The risk and return of farm real estate and the “bad data problem”

2016 ◽  
Vol 76 (1) ◽  
pp. 140-150
Author(s):  
Todd Kuethe
Keyword(s):  
Real Estate ◽  
Real Estate Finance ◽  
Risk And Return ◽  
Content Type ◽  
The Real Estate ◽  
Asset Pricing Model ◽  
Real Estate Returns ◽  
Pricing Anomalies ◽  
Appraisal Smoothing ◽  
Bad Data

Purpose – The purpose of this paper is to explore the consequences of appraisal smoothing in the estimation of the risks and returns of farm real estate. It examines the degree to which the risk and return characteristics of farm real estate are an artifact of the methods used to measure aggregate property values. Design/methodology/approach – A multifactor asset pricing model is estimated using farm real estate returns in a manner consistent with prior research, as well as using farm real estate returns calculated using two synthetic unsmoothing procedures developed in the real estate finance literature. Findings – The model suggests that unsmoothed farm real estate returns exhibit characteristics that differ from those suggested by prior research. The unsmoothed returns suggest a stronger correlation with economy wide investment risks. Originality/value – This is the first study to evaluate the impacts of appraisal smoothing in a farm real estate context. It provides a simple framework for addressing many of the pricing anomalies associated with farmland.

Disruptive potential of real estate crowdfunding in the real estate project finance industry

2018 ◽  
Vol 36 (5) ◽  
pp. 597-619 ◽  
Author(s):  
Nicolle Montgomery ◽  
Graham Squires ◽  
Iqbal Syed
Keyword(s):  
Real Estate ◽  
Disruptive Innovation ◽  
Project Finance ◽  
Real Estate Finance ◽  
Content Type ◽  
The Real ◽  
The Real Estate ◽  
Finance Industry ◽  
Real Estate Project ◽  
Disruptive Innovations

Purpose The purpose of this paper is to review the literature on the Disruptive Innovation Theory and on the disruptive potential of real estate crowdfunding (RECF) in the real estate finance industry, assessing whether RECF constitutes a potentially disruptive innovation to the real estate finance industry. Based on a review and synthesis of the literature, the paper advances an initial conceptual framework of core characteristics of disruptive innovations. This framework is used to examine the disruptive potential of RECF in the real estate finance industry. Design/methodology/approach This paper is a systematic literature review that synthesizes and analyzes relevant extant research articles retrieved from online databases. Findings Findings suggest that according to the theory of disruptive innovations, and the core characteristics of disruptive innovations, RECF is a potentially disruptive innovation to the real estate finance industry. RECF seems to generally align with the classic characteristics of disruptive innovations. A more comprehensive and systematic analysis, supported by empirical data, is necessary to evaluate whether and to what extent RECF constitutes a disruptive innovation to the real estate finance industry. Research limitations/implications This study has only captured and reviewed articles published and available in database searches. RECF is a nascent field that has recently begun receiving academic attention. Practical implications Real estate plays an integral part in the economy, and the way it is financed has become an increasingly important issue following the Global Financial Crisis. This paper provides useful insights for assessing whether and to what extent RECF may be disruptive to the real estate finance industry. Social implications RECF may potentially improve accessibility and affordability of real estate finance, thereby helping to address the problem of shortage of real estate project finance. Originality/value While RECF is portrayed in the academic and gray literature as a disruptive innovation, its disruptive potential is yet to be determined. This paper advances an initial conceptual framework of defining characteristics of disruptive innovations. This framework is used to evaluate RECF as a potentially disruptive innovation in the real estate project finance industry. This study forms a basis for future empirical examination of the disruptive potential of RECF in the real estate finance industry.

