QUANTIFYING THE BENEFITS OF PHASING AS A CORPORATE REAL ESTATE STRATEGY

 

Mikael Collan

 

Abstract

 

The purpose of this paper is to show how it is possible to quantify the benefits of phasing in corporate real estate projects in a way that makes understanding project risks intuitive and enhances the support for project decision-making. When the potential and the risk in different real estate strategies is clearly visible and quantifiable, the potentially significant risk management aspect of phasing becomes easier to appreciate and to quantify. Quantification of benefits from phasing corporate real estate projects can be very difficult without the proper tools, this case study shows for the first time how a quantitative analysis on a corporate real estate project can be performed simply with the use of cash-flow scenario based pay-off distributions. The method presented is a good addition to the toolkit of the real estate industry and corporate real estate managers.

 

Lecture Notes in Management Science (2011) Vol. 3: 179-192

3rd International Conference on Applied Operational Research, Proceedings

© Tadbir Operational Research Group Ltd. All rights reserved.

www.tadbir.ca

 

ISSN 2008-0050 (Print)

ISSN 1927-0097 (Online)

 

ARTICLE OUTLINE

 

·         Introduction

·         Using Cash-Flow Scenarios To Quantify Differences Between Real Estate Strategies

·         Creating Pay-Off Distributions From The Cash-Flow Scenarios

·         Comparing Two Real Estate Strategies With Pay-Off Distributions And Descriptive Numbers

·         Discussion And Conclusions

·         References

 

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