent historical period.

Designing sustainable office spaces – how to combine workspace characteristics with sufficiency strategies

Contemporary workspace and office concepts are part of many major commercial real estate projects and have been continuously developed over many years. With a rising awareness for sustainable development, workspace and office concepts are increasingly being considered in terms of their environmental performance. Sustainable design strategies therefore traditionally differentiate between efficiency, consistency, and sufficiency, whereas the latter approach is the least explored in the construction industry. Sufficiency can be described by a user behaviour characterized by frugality and modesty, as opposed to wasteful consumption. Moreover, the strategy of sufficiency is linked to a high and critical awareness of using natural resources and environmental impacts which also affects the built environment. The aim of this paper is therefore to combine these two subject areas in a structured way and derive potentials for the sufficient development of office concepts.Based on a literature review in the field of workspace design and flexible workplace management, design features of office spaces are conceived and compiled according to planning aspects in office concepts based on employee needs. Another literature review in the field of sufficiency in the building sector provides the corresponding structure for the considered sufficiency strategies. Sufficiency measures follow recurring principles for the reduction of resource consumption. Essential principles of impact are identified and presented in this paper. The investigated topic areas are compiled together in a logical model based on a developed mapping framework. This forms the basis for defining sufficient measures that can be derived to sufficiency strategies in the project development of office buildings. The basis of all measures is to strive for a minimum level of resource consumption that is necessary to satisfy the needs of the users and that is considered valuable by them, following the basic idea of the sufficiency approach. The results are validated using an office building in the planning stage. The paper leads to a common understanding and structuring of design features of future office spaces and their environmental impact. Furthermore, the approach provides guidance for concepts on how design features can be considered regarding sufficiency strategies.

Ensuring the strategic focus of a corporate project management system for commercial real estate

Corporate trajectories ultimately determine economic growth or recession. They depend on the choice of development strategies selected for corporate management systems designated for commercial real estate projects. Strategic focusing tools of corporate management systems are used to select the best corporate development strategies.
 This article identifies the objectives and methods of strategic focusing of corporate project management systems for commercial real estate. The co-authors describe the algorithm of a foresight project and options of the criteria-based choice of the strategic focus for a corporate system. The principal criteria for a portfolio of commercial real estate projects are defined.
 The implementation of corporate management strategies by the company engaged in the construction of commercial real estate in Europe (France) is considered.
 The strategic focusing of a corporate management system, designated for commercial real estate projects, allows to make a statement that there is no universal solution to the general problem of multi-criteria optimization of strategic alternatives in the long run, but the very formulation of the choice problem requires a detailed quantitative description of the subject area. The solution allows to set the main strategic trend of a corporate management system focused on commercial real estate projects, taking into account the polycentric format of the interruptive-extended type of activity.
 In practical terms, this phenomenon means the need for:
 • the multi-criteria restructuring of a real estate portfolio by the type of real estate, its spatial localization, as well as by the steps and stages of the life cycle of commercial real estate projects;
 • the regard for the economic efficiency of the project cycle as a whole and its separate steps and stages, in particular, tempo-based drops in project capitalization broken down by the stages of its life cycle, the dynamics of the total cost of ownership, integration and outsourcing opportunities, social and environmental filters, etc.
 • ensuring high mobility of the corporate management organization structure, that is, a continuous type of organizational restructuring as a modern feature of corporate performance.
 Hence, a full-fledged solution to the problem of strategic focusing of a corporate management system for commercial real estate projects requires the clarification of scientific approaches and the development of an organizational model of the system, taking into account the continuous nature of its restructuring.

Earth, Wind, and Fire: PACE Plays a Vital ESG Role

Interest in environmental, social, and governance–focused investments has been on the rise as investors look to address critical issues such as climate change, diversity, human rights, and company stewardship, to name a few. At the same time, sustainable investing is at an inflection point. As attention shifts away from how people invest, the focus is migrating to the outcomes of those decisions, such as thinking proactively about how our actions affect the environment. Initially, environmental concerns were addressed primarily through exclusionary practices and avoidance of investments in industries that were deemed harmful to the planet. However, the dialogue has evolved to include more proactive measures with outcomes, including reduction in greenhouse gas emissions, water conservation, and air quality improvement. As property owners look to make building upgrades addressing energy efficiency, renewable energy, water conservation, HVAC concerns, and resiliency measures, property assessed clean energy programs can play a vital role in financing such initiatives. <b>TOPICS:</b>ESG investing, other real assets, legal/regulatory/public policy <b>Key Findings</b> ▪ Two main catalysts are driving momentum in the property assessed clean energy (PACE) sector. Legislation is a major force behind the growth seen in PACE. Second, increased focus on environmental, social, and governance initiatives, for both entities and investors, is another driving factor. ▪ Commercial PACE has picked up momentum as more property owners become aware of PACE and find it to be an attractive addition to the capital stack for financing qualified building improvements aimed at addressing climate change and natural disaster concerns. ▪ Interest in new construction and gut rehabilitation commercial PACE has been rising. Four components encapsulate DBRS Morningstar’s risk analysis for commercial real estate projects: environmental, construction progress, strength of the sponsor, and the first mortgage lender.

