Commercial Real Estate Development Research Articles

Тенденции девелопмента и управления коммерческой недвижимостью

The article discusses trends in the development and management of commercial real estate. The relevance of development is substantiated from the point of view of creating a digital factory and managing commercial real estate based on the principle of property management. It is emphasized that digitalization of office centers is one of the trends of the modern commercial real estate market. It was revealed that the increase in demand for renting an office with its own infrastructure inside the building based on the criteria of technology, complexity, flexibility and functionality of the services provided is due to tenants’ requests for high-quality digital space. Based on an analysis of the situation in the global commercial real estate management market, digitalization as the main trend in the development and management of commercial real estate is to focus on an integrated approach to managing all processes and operations of an office center, organizing the functioning of an office center from the point of view of environmental friendliness, digitalization, the presence of high-quality social and service infrastructure, multifunctionality, organization of a comfortable, balanced workspace.

THE EFFECT OF BOARD SIZE, PROFITABILITY AND CAPITAL INTENSITY ON TAX AGGRESSIVENESS IN PROPERTY AND REAL ESTATE SECTOR COMPANIES LISTED ON THE INDONESIAN STOCK EXCHANGE IN 2017 - 2019

The Indonesian property and real estate sector refers to the industry involved in the development, sale, purchase, and management of properties, including residential, commercial, and industrial real estate. This sector is significant in the Indonesian economy due to its contributions to employment, investment, and economic growth. This study aims to comprehensively examine the impact of board size, profitability, and capital intensity on tax aggressiveness within the context of the Indonesian property and real estate sector. Employing a quantitative approach, the research utilizes multiple linear regression analysis with Eviews software version 12 to analyze data from 60 entities in the sector listed on the Indonesian stock exchange from 2017 to 2019. The findings reveal intriguing insights. Board size is found to exert a discernible influence on tax aggressiveness, emphasizing the role of corporate governance in shaping tax strategies. However, the study challenges conventional assumptions by demonstrating that profitability does not significantly impact tax aggressiveness. In contrast, capital intensity emerges as a significant determinant of tax aggressiveness, highlighting the role of financial structure in tax planning decisions. These findings contribute to the understanding of the intricate relationship between corporate governance, financial metrics, and tax strategies in the examined sector. The research underscores the importance of nuanced decision-making in tax planning, acknowledging the varying impacts of different variables. By providing empirical evidence, this study offers valuable insights for practitioners and policymakers aiming to enhance tax strategy effectiveness and transparency.

Managing risk in commercial property development projects during the COVID-19 pandemic: Evidence from China

The COVID-19 pandemic is the biggest global health crisis in years. China is the first market primarily affected by the COVID-19 pandemic, with unprecedented lockdown measures bringing real estate and other economic activities to a standstill. This study has two objectives: (1) to identify the risks critical to the risk management of commercial real estate (CRE) development projects based on the project life cycle stages and (2) to identify the stages most affected by the COVID-19 pandemic and the risk factors at different stages. Three rounds of the Delphi study were conducted with nine experts involved in the construction project. The findings indicate that the construction, lease and sale phases are prone to significant risks. Additionally, the analytic hierarchy process (AHP) identified ‘health and safety risk’ as the most critical risk factor during the construction phase and ‘marketing and payback risk’ as the most critical risk factor during the lease and sale phase. This study enhanced the effectiveness of risk management practices for implementing CRE development projects in China.

What Is Economic Development? And What Is the Job of an Economic Development Professional?

Economic development (EcD) introduces new goods and services into a region's portfolio of traded products or expands the productive capabilities of existing members of a region's economic base. And EcD organizations are intermediaries that reduce risk and transaction costs by honestly representing their community and region to potential business investors. There are five closely related yet separate development practices. Four (community, workforce, housing, and commercial and industrial real estate development) create long-term regional EcD assets. While those assets are required for EcD to occur, they are insufficient to generate EcD outputs. Investments resulting in the production of goods and services are also necessary. EcD is a regional activity because the markets for three of the development practices are regional: labor, housing, and commercial and industrial real estate. Finally, EcD is both an art and a science. The art of EcD is connecting the dots that others cannot see. The science is getting deals done. Together they create investment momentum that builds optimism, generates trust, and mitigates risk.

