Special Issue "Real Estate Economics, Management and Investments"

A special issue of Buildings (ISSN 2075-5309).

Deadline for manuscript submissions: closed (31 July 2017).

Special Issue Editors

Prof. Dr. Pierfrancesco De Paola
E-Mail Website
Guest Editor
Department of Industrial Engineering, Univeristy of Naples “Federico II”, Piazzale Vincenzo Tecchio 80, 80125 Napoli, Italy
Interests: econometric models; mass appraisal; real estate market; risk management; urban and real estate economics; real estate investments; building management; economic valuation of real estate investment projects; environmental economics; transport economics; sustainability; knowledge management; corporate valuation
Special Issues and Collections in MDPI journals
Prof. Vincenzo Del Giudice
E-Mail Website
Guest Editor
Department of Industrial Engineering, Univeristy of Naples “Federico II”, Piazzale Vincenzo Tecchio 80, 80125 Napoli, Italy
Interests: econometric models; mass appraisal; real estate market; risk management; urban and real estate economics; real estate investments; building management; economic valuation of real estate investment projects; environmental economics; transport economics; sustainability; knowledge management; corporate valuation
Special Issues and Collections in MDPI journals

Special Issue Information

Dear Colleagues,

The current difficult situation of production and consumption activities has also determined a weakness of real estate economy. The main problems are the subordination of public decision-making, which is subjected to pressure from big companies, inefficient appraisal procedures, excessive use to financial leverage in investment projects, the atypical nature of markets, income positions in urban transformations, and the financialization of real estate markets with widespread negative effects.

A delicate role in these complex problems is assigned to real estate appraisal activities, called to make value judgments on real estate goods and investment projects, of which prices are often formed in atypical real estate markets.

Recently, theoretical and empirical research on real estate has seen a great expansion, especially using the paradigms and methodologies of finance and economics.

The Special Issue is dedicated to developing and disseminating knowledge related to most recent real estate evaluation methodologies applied in the fields of architecture and civil, building, and environmental and territorial engineering. Suitable works include studies on building management, risk management and real estate appraisal, mass appraisal methods applied to real estate properties, the application of economics and financial techniques to real estate markets, the economic valuation of real estate investment projects, and the economic effects of building transformations on the environment.

Prof. Dr. Pierfrancesco De Paola
Prof. Dr. Vincenzo Del Giudice
Guest Editors

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All papers will be peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Buildings is an international peer-reviewed open access monthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1000 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • building management
  • mass appraisal methods
  • real estate risk management
  • economic valuation of real estate investment projects
  • real estate market
  • property
  • social housing
  • real estate economics
  • real estate finance
  • building transformations and economic effects on environment

Published Papers (29 papers)

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Editorial

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Open AccessEditorial
Real Estate Economics, Management and Investments: New Perspectives and Frontiers
Buildings 2018, 8(3), 40; https://doi.org/10.3390/buildings8030040 - 12 Mar 2018
Cited by 4
Abstract
New perspectives and frontiers were highlighted in a Special Issue on “Real Estate Economics, Finance and Investments”. The twenty-eight papers that were selected and published emanated from scholars from universities all over the world with the aim to represent more recent advances in [...] Read more.
New perspectives and frontiers were highlighted in a Special Issue on “Real Estate Economics, Finance and Investments”. The twenty-eight papers that were selected and published emanated from scholars from universities all over the world with the aim to represent more recent advances in building management, mass appraisal methods, real estate risk management, economic evaluation of real estate investment projects, real estate market, property, social housing, real estate economics, real estate finance, building transformation and economic effects on environment. These papers helped to determine a unique and valuable opportunity to experiment with multiple approaches to these ever more crucial topics. This note proposes a brief review of the twenty-eight papers, concluding with some reflections about policy, practice and research on real estate issues. Full article
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)