Information security in the South Australian real estate industry

2014 ◽  
Vol 22 (1) ◽  
pp. 24-41 ◽  
Author(s):  
Deepa Mani ◽  
Kim-Kwang Raymond Choo ◽  
Sameera Mubarak
Keyword(s):  
Risk Management ◽  
Information Security ◽  
Real Estate ◽  
South Australia ◽  
Security Threats ◽  
The South ◽  
Content Type ◽  
The Real ◽  
The Real Estate ◽  
Real Estate Sector

Purpose – Opportunities for malicious cyber activities have expanded with the globalisation and advancements in information and communication technology. Such activities will increasingly affect the security of businesses with online presence and/or connected to the internet. Although the real estate sector is a potential attack vector for and target of malicious cyber activities, it is an understudied industry. This paper aims to contribute to a better understanding of the information security threats, awareness, and risk management standards currently employed by the real estate sector in South Australia. Design/methodology/approach – The current study comprises both quantitative and qualitative methodologies, which include 20 survey questionnaires and 20 face-to-face interviews conducted in South Australia. Findings – There is a lack of understanding about the true magnitude of malicious cyber activities and its impact on the real estate sector, as illustrated in the findings of 40 real estate organisations in South Australia. The findings and the escalating complexities of the online environment underscore the need for regular ongoing training programs for basic online security (including new cybercrime trends) and the promotion of a culture of information security (e.g. when using smart mobile devices to store and access sensitive data) among staff. Such initiatives will enable staff employed in the (South Australian) real estate sector to maintain the current knowledge of the latest cybercrime activities and the best cyber security protection measures available. Originality/value – This is the first academic study focusing on the real estate organisations in South Australia. The findings will contribute to the evidence on the information security threats faced by the sector as well as in develop sector-specific information security risk management guidelines.

Potential for optimising organisational structures in the technical due diligence for real estate transactions in Germany

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yannis Steffen Oetken ◽  
Christian Hofstadler ◽  
Felix Meckmann
Keyword(s):  
Real Estate ◽  
Transaction Management ◽  
Due Diligence ◽  
Content Type ◽  
The Real ◽  
The Real Estate ◽  
Theoretical Approaches ◽  
Transaction Process ◽  
Organisational Structures

PurposeThe individual levels involved in real estate management are thoroughly discussed in the literature. This paper provides a structured meta-analysis of the different theoretical approaches in German-speaking countries. It also investigates the integration of transaction management and technical due diligence into the concepts of organisation theory. In this process, the interfaces are analysed and optimised models are developed for transferring the technical due diligence findings to the operational level.Design/methodology/approachInterviews with transaction management experts were conducted based on a narrative literature review. These interviews shed light on how the components of transaction management and due diligence are integrated into the transaction process, with a particular focus on technical due diligence. They also provide insights into how the related results are taken into account in relation to the transaction, and how they are transferred into the operational phase.FindingsIt becomes apparent that the role of transaction management is not clearly defined and delimited in the structural model of the real estate industry. Technical due diligence findings are usually transferred to the operation of the property via several, manual interfaces with corresponding losses of knowledge. The related models derived and developed for the purpose of operational optimisation define the role of transaction management against a technical background and identify the interfaces to be considered.Practical implicationsThe significance of transaction management for subsequent operations is discussed and elaborated on. More specifically, transferring safety-relevant, high-priority findings from the technical due diligence exercise plays a crucial role for the modelling stage. On the implementation level, the derived models serve as a basis for customising the internal organisational structure.Originality/valueIn Germany, there has hardly been any research into the involvement of technical experts in the real estate transaction process to date. This paper provides initial approaches to optimising organisational structures and sustainably integrating technical due diligence findings into real estate operations.