Articulation work: Value chains of land assembly and real estate development on a peri-urban frontier

If the entanglements of real estate and finance capital are pivotal in ongoing urban transformations in cities of the global south, then a less visible but equally vital dimension is the process of land assembly on which residential and commercial real estate speculation and development are premised. This paper pries open the value chain of land assembly that underlies these transformations in a rapidly expanding peri-urban frontier of Bengaluru, India. Drawing on detailed interviews with land market intermediaries, operating across different scales, who were instrumental in assembling agricultural land for a large apartment complex, the paper shows how existing forms of social power and local knowledge are harnessed to create inter-scalar linkages that enable the creation and extraction of value in Indian real estate. It makes the case for understanding the economic and cultural work of intermediaries in animating land's value chain as ‘articulation work’. Finally, the paper assesses the varying forms and quantum of value that are generated and captured by different actors in the value chain, which stretches from the landowning farmer up to a major real estate company, to reflect on the micro-dynamics of speculative urbanism and agrarian urbanization.

Approach to Prioritizing the Commercial Real Estate Development Risk

After 30 years of war in Sri Lanka, the demand for real estate has increased tremendously across the nation. Similarly, numerous real estate sub-sectors have avidly participated in the worldwide boom. However, with failures and poor functioning of many investment projects, the industry's risk management reputation has been put in jeopardy, followed by the coronavirus (COVID-19). Though it is less popular among Sri Lankan property developers, risk management strategies in development projects have become a pressing requirement. This paper's goal is to look at commercial property development risk elements from the perspective of a real estate developer in relation to Social, Economic, Environmental, Technological, Political, and Pandemic Risks. The research first evaluates risk variables using a super decision software model based on the Analytic Hierarchy Process (AHP), then prioritizes the most important risk factors, and lastly examines effective risk management measures for successful real estate developments. The data collection has been carried out using interviews through telephone conversations with the help of a structured questionnaire. Accordingly, 35 risk factors have been assessed altogether. For the three projects, the synthesized values were 1.0000, 0.510763, and 0.604037, respectively. Based on the analysis of superMatrix calculation, project A is regarded as the best alternative project in such circumstances. Pandemic Risk, Economic Risk, and Political Risk have all had a significant impact on the primary risk criteria. Therefore, COVID-19 Pandemic Risk Emergence, Workforce Availability, Duration, Delays in Council Approval/License Approval Process and Natural Disaster Impact were identified as the highest influenced sub-risk factors. Identifying the risk factors on this avenue will also help in making better investment decisions while increasing the unpredictable nature of the real estate field and future satisfaction of loan team investment goals within the country.

Real Estate Politik: Democracy and the Financialization of Social Networks

The power of social network platforms to amplify the scale, speed, and significance of everyday communication is increasingly weaponized against democracy. Analyses of social networks predominantly focus on design and its effects on politics. This article shifts the debate to their business model. Built as platform businesses, social networks are privately owned public spaces with structurally limited democratic affordances. Drawing from the history, theory, and practice of land use, I develop an analogy between the financialization of land by commercial real estate development and the financialization of attention by platform businesses. Historical policies, such as incentive zoning and exclusionary zoning, shed light on how platform businesses use systems of measurement and valuation to conflate users' roles, tokenize the incentives that drive behavior, and defer the ethical responsibilities businesses have to the public. While the real estate framing reveals social networks' structural flaws and colonial roots, lessons from urban planning, community land trusts, and Indigenous land stewardship can inform their regulation and reform. Building on the broader effort to embed ethics in the development of technology, I describe possibilities to steward social networks in the public interest.