Research

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Open AccessArticle
Public Initiatives of Settlement Transformation: A Theoretical-Methodological Approach to Selecting Tools of Multi-Criteria Decision Analysis
Buildings 2018, 8(1), 1; https://doi.org/10.3390/buildings8010001 - 22 Dec 2017
Cited by 7
Abstract
In Europe, the operating context in which initiatives of settlement transformation are currently initiated is characterized by a complex, elaborate combination of technical, regulatory and governance-related factors. A similar set of considerations makes it necessary to address the complex decision-making problems to be [...] Read more.
In Europe, the operating context in which initiatives of settlement transformation are currently initiated is characterized by a complex, elaborate combination of technical, regulatory and governance-related factors. A similar set of considerations makes it necessary to address the complex decision-making problems to be resolved through multidisciplinary, comparative approaches designed to rationalize the process and treat the elements to be considered in systematic fashion with respect to the range of alternatives available as solutions. Within a context defined in this manner, decision-making processes must often be used to obtain multidisciplinary and multidimensional analyses to support the choices made by the decision-makers. Such analyses are carried out using multi-criteria tools designed to arrive at syntheses of the numerous forms of input data needed to describe decision-making problems of similar complexity, so that one or more outcomes of the synthesis make possible informed, well thought-out, strategic decisions. The technical literature on the topic proposes numerous tools of multi-criteria analysis for application in different decision-making contexts. Still, no specific contributions have been drawn up to date on the approach to take in selecting the tool best suited to providing adequate responses to the queries of evaluation that arise most frequently in the various fields of application, and especially in the settlement sector. The objective of this paper is to propose, by formulating a taxonomy of the endogenous and exogenous variables of tools of multi-criteria analysis, a methodology capable of selecting the tool best suited to the queries of evaluation which arise regarding the chief categories of decision-making problems, and particularly in the settlement sector. Full article
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
Open AccessArticle
Evaluation of House Rent Prices and Their Affordability in Port Moresby, Papua New Guinea
Buildings 2017, 7(4), 114; https://doi.org/10.3390/buildings7040114 - 04 Dec 2017
Cited by 2
Abstract
Access to affordable housing has been a long-standing issue for households in most cities. This paper reports on a study of house rent prices in Port Moresby, factors influencing them, and affordability of the prices. Data was obtained from houses that were advertised [...] Read more.
Access to affordable housing has been a long-standing issue for households in most cities. This paper reports on a study of house rent prices in Port Moresby, factors influencing them, and affordability of the prices. Data was obtained from houses that were advertised for rent in Port Moresby for a period of 13 months and were analysed using the ordinary least squares (OLS) regression model. The results show that monthly house rent prices range from 2357 to 34,286 Papua New Guinea Kina (PGK), or 714 to 10,389 U.S. dollars (USD), and the median price was 7286 PGK (2208 USD). Houses located in the central business district had the highest median house rent price, whereas low-income areas had the lowest rent price. By dividing the median house rent price by gross household income, the housing affordability index was 3.4. House rent price was influenced by factors such as number of bedrooms and location. To make house rent prices more affordable for Port Moresby residents, it is necessary to supply more houses for rent relative to demand, especially in low-income areas. Relevant governmental agencies should put more effort toward unlocking more customarily-owned land for housing development and toward facilitating the private sector to construct more low-cost houses for rent, which are affordable for low to middle income households. This has the potential of improving Port Moresby residents’ access to affordable houses for rent. The findings could assist urban development managers and planners in allocating resources for housing by considering housing demand, supply, and house rent prices. Full article
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
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Open AccessArticle
Assessing the Impact of Urban Improvement on Housing Values: A Hedonic Pricing and Multi-Attribute Analysis Model for the Historic Centre of Venice
Buildings 2017, 7(4), 112; https://doi.org/10.3390/buildings7040112 - 30 Nov 2017
Cited by 3
Abstract
The Hedonic Pricing Method is one of the principal assessment methods for evaluating services and resources not normally exchanged on the market. However, the method is often unable to account for the great variety of qualities in an urban context and faces scarce [...] Read more.
The Hedonic Pricing Method is one of the principal assessment methods for evaluating services and resources not normally exchanged on the market. However, the method is often unable to account for the great variety of qualities in an urban context and faces scarce and heterogeneous market data. This paper presents a model for the valuation of benefits generated by environmental and urban improvement investments adopting a mixed hedonic-multi-attribute procedure for modeling a value function of urban real estate values. The peculiarity of the model is that the independent variables are aggregated indicators, which synthetize more detailed characteristics. Using the expertise of real estate agents, all relevant variables influencing real estate values were weighted and synthetized in a set of cardinal indicators. Next, market prices were used to calibrate a hedonic function that transforms the cardinal indicators into real estate values. The valuation model was integrated into a GIS for mapping the housing value, and its variation induced by urban investment. The proposed model pointed out plausible and robust results, in particular, the possibility to use any available information, such as location, position, technical and economic characteristics of buildings, and organize it in a flexible and transparent way, and to keep evident the role of each characteristic through the hierarchical structure of the model. The model was applied to the real estate market of Venice to test the effects of the MOSE project (Electromechanical Experimental Module) for the protection of Venice from high tides. The results of the application showed a relevant increase in real estate values in the center of Venice, especially related to property in ground floor units, of about 1.4 billion €. Full article
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
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Open AccessFeature PaperArticle
Where in Connecticut Is the Best Location for a Split Tax? An Analysis of Land Assessment Equity in Several Cities
Buildings 2017, 7(4), 108; https://doi.org/10.3390/buildings7040108 - 28 Nov 2017
Cited by 1
Abstract
The ability of local assessors to accurately estimate land values separately from structure values is important when considering a split tax. When the value of land is estimated with less variation, there is greater equity. We examine land ratios in New London, New [...] Read more.