Algorithm for the development project’s technology portfolio formation

The article presents the results of a study on the portfolio of technologies formation upon implementation commercial real estate projects. The aim of the study was to investigate the strategies and optimization of forming technology portfolio at the pre-investment stage. The relevance of the article the problems that arise in the interaction of the project organization and the developer. The article proposes a methodology for portfolio formation based on the use of multifactorial space. As a key indicator of decision-making, a priority coefficient has been developed. An algorithm for the formation of a technology portfolio during the implementation of a project at a conceptual stage has been developed; testing was carried out on the example of facade system solutions. The proposed algorithm can complement the existing quality control systems for the stages of design, construction and operation of an investment construction project.

Sources of Saudi Conduct: How Saudi Family Law and Royal Polygyny Produce Political Instability

Unlike other areas of law, where rules have either been borrowed from Western regimes or only apply to certain segments of society, Saudi family law touches every member of Saudi society, from ordinary citizens to royalty, and originates in an Islamic legal tradition that predates most modern legal systems by several hundred years. Nonetheless, most writers on Saudi Arabia (the Kingdom) have largely neglected the role of Saudi family law in influencing the Kingdom’s royal family and policymaking, despite the dominance of family businesses, tribes, and family offices in the Saudi economy and state. This Article outlines how Saudi family law produces economic incentives that, without reform, make the maintenance of political stability in the Kingdom unlikely past three generations.Accordingly, this Article can be understood as an alternative and supplement to the dominant political science theory for understanding Saudi policymaking, Rentier State Theory (RST). Specifically, this Article demonstrates how the incentives produced by Saudi family law can more accurately predict Saudi policymaking and disruptive political events than RST, including, but not limited to, the Kingdom’s Ritz-Carlton purge and building of largescale commercial real estate projects, which might otherwise appear irrational to outside observers. The Article begins with a discussion on the mathematics of polygamy in the Kingdom and ends with a discussion of how the incentives produced by Saudi’s family law system produce far-ranging implications for both the Kingdom’s neighbors and its current allies, including, but not limited to, the United States and Israel. The Article concludes with legal reforms that the current Saudi state may wish to undertake, should it wish to avoid a similar fate to the previous two Saudi states, both of which collapsed in under three generations (1744–1814; 1824–1891). Additionally, reforms suggested over fifty years ago by Saudi prince Talal bin Abdulaziz Al Saud are analyzed, as well as various legal customs found within Jordan, which Saudi policymakers may wish to borrow from and modify to provide the Kingdom increased political stability in the longer term.

The Mechanism for Managing the Business Potential of Commercial Real Estate Projects

The article considers issues related to the development and justification of recommendations for improving the mechanism for managing the business potential of commercial real estate projects in accordance with the current conditions of a changing market environment. Proposed criteria for assessing the quality factors of the commercial real estate projects. The implementation of the mechanism for managing the business potential of commercial real estate projects on the example of the trade &amp; office center project is considered.

The Innovation and Development of Commercial Real Estate in China

In recent years, China's commercial real estate projects have sprung up all over the country. After the high fever, there are many commercial complexes, shopping centers and the phenomenon of homogenization phenomenon. The development of the commercial real estate has entered a bottleneck period, we need to propose countermeasures in calm reflection and actively guide it out in the light of its general trend, and eventually entered the shared green road of sustainable development. This article will explore the innovation mode and transformation thinking of the future commercial real estate from two dimensions: the traditional commercial real estate seeking self-breakthrough mode and the new commercial real estate, actively opening up the new path.

From Kampungs to Condos? Contested accumulations through displacement in Jakarta

Across cities of the global South, major initiatives are underway to assemble land from informal settlements in order to make it available for large-scale infrastructure and commercial real estate projects. Driven by global city aspirations, profit-seeking developers, demands from emergent middle classes for modern residential, consumption and recreational spaces, and, last but not least, the availability of finance, these land transformations seek to commodify and enclose residential urban commons and involve the displacement of thousands of urban residents. Through an examination of two field sites, a ‘legal’ kampung where land is being acquired through negotiations between kampung residents with land rights and developers’ land brokers, and two ‘illegal’ kampungs whose residents were evicted in the name of flood mitigation, we conclude that the default theory for explaining these processes—accumulation by dispossession—is inadequate for capturing the variegated and complex nature of such processes. By thinking through Jakarta, we seek to provincialize the dominant concept of accumulation by dispossession, proposing an extension that we suggest is better attuned to capture the distinct features of Southern cities: Contested accumulations through displacement.