Application Mixed Integer Non-Linear Programming in Commercial Real Estate Development

Application Mixed Integer Non-Linear Programming in Commercial Real Estate Development

A risk assessment model of commercial real estate development projects in developing countries

A risk assessment model of commercial real estate development projects in developing countries

ФОРМИРОВАНИЕ МЕХАНИЗМА ДЕВЕЛОПМЕНТА КОММЕРЧЕСКОЙ НЕДВИЖИМОСТИ НА СТАДИЯХ ЖИЗНЕННОГО ЦИКЛА

In the conditions of the dynamic development of the commercial real estate market, the interest of real estate owners in the issues of effective management of objects at various stages of the life cycle is increasing. Despite the research carried out in this area, there is a lack of knowledge in the study of modern problems of real estate development at all stages of the life cycle. The article is devoted to the analysis of commercial real estate development processes and the improvement of the commercial real estate development mechanism, taking into account the stages of the life cycle.

Performance metrics and required returns for UK real estate development schemes

ABSTRACTReal estate development has received less scrutiny than real estate investment in terms of appraisal practices and performance measurement. This is despite the inherent uncertainty and financial risks associated with development as an activity. We investigate market practices regarding performance metrics and return expectations both for residential and commercial real estate development in the UK, exploring what is considered as an appropriate return and how this varies according to type and duration of scheme, and method of appraisal used. After examining the literature and the information available on ex-post returns from development activity, results from a survey of real estate developers are reported, supplemented by findings from interviews. The results suggest that the use of traditional residual valuation techniques dominates discounted cash flow models when appraising development projects, particularly among residential developers, while profit-on-cost and profit-on-value are the most popular metrics for quantifying required returns. Unlike NPV or IRR, these metrics do not account for the timing of cash flows, raising questions about the robustness of appraisals in this sector. Such metrics might suffice if required profits are adjusted in ways that are consistent with scheme duration and risks, but it is unclear that this is currently the case.

Risk assessment in commercial real estate development

PurposeThe purpose of this paper is to analyze the commercial property development risk factors from the entrepreneur’s point of view against social, economic, environmental, technological and political risk assessment criteria. After that, this study aims to assess the risk factors based on the analytical network process (ANP) model and to prioritize the key risk factors to identify which risk factor is highly affected to the commercial development process.Design/methodology/approachThe data were collected through face-to-face interviews using a structured questionnaire. The analysis of the risk factors involved the ANP model using super decision software.FindingsThe results revealed that there are five major risk factors such as environmental, social, economic, technological and political risk, and 32 sub-risk factors. According to the super matrix calculation, the synthesized values for three projects were 0.0704, 0.0532 and 0.0431, respectively. It was identified that Ward City was 0.0704, indicating that it is comparatively less risky and, hence, can be categorized as the best development and considering the sub-risk factors; the results show that the highly affected risk factors for the development are: the council approval process, climate changes and natural disaster, and the least affected risk factors are confidence to the market, lifecycle value, investment return and currency conversion factor.Practical implicationsThe paper includes implications for the development of commercial properties, risk and risk assessment criteria to make risk management strategies and policy implementation.Originality/valueThe research findings are helpful in improving risk management strategies in the country, and policy formulation should focus on the above identified three risk factors in order to mitigate the risk in every stage and to achieve sustainable project development while increasing the satisfaction of long-term investment goals.

Regional Development of Residential and Commercial Real Estate in Poland and the Risk of Real Estate Cycles

The property market is local and thus regional factors have a very important impact on its evolution. However, global factors also have an impact. This paper explains that fast economic growth can lead to strong cycles in the market and also cause problems for the stability of the economy. With a case study of the housing market in Warsaw we show that very different economic and regulatory factors can create cycles which look quite similar at first sight. We conclude that one needs to understand the fundamentals of a given cycle to be able to smooth it. The main driver of the cycle in Poland is the significant shortage of housing units, and thus people react very strong to any possibility of improving their living conditions. Rises in income or declines of mortgage costs trigger a demand boom, while the supply side is constrained by regulations and increasing construction costs. The excessive demand leads to quite strong cycles which could be smoothed with a large amount of rental housing.