The ability of local assessors to accurately estimate land values separately from structure values is important when considering a split tax. When the value of land is estimated with less variation, there is greater equity. We examine land ratios in New London, New Haven, and Hartford Connecticut and sub-groupings within these cities for 2006 to 2010. Overall, the land ratios coefficients of dispersion (COD), a measure of horizontal equity, are too large for an equitable split tax. We also look at land assessment equity among sub-groupings of properties near parks, highway exits, airports, Yale University (for New Haven), residential versus commercial properties, land with old versus new properties, and large versus small parcels and ‘expensive’ versus ‘less expensive’ properties (by examining price per square foot). Commercial properties near Hartford’s Brainard Airport are the best candidates for an equitable split tax. We also find that more frequent revaluations are necessary for an equitable split tax. Full article
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
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Open AccessArticle
An Integrated Participative Spatial Decision Support System for Smart Energy Urban Scenarios: A Financial and Economic Approach
Buildings 2017, 7(4), 103; https://doi.org/10.3390/buildings7040103 - 07 Nov 2017
Cited by 8
Abstract
The decision-making process regarding heating supply system options in a district perspective is extremely challenging. This paper aims to present a new method to support urban energy decisions in real-time processes, which was developed in the context of a European project (DIMMER (District [...] Read more.
The decision-making process regarding heating supply system options in a district perspective is extremely challenging. This paper aims to present a new method to support urban energy decisions in real-time processes, which was developed in the context of a European project (DIMMER (District Information Modeling and Management for Energy Reduction, 2013–2016)). The method is composed of three parts: (i) a new web-based spatial decision support system (SDSS), called “Dashboard”; (ii) an ad hoc energy-attribute analysis (EAA) tool to be integrated into Dashboard; and (iii) a multi-criteria decision analysis (MCDA). In contrast to other SDSSs, one of the main strengths of Dashboard is the ability to acquire, store, and manage both geo-referenced and non-geo-referenced data, and perform real-time analyses of spatial problems taking into account a wide range of information. In this sense, Dashboard can formally visualize and assess a potentially infinite number of attributes and information, as it is able to read and process very large web databases. This characteristic makes Dashboard a very effective tool that can be used in real-time during focus groups or workshops to understand how the criterion trade-offs evolve when one, or several, decision parameters change. The paper describes the main procedure of the new method and testing of Dashboard test on a district in Turin (Italy). Full article
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
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Open AccessArticle
Simulation Models to Evaluate the Value Creation of the Grass-Roots Participation in the Enhancement of Public Real-Estate Assets with Evidence from Italy
Buildings 2017, 7(4), 100; https://doi.org/10.3390/buildings7040100 - 30 Oct 2017
Cited by 10
Abstract
In recent years, new forms of enhancement of public real-estate assets have been developed in Italy. These are based on initiatives promoted by a citizenry eager to pursue their cultural, creative, and entrepreneurial activities in unused assets. The aim of this paper is [...] Read more.
In recent years, new forms of enhancement of public real-estate assets have been developed in Italy. These are based on initiatives promoted by a citizenry eager to pursue their cultural, creative, and entrepreneurial activities in unused assets. The aim of this paper is to estimate the value generated by these bottom-up enhancement processes and to evaluate their economic feasibility from the perspective of the administration owner of the asset, beside any other considerations concerning local development or social capital improvement. The uncertainty affecting grass-roots participation and the value creation process is relevant. Therefore, the adopted approach combines Discounted Cash Flow Analysis (DCFA) with dynamic simulation models and the Monte Carlo methodology. The results highlight a significant value creation process: value appraisals appear to be below valuations made before the market downturn of 2008, but higher with respect to the current market values. Full article
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
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Open AccessArticle
Spatial Multi-Criteria Decision Support System and Strategic Environmental Assessment: A Case Study
Buildings 2017, 7(4), 96; https://doi.org/10.3390/buildings7040096 - 26 Oct 2017
Cited by 14
Abstract
This contribution focuses on the Strategic Environmental Assessment (SEA) as an important tool to ensure sustainable development and reach a high level of environmental protection. More specifically, this paper provides an evaluation method based on the integration of Geographic Information System (GIS) and [...] Read more.
This contribution focuses on the Strategic Environmental Assessment (SEA) as an important tool to ensure sustainable development and reach a high level of environmental protection. More specifically, this paper provides an evaluation method based on the integration of Geographic Information System (GIS) and Multi-criteria Analysis—named Integrated Spatial Multi-criteria Decision Support System (ISMDSS)—to support the preparation of environmental assessment reports and the construction of scenarios for the adoption of urban plans, as an innovative tool that integrates objectives and multidimensional (economic, environmental, and social) components, as well as different approaches and models for the construction of a long-term shared vision. In particular, considerations are made by presenting a thought-provoking case study on the SEA of the urban plan of the municipality of Marzano di Nola, located in the province of Avellino in the Campania region. The experiment carried out showed the potentiality of the ISMDSS to evaluate the impacts of different scenarios with the aim of developing a sustainable urban municipal plan. The spatial dimension is useful in understanding the dynamics that characterize each environmental topic in a specific area, by considering not only the components of the natural and developed environment, but also the interactions with social and economic components. Full article
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
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Open AccessArticle
Housing Affordability in Metropolitan Areas. The Application of a Combination of the Ratio Income and Residual Income Approaches to Two Case Studies in Sicily, Italy
Buildings 2017, 7(4), 95; https://doi.org/10.3390/buildings7040095 - 26 Oct 2017
Cited by 8
Abstract
Housing affordability problems have become more serious over the course of the last few decades and are now also affecting the middle-class, despite the fall in prices on the housing market. This study proposes a methodology to assess threshold-income as an index for [...] Read more.