Designing an accommodation strategy: findings from an architecture school

Facilities ◽  
2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Chaiwat Riratanaphong
Keyword(s):  
Real Estate ◽  
Development Process ◽  
Supply And Demand ◽  
Development Theory ◽  
Architecture Education ◽  
Data Accessibility ◽  
Content Type ◽  
The Real Estate ◽  
Process Factors ◽  
Space Requirements

Purpose This study aims to explore the need for space (demand) and the provision thereof (supply) in the Faculty of Architecture building at Thammasat University Rangsit campus using variables from the designing an accommodation strategy (DAS) framework; these variables are incorporated to test and improve the framework. Another purpose is to examine the planning and development of the faculty building to understand its strategy, which serves as a means to contribute to the planning and development theory. Design/methodology/approach A case study of the Faculty of Architecture building was conducted at Thammasat University in Thailand. The DAS framework was used to reconstruct and examine the development process of the building to determine the gaps between supply and demand in terms of building space, to reflect on the building plan and process and to make suggestions as to how the DAS framework might be improved. Research methods included interviews and document analysis concerning space requirements and provision in the Faculty of Architecture building. Findings The gaps between supply and demand in terms of the faculty building space are affected by the condition of the building (i.e. building obsolescence), the number of building users and the changing environmental context. This study shows that both pre-design and post-occupancy evaluation are essential to collect data concerning the match or mismatch between supply and demand of space and to assess users’ needs and preferences concerning the faculty building. Regarding the building development process, factors impacting the step-by-step planning of the real estate interventions include the organisational context (public/private sector) and the management of the construction project (time, cost, quality). The DAS framework is found to be useful for structuring the information-generating processes necessary to determine gaps between demand and supply in terms of space and for making decisions regarding real estate interventions. Research limitations/implications Additional case studies in different environmental and organisational contexts are required to test the DAS framework and improve data validity. This study was conducted during the COVID-19 pandemic period, which affected data accessibility. Practical implications The results provide insight into the influence of various factors on the decision of corporate real estate. The DAS framework can be used to explore the range of demand for and supply of space and to find an optimal match. Originality/value This paper shows valuable steps in planning and development of educational real estate and a first application of the DAS framework in Thailand. The findings confirm the importance of the physical learning environment of architecture schools, particularly the studio spaces required in architecture education.

Career choice of real estate students in Nigeria

2019 ◽  
Vol 37 (1) ◽  
pp. 154-176 ◽  
Author(s):  
Timothy Oluwafemi Ayodele
Keyword(s):  
Real Estate ◽  
Career Choice ◽  
Third Party ◽  
Southwestern Nigeria ◽  
Test Analysis ◽  
Content Type ◽  
The Real Estate ◽  
Factors Influencing ◽  
Real Estate Sector ◽  
Career Preferences

Purpose The purpose of this paper is to examine the career preferences of real estate students and the predisposing factors influencing the choice of career. The study also analysed the gender and socioeconomic variations with respect to the career preferences and factors influencing the career choice of real estate students in an emergent market like Nigeria. Design/methodology/approach Closed-ended questionnaires were administered on final year real estate students in the three Federal universities offering real estate in Southwestern Nigeria. Data were analysed using frequency counts, percentages, mean ranking, independent t-test, analysis of variance and correlation analysis. Findings The findings showed that the predominant individual factors influencing career choice of real estate students were personal career interest, the magnitude of initial salary, future financial prospects and job security. Furthermore, while intrinsic and economic/financial factors were the major themes influencing respondents’ career choice, the influence of a third party was less a likely determinant. Analysis of gender differences showed that there was a statistical difference between the male and female respondents with respect to the intrinsic and career exposure factors. Research limitations/implications The study has implications for real estate students, career advisers/academic counsellors, organisations employing the services of real estate graduates, and educational institutions and policy stakeholders in the real estate sector. The study also has implication for real estate professional bodies in Nigeria and other emergent markets. Originality/value This is perhaps the first attempt that examined the factors influencing the career choice of real estate students in an emergent market like Nigeria, especially from the perspectives of gender and socioeconomic variations.

scholarly journals NON-PERFORMING PROPERTY LOANS AND ITS ORIGINATION IN THE REAL ESTATE FINANCE SYSTEM: CASE STUDY OF MALAYSIA