Creating urban platforms — Opportunities and challenges for innovation in commercial real estate development

Current theories on commercial urban development are dominated by the concept of linearity, which does not adequately take into account the demands of adaptation posed by the pace of change in digital developments, a pace that stands in marked contrast to the pace of change in physical developments. In the hi-tech sector, platform ecosystems have been employed to accommodate innovation and change. This paper explores the potential application of platform ecosystem theory to the commercial urban development process, where there is now great uncertainty regarding the future economic implications and societal requirements of physical commercial space. The boundary conditions for value creation in platform ecosystems are as follows: modularity, standardisation, complementarity and connectivity. Each is explored through a survey of key actors in recently completed commercial urban developments. The analysis identifies significant differences in the capacity of public- and private-sector actors to promote the creation of platform ecosystems, particularly in the complementary actions of development participants. Applying an approach to urban development based on a platform ecosystem might offer great opportunities, but will also be limited by the major challenges identified in this paper.

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.

Application of DSM in process management of a PE commercial real estate development project

PurposeAfter the drawbacks in the process management of China PE commercial real estate development project are analyzed, it is necessary to introduce a more integrated and advanced tool to solve them. The paper aims to discuss this issue.Design/methodology/approachA standard process model was proposed first. Based on the model, a coupled activity dependency model was also built by structural tool design structure matrix (DSM), the detailed matrix involving 119 activities and 322 information dependencies. Next, two large processes coupled blocks were generated by the sequencing algorithm and tearing algorithm. Then, the general simulation framework with rework probability and rework effect was introduced to do empirical research for one of the activities blocks due to the merit of solving rework of DSM.FindingsThese results showed that key activities were rearranged, that information interactive scope for them was optimized and that collaborative organization interface was built. And the expected duration after simulation was 131 days at 90 percent percentile, providing the objective basis of process arrangement to some extent and decreasing the risk of prospective yields during fund period.Originality/valueThis paper is a qualitative and quantitative practical research for the process management of PE commercial real estate development projects in China based on a real project which has begun construction in 2014.

Norfolk Southern Corporation—Century Bonds

Norfolk Southern Corporation (NSC), a railway operator, was issuing a $250 million bond with a coupon of 6% and a maturity in 2105. The bonds were added to an existing $300 million 6% debt issue due 2105, which the company first sold in 2005. A bond analyst at Tidal Insurance (Tidal), has heard that the original issue of this century bond was to be $100 million, and it seemed that strong investor demand pushed NSC, to increase the total amount to $250 million. He has to decide whether Tidal should include the NSC bond in its bond portfolio. Excerpt UVA-F-1733 Rev. Aug. 13, 2015 Norfolk Southern Corporation—Century Bonds On Tuesday, August 24, 2010, Fred Vera was drinking a cup of coffee when he picked up the Financial Times and saw the news. Norfolk Southern Corporation (NSC), a railway operator headquartered in Norfolk, Virginia, was issuing a $ 250 million bond with coupon of 6% and a maturity in 2105. The bonds were added to an existing $ 300 million 6% debt issue due 2105 that the company first sold in 2005. He immediately saw a potential investment opportunity and started thinking of the advantages of this century bond for his firm. Vera, a bond analyst at Tidal Insurance (Tidal), had heard that the original issue of this century bond was to be $ 100million, and it seemed that strong investor demand pushed NSC, to increase the total amount to $ 250 million. He had to decide whether Tidal, a regional life insurance company, should include the NSC bond in its bond portfolio. Norfolk Southern Corporation One of the leaders in the transportation industry, NSC controlled a major freight railroad, Norfolk Southern Railway, which operated approximately 21,000 route miles in 22 states and the District of Columbia. It ran the most extensive intermodal network (freight transportation by a combination of train and truck) in the eastern half of the United States. It transported coal and industrial products through its Triple Crown Services unit. Exhibit 1 shows Norfolk Southern Railway's system network. Other businesses in which NSC participated included commercial real estate development, sales and leasing of rail property and equipment, and leasing and management of coal, oil, gas, and other minerals. . . .