Housing affordability problems have become more serious over the course of the last few decades and are now also affecting the middle-class, despite the fall in prices on the housing market. This study proposes a methodology to assess threshold-income as an index for measuring housing affordability by applying a combination of the ratio income and residual income approaches. The methodology is applied to two particular areas of Sicily in Italy as case studies consisting of medium-size metropolitan areas located in a less developed European region. The areas have been chosen on the basis of their different territorial structure: a polarized area that comprises a high-density city centre and a polynuclear urban region. The results are diversified for income level, as well as for town and urban zone, and allow us to compare the housing affordability problems between towns belonging to the same metropolitan area. Full article
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
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Open AccessArticle
Assessing Social and Territorial Vulnerability on Real Estate Submarkets
Buildings 2017, 7(4), 94; https://doi.org/10.3390/buildings7040094 - 24 Oct 2017
Cited by 7
Abstract
The concept of social vulnerability is widely studied in literature in order to identify particularly socially fragile sectors of the population. For this purpose, several studies have adopted indexes to measure the economic and social conditions of the population. The aim of this [...] Read more.
The concept of social vulnerability is widely studied in literature in order to identify particularly socially fragile sectors of the population. For this purpose, several studies have adopted indexes to measure the economic and social conditions of the population. The aim of this paper is to investigate the link between social and territorial vulnerability and the real estate market, by means of an exploratory analysis related to the possibility that spatial analyses can help to identify spatial latent components and variables in the process of price determination. A three phase approach is proposed, using the geographical segmentation of Turin and its related submarkets as a case study. After the identification and analysis of a set of three social and territorial vulnerability indicators, a traditional hedonic approach was applied to measure their influence on property listing prices. Subsequently, spatial analyses were investigated to focus on the spatial components of the indicators and property prices; their spatial autocorrelation was measured and the presence of spatial dependence was taken into account by applying a spatial regression. Results demonstrated that two indicators were spatially correlated with property prices and had a significant and negative influence on them. The proposed approach may help not only to identify the most vulnerable urban areas characterized by the lowest property prices, but also to support the future modification to the actual geographical segmentation of Turin. Full article
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
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Open AccessArticle
Immigrants and the City: The Relevance of Immigration on Housing Price Gradient
Buildings 2017, 7(4), 91; https://doi.org/10.3390/buildings7040091 - 14 Oct 2017
Cited by 12
Abstract
Foreign citizens are a more and more significant part of the population of Italian cities and society (8% of the country’s total population), and they contribute to changes in the cultural, social, and economic structure of the country. Our aim was to assess [...] Read more.
Foreign citizens are a more and more significant part of the population of Italian cities and society (8% of the country’s total population), and they contribute to changes in the cultural, social, and economic structure of the country. Our aim was to assess the incidence of the immigrant population on urban house price polarization, as measured using an original indicator: the center-periphery housing price gradient. While there is ample literature on the relationship between average prices and immigrant populations, less research has been conducted on immigration and the housing price gradient on a national scale. This price gradient may indicate whether immigration contributes to changing the residential market, also possibly revealing segregation phenomena. We ran multivariate regressions in several steps on an original dataset of housing prices and socio-economic factors concerning 112 Italian provincial capitals to elucidate whether immigration is correlated with the housing market divide. Our main findings confirmed that larger immigrant populations coincide with steeper housing price gradients on a national scale. Our tests also demonstrated that the relevance of this phenomenon varies for different urban forms, confirming related to housing price dynamics between the cities of northern and southern Italy the relevance of urban density in elucidating. Full article
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
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Open AccessArticle
An Integrated Assessment Approach as a Decision Support System for Urban Planning and Urban Regeneration Policies
Buildings 2017, 7(4), 85; https://doi.org/10.3390/buildings7040085 - 25 Sep 2017
Cited by 21
Abstract
This paper focuses on an integrated multi-methodological evaluation process; it aimed at supporting public administrators in developing alternative strategies for intervention in urban planning and urban regeneration processes that focus on abandoned urban areas located in a central position. In order to transform [...] Read more.
This paper focuses on an integrated multi-methodological evaluation process; it aimed at supporting public administrators in developing alternative strategies for intervention in urban planning and urban regeneration processes that focus on abandoned urban areas located in a central position. In order to transform crisis areas into areas with new opportunities, starting with their redevelopment and enhancement, the article proposes a selection of evaluation tools that can support and steer the decision maker’s choice of alternative scenarios for intervention. For this purpose, the contribution develops an integrated system of evaluation methodologies for decision-making support, which includes different components and a plurality of points of view, even of conflicting types, providing a more transparent description of the decision-making process. The methodological approach was applied to a pilot case study that concerned the choice of priority intervention between two abandoned and blighted areas located in the central area of the city of Reggio Calabria. Full article
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
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Open AccessArticle
Research on Investment Risk Management of Chinese Prefabricated Construction Projects Based on a System Dynamics Model
Buildings 2017, 7(3), 83; https://doi.org/10.3390/buildings7030083 - 20 Sep 2017
Cited by 7
Abstract
Prefabricated construction, a new direction for the future development of the Chinese construction industry, can maximize the requirements of “green”. As a new form of green building, prefabricated construction is of particular interest. On account of the immature development of the green building [...] Read more.