2021 ◽  
Vol 11 (1) ◽  
pp. 35-59
Author(s):  
Tham Kuen Wei ◽  
Rosli Said
Keyword(s):  
Real Estate ◽  
Financial Institutions ◽  
Developed Countries ◽  
Mortgage Market ◽  
Real Estate Finance ◽  
Islamic Banks ◽  
The Real ◽  
Finance System ◽  
The Real Estate ◽  
Secondary Mortgage Market

A healthy real estate finance system is crucial for any economy to grow and thrive. However, in recent years, the sustainability and soundness of the Malaysian Real Estate Finance System had been in question as the number of non-performing property loans had been on the rise. This paper looks into how property NPLs originate within the real estate finance system in Malaysia and its current performance in Malaysia. A descriptive research design was conducted utilizing in-depth case studies of Malaysia to examine Malaysia’s real estate finance system consisting of loan originators in the primary market and the special purpose vehicle involved at the secondary mortgage market where it was found that the Malaysian Real Estate Finance System is efficiently developed and on par with other developed countries with a robust primary mortgage market, effective secondary mortgage market and a vibrant capital market. Further analysis found that there are a total of 57 financial institutions that are property loan originators in Malaysia that consists of 26 Commercial Banks, 16 Islamic Banks, 2 International Islamic Banks, 11 Investment Banks, and 2 Special Financial Institutions. In terms of NPLs in Malaysia, property loans are the largest component of total NPLs in the country, and subsequent analysis found that the number of property NPLs in the country had been rising since 2015, after a long decade decline. This study warrants further research into the causes of property NPLs in the country so that the causes of property NPLs can be monitored as part of the country's strategic monetary policy to control and reduce the number of property NPLs in the country. Ultimately, this also helps to contribute towards a sound and robust real estate finance system in Malaysia.

Vertical integration in the real estate sector: three Swedish case studies

2017 ◽  
Vol 10 (2) ◽  
pp. 195-210 ◽  
Author(s):  
Hans Lind
Keyword(s):  
Real Estate ◽  
Vertical Integration ◽  
Bargaining Power ◽  
Detailed Knowledge ◽  
Extensive Literature ◽  
Production Chain ◽  
Content Type ◽  
The Real ◽  
The Real Estate ◽  
Real Estate Sector

Purpose The purpose of this paper is to explain why some real estate companies choose to have a vertically integrated structure, instead of specializing in only stage of the production chain. Design/methodology/approach The first stage of the research was an extensive literature review to generate hypotheses. A case study method was then chosen, as more detailed knowledge about the companies were judged to be needed to evaluate the different hypothesis. Documents about the companies were studied and interviews carried out. Findings In the studies cases, there is no support for theories related to vertical integration as a way to monopolize a market and only marginal support for theories that focus on contracting problems related to the so called hold up problem. The most important factors for the companies were that vertical integration gives information and more options that are important in small number bargaining situations. The companies bargaining power increases when they are better informed about, e.g. costs and profits in nearby activities, and when they can use in-house units, if there are problems to find reasonable conditions on the outside market. Research limitations/implications The main limitation is that only three cases were studied. Practical/implications The study can be helpful both to companies that choose to integrate vertically and those that chose not to. There are similar problems related to information and bargaining power that needs to be handled. Originality/value This is the first study that test theories about vertical integration in the real estate sector.

Brokerage fee, ownership expropriation and earnings management of Malaysian property companies

2018 ◽  
Vol 36 (4) ◽  
pp. 461-482 ◽  
Author(s):  
Lik Jing Ung ◽  
Rayenda Khresna Brahmana ◽  
Chin-Hong Puah
Keyword(s):  
Real Estate ◽  
Earnings Management ◽  
Stock Exchange ◽  
Real Estate Industry ◽  
Kuala Lumpur ◽  
Probit Regression ◽  
Content Type ◽  
The Real Estate ◽  
Report Data ◽  
The Relationship