Delineating hazardous CO2 fluxes from acid mine drainage

Incidents of hazardous accumulations of CO2 in homes built on or near reclaimed mine land, in the last decade, have been shown to be linked to neutralization reactions between acidic mine drainage and carbonate material. Recent research has shown that CO2 fluxes on reclaimed mine land with this hazard are, sometimes, spatially autocorrelated (i.e., the spatial variability is not random). This result implies geostatistics can be used to delineate hazardous areas where fluxes are likely to exceed established thresholds. This study applies sequential Gaussian simulation to delineate this emerging hazard on a site in southwestern Indiana, USA. Due to lack of regulatory threshold limits for CO2 flux at the current time, the authors conduct a sensitivity analysis of the threshold limit using the 75th, 90th and 95th percentiles of the measured fluxes for the first day of monitoring. These limits are used to produce hazard maps, which are validated with the known hazard at the site. This work further shows the potential of surface CO2 flux monitoring as a cheap and effective strategy to monitor and delineate such hazards to avoid residential and commercial real estate development in high risk zones.

Spatio-temporal features and the dynamic mechanism of shopping center expansion in Shanghai

Since the first modern shopping centre was built in the United States in the 1920s, shopping centres have gradually become representative patterns of economic growth and consumerism in the United States, and these patterns are now trending globally. Shopping centres have demonstrated tremendous development potential since their initial entry into China in the 1990s. Shanghai is the most economically prosperous city in China, and the development and evolution of its shopping centres reflect the trend in China's commercial real estate development. Therefore, based on the central-place and agglomeration economy theory, this paper quantitatively measures and analyses the spatial gravity, extending direction, agglomeration characteristics and hierarchical structure of Shanghai's shopping centres using GIS (Geographic Information Systems) and spatial analysis. Moreover, this paper analyses the dynamic mechanism of urban development and its patterns of centripetal and centrifugal movement. The results demonstrate the following. (1) The spatial gravity points are located in the districts of Huangpu, Luwan and Xuhui in the city centre and within the inner ring. In addition, there is a trend to be gradually near the middle ring, exhibiting an obvious tendency from the northeast to the southwest. (2) Shopping centres in Shanghai exhibit a clustered distribution in the centres of urban areas, which form numerous business districts that extend in the same direction. (3) The hot spot analysis is a very effective method for identifying the hierarchy of business circles. (4) Planning by the government is the most important external impetus, and commercial agglomeration is the internal force determining the spatial expansion of shopping centres. Additionally, urban transportation patterns have an obvious influence on the spatial morphology of shopping centres. (5) Over the last two decades, the spatial development of Shanghai's shopping centres has reached a balance between the centripetal and centrifugal forces. In other words, we have not observed a tendency towards suburbanization, which indicates that Shanghai's shopping centres are still in the early stages of development. Therefore, future shopping centres may be primarily located in the stretch or peripheral zones of the city.

On real estate development activity: the relationship between commercial and residential real estate markets

Real estate development and the construction of commercial and residen- tial buildings largely determine the future spatial distribution of job and residential locations, thereby giving public planners an instrument with which they can steer urbanization. This paper measures whether the real estate development and urban management planning process, in terms of construction permits, enables a relation- ship between commercial and residential real estate developments and thus between futurejobandresidentiallocations.WeusedataonconstructionpermitsfortheNether- lands over 1990-2012. Our conclusion is that the real estate development and urban planning process, in terms of construction permits, allows a complementary effect between commercial and residential real estate developments. A one per cent increase in commercial real estate development permits leads to a 0.35 per cent increase in residential real estate development permits. Finally, the data reveal differences across regions suggesting that different local factors are at work.