Commercial property whole-life costing and the taxation environment

Purpose – The main purpose of this paper is the incorporation of life-cycle costs (LCC) and whole-life costing (WLC) method and the taxation environment into the investment appraisal procedure for commercial real property projects. Design/methodology/approach – The paper initially presents the methodologies of LCC and WLC together with the NPV measure for the evaluation of real estate investments. These methods are incorporated into a decision-making model using mathematical approaches. The model is applied to a typical commercial property project (office building) in order to explore the significance of impacts from changes in structured variables and the taxation environment by introducing direct, indirect and property taxes in the evaluation of commercial real estate projects. Findings – Testing of the methodology on the Greek economic environment revealed that time, cost, the tax regime, the financial variables of funding and the monetary and fiscal environment in a commercial real property project are the main variables of net present value (NPV) of the investment. Practical implications – From the calibration of any impact from affected variables, decision-making aiding tools can be extracted for controlling the project throughout its entire life-cycle. Originality/value – An integrated WLC mathematical model for the investment appraisal of commercial property projects is introduced. The herein proposed methodology contributes to taxation policy and real estate theory in general and assists industry professionals in effective commercial property management and decision-making.

Risk Decision Analysis of Commercial Real Estate

With the increasing of construction of logistics parks, it is essential for commercial real estate project to study on risk decision to avoid redundant and blind construction. Based on risk essence, the paper analyses the attitude of investment decision-makers on risk benefits. Finally, the paper improves the expected utility theory and applies the prospect theory to risk decision of commercial real estate project to provide scientific and objective basis for Project Investment Decision.

Evaluating Real Estate Development Using Real Options Analysis

This paper uses an example involving a commercial real estate project to demonstrate the practical application of real options analysis. The approach described can be used to value the project at any stage of construction, which is especially useful when market conditions are poor and suspension of many partly-completed projects is being considered. It builds on static DCF analysis and offers instructors the opportunity to give students with basic knowledge of the binomial option pricing model exposure to a practical real-options toolkit. All the calculations can be performed in a spreadsheet and only one parameter - the volatility of the price of the completed project - needs to be estimated in addition to those required for static DCF analysis.

Call Options and Liquidation in Commercial Mortgage Financing

This paper models a commercial real estate project where a wealth‐constrained manager uses outside debt financing to purchase a project who’s return depends on future economic conditions and the manager’s investment in the project. It is shown that it is inefficient to finance the project with callable debt. This prediction is consistent with observed real estate financing practice. I also model the outcome of financial distress allowing for (1) debt forgiveness, (2) equity in exchange for debt forgiveness, and (3) foreclosure. The model motivates (1) why commercial real estate loans are often foreclosed, and (2) why lenders foreclose assets at fire‐sale prices.

Arts and Craft: Implementing an Arts-Based Development Strategy in a “Controlled Growth” County

This study examines the partnership between local growth machines and the arts. Specifically, it focuses on the nine-year struggle over the construction of a performing arts/hotel resort complex on a large tract of central California coastal property. Through interviews with key persons connected with the project, and through analyses of campaign literature and other archival sources, this case study attempts to provide empirical evidence for the thesis that construction of arts facilities in commercial real estate projects is used to blunt opposition to development. Implications of the findings are discussed in light of recent work on the arts/growth machine alliance, neighborhood mobilization against development, and the symbolic politics of land-use disputes.

Choosing between fixed-and adjustable-rate mortgages: The case of commercial mortgages

This article reports on the determinants of the ARM choice for commercial real estate projects. The theoretical literature suggests that commercial real estate projects are more likely to be financed with an adjustable-rate mortgage (ARM) if the project's income stream or value is expected to rise with inflation over time. The empirical model estimated is a structural probit probability model of the ARM choice. Our results demonstrate that commercial borrowers typically place great emphasis on relative interest-rate differentials when deciding which mortgage is best. We also find that commercial mortgage borrowers will ordinarily be reluctant to issue an ARM when the fixed interest rate is low.

Decision Support and Expert Systems for Real Estate Investment Decisions: A Review

Decisions about investment in commercial real estate projects are influenced by many factors, both quantitative and qualitative. With the aid of computerized decision support and expert systems, investors and developers are applying increasingly sophisticated forms of analyses to project screening, portfolio management, and other high-level decisions related to real property assets. In this field, even small improvements in decision making can have major monetary impact. Although many off-the-shelf and custom-built systems have been developed, these computer technologies have yet to be fully exploited by the real estate investment industry.