Prefabricated construction, a new direction for the future development of the Chinese construction industry, can maximize the requirements of “green”. As a new form of green building, prefabricated construction is of particular interest. On account of the immature development of the green building market in China, the investment risk for prefabricated construction is higher than for traditional architecture. Hence, it is especially important to improve its investment risk identification and management. This study adopts system dynamics and builds a risk identification feedback chart and risk flow chart, to comprehensively identify investment risks that projects in China may face and to process quantitative estimation of investment risk factors. Key factors influencing project investment risks are found, and corresponding measures are pointedly proposed. This paper may provide guidance and a reference for promoting the sound development of prefabricated construction in China. Full article
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
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Open AccessArticle
Characteristics of Equipment Planning for Multi-Crane Building Construction Sites
Buildings 2017, 7(3), 81; https://doi.org/10.3390/buildings7030081 - 06 Sep 2017
Cited by 2
Abstract
This paper purports to provide answers to the following questions with regard to multi-crane building construction sites: (1) Do such construction sites differ from smaller sites only in magnitude, or are there unique characteristics that stem from the size of the site and [...] Read more.
This paper purports to provide answers to the following questions with regard to multi-crane building construction sites: (1) Do such construction sites differ from smaller sites only in magnitude, or are there unique characteristics that stem from the size of the site and the multitude of cranes? (2) Is equipment planning for such projects similar to that of projects serviced by a small number of cranes? (3) How is equipment planning affected by the site’s surroundings? (4) Does the visibility of multiple cranes in the near and far surroundings of the project affect the approach to equipment planning? Answers to these questions were sought after through the investigation of several measures, based on case studies of mega building projects in Europe, all located in busy urban surroundings. On-site interviews focused on multiple research variables, of which four are used here: project planning stages, planning parties, plan formats, and the cranes on site. The study found that multi-crane sites are characterized by unique features; equipment planning for such sites differs significantly from that conducted for regular sites; the site-surroundings interface plays an important role in equipment and logistics planning for such sites; and the awareness of reputation plays a role in crane selection. The study’s main contribution is in reducing the knowledge gap that exists with regard to the unique determinants of equipment planning for multi-crane projects and to its importance to the success of such projects. Full article
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
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Open AccessArticle
Cap Rate as the Interpretative Variable of the Urban Real Estate Capital Asset: A Comparison of Different Sub-Market Definitions in Palermo, Italy
Buildings 2017, 7(3), 80; https://doi.org/10.3390/buildings7030080 - 05 Sep 2017
Cited by 15
Abstract
Real estate capital is in constant competition with other capital assets due to its different and complementary economic functions such as direct use, productive investment, and speculative investment. These features and the resulting opportunities cannot be easily deduced from direct observation of the [...] Read more.
Real estate capital is in constant competition with other capital assets due to its different and complementary economic functions such as direct use, productive investment, and speculative investment. These features and the resulting opportunities cannot be easily deduced from direct observation of the real estate markets, so some further insights need to be carried out in order to highlight the relationship between prices, rents and performances. This study aims at providing a multifaceted perspective of a specific urban real estate market to overcome the difficulties arising from opacities and informative asymmetries that hinder the decision of investors, by facilitating the comparison of different options such as capital value, income and performance. Within the mass appraisal approach, the study proposes a methodology for the analysis of the cap rate, intended as the expression of profitability and liquidity of the urban real estate capital asset. The methodology is based on a detailed survey of a sample of the housing market data, collected within a structured database, supported by statistical and territorial analyses of the sample, in order to display the range of cap rates featuring each sub-market, and the related distributions. The methodology is applied to a case study of nearly 1000 properties distributed in a vast urban area of the municipality of Palermo, Italy. The consistency of the relationships between the three variables has been tested with reference to two hypotheses about the sub-market definition, which has been carried out by cluster and by neighbourhood. Full article
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
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Open AccessFeature PaperArticle
Rethinking Design and Urban Planning for the Cities of the Future
Buildings 2017, 7(3), 76; https://doi.org/10.3390/buildings7030076 - 24 Aug 2017
Cited by 27
Abstract
Growth of urban areas and abandonment of rural areas are phenomena that increase quickly. The main consequences of urbanization are pollution, consumption of resources and energy, waste dumps, and junk yards. These aspects require a better planning and design of European urban metropolitan [...] Read more.
Growth of urban areas and abandonment of rural areas are phenomena that increase quickly. The main consequences of urbanization are pollution, consumption of resources and energy, waste dumps, and junk yards. These aspects require a better planning and design of European urban metropolitan areas, considering benefits, opportunities, costs and risks (B.O.C.R.), derivable by urban transformations and available resources. The paper consists of five parts. The first part contains some reflections on consequences of urban sprawl. In the second part, some possible kinds of cities are discussed (sustainable city, smart city, and compact city). The third part briefly describes a multicriteria decision-making approach known as the ‘analytic hierarchy process’ to deal with complex decisions. In the fourth part, alternative city models are analyzed (compact city, elevated city, green house city, and water city). Finally, in the fifth part, the criteria selected for the planning and design of the alternative city models are used for the prioritization of some European cities. Full article
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
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Open AccessFeature PaperArticle
An Analysis of the Influence of Property Tax on Housing Prices in the Apulia Region (Italy)
Buildings 2017, 7(3), 67; https://doi.org/10.3390/buildings7030067 - 27 Jul 2017
Cited by 7
Abstract
In this research, the socio-economic determinants of housing market values have been examined, highlighting their respective contributions to the formation of the property prices and, in particular, verifying the property tax liability. The property tax is a factor that could determine, through modest [...] Read more.