Purpose The purpose of this paper is to investigate whether real estate companies manipulate their earnings through the brokerage fee across ownership expropriation or not. Design/methodology/approach This study considers Kuala Lumpur Stock Exchange listed real estate firms to investigate how the brokerage fee in the real estate industry might affect the earnings management of firms across its ownership expropriation. Using annual report data, the authors investigate the associations over a panel for the period 2008−2012. Robust panel regression is used to divulge the probability values with reference by probit regression. Findings Overall, the results show that high brokerage fees would drive more events of earnings management and that, generally, the ownership concentration among Malaysian real estate firms significantly affects the earnings management of the firms. Practical implications This study shows that firm profitability and brokerage fees enhance the probability of firm’s earnings management. A low brokerage fee would reflect low revenue to the company. Therefore, management would opt to manipulate earnings in order to overstate earnings, which garners more interest from investors. Originality/value Real estate values in Malaysia have climbed steadily over the years due to a combination of reasons giving companies a higher brokerage fee. Earnings management has become a big issue for property investors. The study demonstrates the relationship between earnings management and brokerage fee across ownership expropriation which can be considered by shareholders in their own strategic planning and investors in their own investing.

Wind power and real estate prices in Oklahoma

2018 ◽  
Vol 11 (5) ◽  
pp. 808-827 ◽  
Author(s):  
Becca Castleberry ◽  
John Scott Greene
Keyword(s):  
Real Estate ◽  
Wind Turbines ◽  
Property Values ◽  
Wind Farms ◽  
Land Values ◽  
Content Type ◽  
The Real Estate ◽  
History Of ◽  
Negative Impacts ◽  
Real Estate Prices

PurposeOklahoma has seen rapid growth in the development of wind energy over the past decade. Residents are concerned about the negative impacts of turbines such as noise or their appearance. This has raised concerns about property values. Thus, this paper aims to examine and quantify the overall impact of wind turbines upon real estate prices in Western Oklahoma.Design/methodology/approachSales prices and the history of approximately 23,000 residential real estate records for both platted and unplatted properties in five counties were examined prior to the announcement of construction, after announcement and after construction. A hedonic analysis was undertaken to examine the real estate prices of the properties near wind farms.FindingsWhile there may be isolated instances of lower property values for homes near wind turbines, results show no significant decreases in property values over homes near wind farms in the study area. Similar results are found for the unplatted properties.Practical implicationsThis paper highlights that in spite of mixed attitudes toward wind farms and misconceptions regarding the link between turbines and property values, Oklahoma’s growing wind industry can continue to thrive without negatively impacting nearby home and land values and prices.Originality/valueAlthough there have been numerous studies examining the relationship between wind turbine locations and real estate prices, no study has combined the large quantity of records (over 23,000) as well as both platted and unplatted locations.

The role of investment property appraisal in European real estate companies

2020 ◽  
Vol 13 (1) ◽  
pp. 105-122
Author(s):  
Juha Mäki
Keyword(s):  
European Union ◽  
Real Estate ◽  
Design Methodology ◽  
Annual Reports ◽  
Real Estate Industry ◽  
Publicly Traded ◽  
Content Type ◽  
The Real Estate ◽  
Practical Implications

Purpose This paper aims to examine the connection between appraisals of investment properties and earnings properties in companies from two perspectives: what kinds of companies employ the most reputable appraisers and how appraisers produce estimations. Design/methodology/approach The research uses annual reports of European Union (EU) publicly traded real estate companies and examines the period 2007-2016. Findings The contribution of this study lies in establishing that some indicators and features of real estate companies affect the choice of appraiser and also in illustrating differences in the results of property valuations. In short, smaller companies with weaker performance are less willing to use external valuation, and external appraisers produce more conservative estimations for investment properties. Practical implications The research produces beneficial information for investors and other stakeholders interested in the real estate industry. Originality/value This is the first novel study to examine the link between appraisals of investment properties and earnings properties in companies in detail.

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