In this research, the socio-economic determinants of housing market values have been examined, highlighting their respective contributions to the formation of the property prices and, in particular, verifying the property tax liability. The property tax is a factor that could determine, through modest fluctuations, the revival of the property demand, generating positive effects also on the construction sector, which has been currently affected by the negative real estate contingency. The functional correlations of housing prices with the main socio-economic variables considered (i.e., housing rents, household incomes, household consumptions, property taxes, population and mean population age) have been explained through an econometric analysis implemented with an innovative methodology that uses multi-objective genetic algorithms. The analysis is contextualized to the Apulia region in the South of Italy, and the population of the sample studied consists of 258 individuals, corresponding to the municipalities of the region. In particular, the data collected for each variable considered refer to two different moments, that is, the year 2011 and the year 2015, in order to take into account the fiscal tightening that has occurred in Italy in this period of time. The elaborations carried out have allowed us to enucleate interesting functional relationships between property prices and the explanatory variables considered. Full article
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
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Open AccessArticle
Economic-Environmental Indicators to Support Investment Decisions: A Focus on the Buildings’ End-of-Life Stage
Buildings 2017, 7(3), 65; https://doi.org/10.3390/buildings7030065 - 21 Jul 2017
Cited by 17
Abstract
The aim of this paper is to propose a methodology for supporting decision making in design activities; in case of new projects or retrofitting of existing buildings. A multidisciplinary approach is adopted; involving Real Estate Appraisal and Economic Evaluation of Project and Building [...] Read more.
The aim of this paper is to propose a methodology for supporting decision making in design activities; in case of new projects or retrofitting of existing buildings. A multidisciplinary approach is adopted; involving Real Estate Appraisal and Economic Evaluation of Project and Building Environmental Design. It is proposed a methodology for selecting the preferable solutions among technological options; considering both economic and environmental aspects; in terms of global performance. Assuming the principles of Life Cycle Thinking and Circular Economy focus is posed at the end-of-life stage. Attention is paid on disposal costs and residual value as relevant items enable to orient investment decisions. This is done through an approach for quantifying environmental indicators related to Life Cycle Assessment (Standard ISO 14040:2006); and economic indicators adopting the Life Cycle Costing (Standard ISO 15686:2008). The paper proposes a conjoint “economic-environmental indicator”. An application of Global Cost calculation is illustrated; including monetized environmental impacts (Embodied energy and Embodied carbon); disposal/dismantling costs and residual value. The result of the Global Cost calculation is expressed through a “synthetic economic-environmental indicator” in order to select; between two different technologies; the most viable solution for a multifunctional building glass façade project; in Northern Italy. The study demonstrates that the initial investment decisions depend on the design solutions; since the early stages; related to the whole building life cycle considering conjointly the construction-management phases and the end-of-life stage. Full article
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
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Open AccessArticle
Integrating Scenarios into Life Cycle Assessment: Understanding the Value and Financial Feasibility of a Demountable Building
Buildings 2017, 7(3), 64; https://doi.org/10.3390/buildings7030064 - 14 Jul 2017
Cited by 5
Abstract
Although life cycle assessment offers insight into the long-term value of our building stock, it has become impossible to model with certainty the service life of a building. What if new lifestyles make reality diverge from the expected service life? What if the [...] Read more.
Although life cycle assessment offers insight into the long-term value of our building stock, it has become impossible to model with certainty the service life of a building. What if new lifestyles make reality diverge from the expected service life? What if the building is decommissioned very early or forced to accommodate new functions? Would the same design decisions have been made or would an alternative have been preferred? In reaction to this challenge, the present paper proposes to integrate scenario planning and life cycle assessment. Therefore, it discusses from where scenario planning originates and how it appeared hitherto in architectural design and life cycle assessment. Thereafter, it explores how assessors can profit from scenarios when raising awareness and co-creating alternatives. Subsequently, a methodological framework for effective scenario development is proposed. To illustrate the added value of scenario integrated life cycle assessments, four divergent scenarios are developed for evaluating the financial feasibility of demountable building element reuse. With this simple case study is shown how more relevant and nuanced assessment outcomes are obtained when divergent scenarios are adopted. Full article
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
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Open AccessArticle
Economic Valuation of Ground Mounted Photovoltaic Systems
Buildings 2017, 7(2), 54; https://doi.org/10.3390/buildings7020054 - 16 Jun 2017
Cited by 5
Abstract
The appraisal of ground mounted photovoltaic systems is an important question, due to increasing investments in renewable energies. The costs related to installation and maintenance, and the economic benefits related to the energy saving, suggests the use of an income approach, in order [...] Read more.
The appraisal of ground mounted photovoltaic systems is an important question, due to increasing investments in renewable energies. The costs related to installation and maintenance, and the economic benefits related to the energy saving, suggests the use of an income approach, in order to consider the financial aspects of the photovoltaic systems. This paper proposes the use of the Discounted Cash Flow Analysis (DCFA). The DCFA allows to simulate the entire life cycle of the photovoltaic system, from the acquisition date to the end of its life cycle, to evaluate the most probable market value by discounting the annual cash flows generated by the system. In particular, the paper proposes a procedure to determine the discount rate in an innovative manner through the combination of a conventional financial method (the Build up Approach) and the analytical method which makes recourse to the use of the ascending and descending influences that act, each with positive or negative sign, on the specific risk factors related to the photovoltaic investment. To obtain an objective appraisal of the discount rate, the theory of the ascending and descending influences has been applied in this specific case for the calculation of the risk premium. The percentage incidences of the ascending and descending influences, which influence the formation of the risks to which they refer, are determined through this study for all the intrinsic factors, which are part of the photovoltaic investment risks. Full article
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
Open AccessArticle
Does the Energy Label (EL) Matter in the Residential Market? A Stated Preference Analysis in Barcelona
Buildings 2017, 7(2), 53; https://doi.org/10.3390/buildings7020053 - 16 Jun 2017
Cited by 9
Abstract
Energy performance in buildings has become a milestone in EU environmental policy in the last 15 years. Nonetheless, in some countries such as Spain the full acceptance of the Energy Performance of Buildings Directive is still relatively rare and novel, with little evidence [...] Read more.
Energy performance in buildings has become a milestone in EU environmental policy in the last 15 years. Nonetheless, in some countries such as Spain the full acceptance of the Energy Performance of Buildings Directive is still relatively rare and novel, with little evidence as to how relevant it is in the real estate market. There are different reasons for this phenomenon: on the one hand, the real estate crisis has paralyzed the completion of most of the works in new/refurbished efficient buildings (which renders it impossible to use revealed preference methods); on the other hand, information is not complete and the consumer’s perception of the relevant cost/benefits could be incorrect. For this reason, assessing the trade-off between the energy label and other specific attributes of the housing market has become important. To that end, a choice experiment following an RPL (Random Parameter Logit) model was employed. This form is suitable to accommodate various empirical situations where the assumptions of the Conditional Logit model have to be relaxed. Results suggest that the Energy Label (EL) does matter in the real estate market in relation to other residential attributes. Marginal willingness to pay for an “A” label instead of an “E” is significantly higher than the stated savings in energy costs. The respondents’ utility function seems to be also influenced by their educational level, as well as by their preference to own a house as opposed to renting it. Full article
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
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Open AccessArticle
Measuring and Interpreting Urban Externalities in Real-Estate Data: A Spatio-Temporal Difference-in-Differences (STDID) Estimator
Buildings 2017, 7(2), 51; https://doi.org/10.3390/buildings7020051 - 16 Jun 2017
Cited by 5
Abstract
It is now almost impossible to deal with spatial data without considering some explicit specification that captures possible spatial effects. One valuable feature of spatial econometrics models is their decomposition of marginal effects into spatial spillover effect and spatial externalities. Progress in interpreting [...] Read more.
It is now almost impossible to deal with spatial data without considering some explicit specification that captures possible spatial effects. One valuable feature of spatial econometrics models is their decomposition of marginal effects into spatial spillover effect and spatial externalities. Progress in interpreting spatial econometrics models has now been extended to the spatial-panel case. However, little consideration has been given to the possible interpretation of models using spatial data pooled over time. This paper proposes a spatio-temporal difference-in-differences (STDID) estimator to measure the effect of urban externalities, such as transport infrastructures, as revealed through real-estate prices. Based on an empirical application for a new development of commuter trains in the Montreal suburbs, this paper shows how such propositions can help us to better understand and evaluate changes in mass transit systems. Full article
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
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Open AccessArticle
A Model to Assess the Feasibility of Public–Private Partnership for Social Housing
Buildings 2017, 7(2), 44; https://doi.org/10.3390/buildings7020044 - 01 Jun 2017
Cited by 5
Abstract
The effects of the world economic and financial crisis, which began in 2007 and is still in progress, has made increasingly sharp the line of demarcation between those able to access home ownership on the free market, and those unable to do so. [...] Read more.
The effects of the world economic and financial crisis, which began in 2007 and is still in progress, has made increasingly sharp the line of demarcation between those able to access home ownership on the free market, and those unable to do so. For the European Union’s member states, Social Housing (SH) policies include all the initiatives aimed at providing housing support for all the weak segments of the population; these policies have declined differently by different Member States according to their specific needs. In Italy, the growing need for SH accommodation together with the shortage of public resources makes developing forms of Public–Private Partnership (PPP) necessary. Evaluation techniques like Break-Even Analysis and Contribution Margin Analysis are useful in planning interventions including SH initiatives in the context of real estate development or retraining initiatives in PPP (in negotiation processes or in project financing). These kinds of techniques especially allow evaluation of public and private convenience in PPP. In the present work, an assessment procedure has been structured: first the main parameters of a settlement of SH initiative in PPP are defined; subsequently, it is possible to assess the feasibility and the financial balance of the initiative itself. The procedure has been applied to a case study: the interrupted initiative of self-renovation in Via Grotta Perfetta 315 in Rome (Italy). Full article
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
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Open AccessArticle
Multi-Criteria Analysis in Compound Decision Processes: The AHP and the Architectural Competition for the Chamber of Deputies in Rome (Italy)
Buildings 2017, 7(2), 38; https://doi.org/10.3390/buildings7020038 - 08 May 2017
Cited by 8
Abstract
In 1967, a national architectural competition was released for a preliminary project proposal, aimed at the realization of the new building for the Chamber of Deputies in Rome. The outcomes of that competition were unusual: eighteen projects were declared joint winners, and no [...] Read more.
In 1967, a national architectural competition was released for a preliminary project proposal, aimed at the realization of the new building for the Chamber of Deputies in Rome. The outcomes of that competition were unusual: eighteen projects were declared joint winners, and no winner was consequently selected. With reference to that event, this research aims to examine the usefulness of the evaluation tools that are currently employed and the positive effects that one of these techniques would have had, as support for the identification of the “winner” project, are highlighted. Therefore, an hypothetical examination/adjustment of the decision process of that competition through the Analytic Hierarchy Process (AHP) is developed, analyzing the outputs obtained by the implementations of this technique on the final decision. In addition to confirming the usefulness of the evaluation tools for compound and conflicting decision processes, the results of this experiment led to a further understanding of the socio-cultural dynamics related to the original outcomes of the competition analyzed. Full article
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
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Open AccessArticle
A Mass Appraisal Model Based on Market Segment Parameters
Buildings 2017, 7(2), 34; https://doi.org/10.3390/buildings7020034 - 20 Apr 2017
Cited by 13
Abstract
The proposed evaluation scheme is a uni-equation model to evaluate properties of Mass Appraisal (MA) in terms of widespread availability of sample data. It all allows the use of statistical models and in the opposite conditions of the absence of data of comparable [...] Read more.
The proposed evaluation scheme is a uni-equation model to evaluate properties of Mass Appraisal (MA) in terms of widespread availability of sample data. It all allows the use of statistical models and in the opposite conditions of the absence of data of comparable properties, the functions of similar market areas are known as well as the ones near to those for which you want to estimate the function. Of course, the accuracy of the evaluation increases with the amount of available data, with other equal conditions and evaluations carried out without data (but in the presence of other market information). It requires extra-statistical appraisal procedures involving a complete knowledge of the real estate market. However, such knowledge is also required in the MA performed by quantitative models with regard to the data sampling and performance monitoring process. The model considers micro-level characteristics of the properties and macro-level parameters of the real estate market segments. The appraisal model defines the prediction function with both the statistical models and estimation procedures. For this purpose, the model considers four specific situations: the construction of a statistical model operating with a sufficiently large sample of market prices; the construction of a prediction function operating with a very few number of market prices samples; in this situation, the appraisal function of market value is defined by using a sample of market prices referred to comparable properties, and these are few for statistical use but perfectly suitable to the appraisal process; the construction of a prediction function operating with only one market price; the construction of a prediction function operating in the absence of real estate data but with similar functions of market areas with other estimated proprieties. The presented model provides a uniform method of estimating the market value of properties (and fees), through the modular functions. The model studied is able to operate also with reduced information, considering the practical circumstances, the boundary conditions, the application precautions and the significance of the results. Full article
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
Open AccessFeature PaperArticle
Using Genetic Algorithms for Real Estate Appraisals
Buildings 2017, 7(2), 31; https://doi.org/10.3390/buildings7020031 - 30 Mar 2017
Cited by 24
Abstract
The main aim of this paper is the interpretation of the existing relationship between real estate rental prices and geographical location of housing units in a central urban area of Naples (Santa Lucia and Riviera of Chiaia neighborhoods). Genetic algorithms (GA) are used [...] Read more.
The main aim of this paper is the interpretation of the existing relationship between real estate rental prices and geographical location of housing units in a central urban area of Naples (Santa Lucia and Riviera of Chiaia neighborhoods). Genetic algorithms (GA) are used for this purpose. Also, to verify the reliability of genetic algorithms for real estate appraisals and, at the same time, to show the forecasting potentialities of these techniques in the analysis of housing markets, a multiple regression analysis (MRA) was applied comparing results of GA and MRA. Full article
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
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Open AccessArticle
Valuation of Real Estate Investments through Fuzzy Logic
Buildings 2017, 7(1), 26; https://doi.org/10.3390/buildings7010026 - 15 Mar 2017
Cited by 16
Abstract
This paper aims to outline the application of Fuzzy Logic in real estate investment. In literature, there is a wide theoretical background on real estate investment decisions, but there has been a lack of empirical support in this regard. For this reason, the [...] Read more.
This paper aims to outline the application of Fuzzy Logic in real estate investment. In literature, there is a wide theoretical background on real estate investment decisions, but there has been a lack of empirical support in this regard. For this reason, the paper would fill the gap between theory and practice. The fuzzy logic system is adopted to evaluate the situations of a real estate market with imprecise and vague information. To highlight the applicability of the Possibility Theory, we proceeded to reconsider an example of property investment evaluation through fuzzy logic. The case study concerns the purchase of an office building. The results obtained with Fuzzy Logic have been also compared with those arising from a deterministic approach through the use of crisp numbers. Full article
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
Open AccessArticle
Buildings Energy Performance in a Market Comparison Approach
Buildings 2017, 7(1), 16; https://doi.org/10.3390/buildings7010016 - 22 Feb 2017
Cited by 20
Abstract
The current regulations on the energy certification of buildings represent for the real estate market and the building sector a real cultural revolution. In recent years, the focus on the energy efficiency of buildings has grown exponentially. It is therefore necessary that the [...] Read more.
The current regulations on the energy certification of buildings represent for the real estate market and the building sector a real cultural revolution. In recent years, the focus on the energy efficiency of buildings has grown exponentially. It is therefore necessary that the property valuations and methodologies used for this purpose bear in mind the energy quality of buildings. This study aims to determine the contribution of an energy performance feature to the real estate property value. This information can help, on the one hand, to understand the energy savings and the corresponding savings income in the property management and, on the other, to control the air pollution from CO2 emission reduction. The energy performance hedonic price and the CO2 emission price are appraised in the Market Comparison Approach (MCA). Full article
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
Open AccessArticle
Rough Set Theory for Real Estate Appraisals: An Application to Directional District of Naples
Buildings 2017, 7(1), 12; https://doi.org/10.3390/buildings7010012 - 08 Feb 2017
Cited by 17
Abstract
This paper proposes an application of Rough Set Theory (RST) to the real estate field, in order to highlight its operational potentialities for mass appraisal purposes. RST allows one to solve the appraisal of real estate units regardless of the deterministic relationship between [...] Read more.
This paper proposes an application of Rough Set Theory (RST) to the real estate field, in order to highlight its operational potentialities for mass appraisal purposes. RST allows one to solve the appraisal of real estate units regardless of the deterministic relationship between characteristics that contribute to the formation of the property market price and the same real estate prices. RST was applied to a real estate sample (office units located in Directional District of Naples) and was also integrated with a functional extension so-called “Valued Tolerance Relation” (VTR) in order to improve its flexibility. A multiple regression analysis (MRA) was developed on the same real estate sample with the aim to compare RST and MRA results. The case study is followed by a brief discussion on basic theoretical connotations of this methodology. Full article
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
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