Prof. Dr. Andreas Pfnür Dr. Annette Kämpf-Dern Department of Law and Economics

1. The role of perspectives and behavioural assumptions as family resemblances. Another round in creating a typology of Real Estate Business Research Eindhoven, April 2011 Prof. Dr. Andreas Pfnür Dr. Annette Kämpf-Dern Department of Law and Economics Chair of Real Estate Business Administration Hochschulstraße 1, 64289 Darmstadt Tel. ++ 49 (0) 61 51 / 16 - 37 17 Fax.++ 49 (0) 61 51 / 16 - 44 17 E-mail: office-bwl9@bwl.tu-darmstadt.de Web: www.immobilien-forschung.de The following is work in progress Comments are higly welcome!

2. Problem • Purpose: creating a typological order of real estate (business) research, to… • … evaluate research agendas: Do they fit their purpose? Are they complete? • … create synergies between agendas and avoid duplications of work • … built structures of real estate research organizations and networks • Challenge: completeness and taxonomy • What is the “naturally given” structure of real estate (business) research? • Without a doubt: taxonomic top-down approaches to break down research in a unique way have failed • More promising: cluster frameworks. But defining clusters is far away from trivial and also often far away from reality. Especially Due to the complexity of real estate business the cluster centers and boundaries are hard to define. • NOT in our focus: neither distinguish different research intensities, nor to track research agendas over time

3. Scope of this paper – What is real estate business research and what is not? • What do all objects belonging to „Research in Real Estate Business“ do have in common? necessary and sufficient! • Method: Scientific Research • Object of knowledge: Economics / Business Administration / Management • Object of experience: Real Estate / Real Property

4. I. Brief literature overview

5. Existing literature dealing with taxonomies of real estate topics • Brown (1979) - identify the most activating scientific real estate topics by an us survey (delphi study) • Lahey, Webb (1987) - Reflecting real estate curricula • Johnson, Roulac, and Followill (JRER, 1996) – identify the 16 most frequently presented topics at ARES annual meetings • Black, Carn, Diaz and Rabianski (1996) - Reflecting real estate curricula • Jud (JRER, 1996) – identifies ten distinct subject areas covered in JRER from 1986 through 1995 • Rabianski, Black (JREPE, 1999) – identify the most activating scientific real estate topics by an international survey (delphi study) • Dombrow and Turnball (JREFE, 2004) – develop nine topics by manually evaluating each paper published in JREFE and REE from 1988 through 2001 • Winson-Geideman and Evangelopoulos (2011) – indentify the 25 most frequently covered topics published in JREFE, JRER, REE

6. How can real estate topics be separated and clustered? • Bottom up • Empirical survey • Reflecting real estate curicula • Bibliometrics (citation analysis) -> Analysis is difficult, because RE research is too young and still fragmented • Cozitation • Bibliographic coupling between scientific papers • “Hands on” • Semantics -> Problem: RE research is too young and still fragmented • Latent Semantic Analysis (LSA) • Combination of methods (1. to 5.) • Top Down • Theoretical constructive: Family resemblances

7. Critical discussion of methods to structure fields of scientific research on an ex-post basis • Ex post analysis of existing research papers intend different purposes • E.g. tracing research trends • Ex-post analysis is hardly inspiring. It is following beaten tracks, without being complete or compulsory effective (bottom up approach) • High-quality scientific research has to be falsifiable, therefore innovations are added to existing knowledge and bodies of literature • Composition of existing knowledge is rarely called into question • Trend to inbreeding • Height of perspective must be increased, to identify coherences of different contents and blank areas (top down approach) • Target: Re-composition of existing knowledge • Result: (re-)defined meta structure of the field of research

8. II. Concept

9. What are family resemblances? • Philosophical idea of Ludwig Wittgenstein (1953) • Used to create non bidirectional taxonomic classifications (monothetic) • Describe cluster building equivalence relations (reflexive, symmetric, transitive) • Often discussed if classification processes are polythetic (set of objects in overlapping categories) • Family resemblances describe necessary but not sufficient attributes of objects • Family resemblances are exact in necessary conditions and inexact in sufficient conditions • No exact, but existing boundaries • Fuzzy category boundaries • Measure: distance to a central prototype of a category • Why is the Wittgenstein‘s theory useful to cluster real estate research? • Due to the complexity of real estate research cluster boundaries are hard to define • The „clusters“ of real estate (business) research are highly fuzzy

10. Common attributes for family resemblances in the economic research • To create a simple and distinct typology the attributes of the research objects need to be carefully selected • In real estate research prevalent, but – in the discussed context - with low explanatory power • „Real estate business function“ • „segment of value chain “ • „type of real estate“ • „research methodology“ • In contrast to common approaches • „research subjects perspective“ and • „reserach subjects behavioural assumption“

11. Derivation of attributes for family resemblan-ces: 3 economic purposes of real estate • Real Estate as a resource in theproductionprocess • Real Estate as an input in thephysicaltransformationprocess • Real Estate / Real Estate Service as an resultof a procductionprocess • Real Estate / Real Estate Service is an outcomeof a physicaltranformationprocess • Real Estate as an investment / financialasset • Physical Real Estate hasinitiated a financialtranformationprocess

12. If real estate fulfills 3 economic purposes, then there are 3 different perspectives • Real estateas a ressource in theproductionprocess • Real estate / real estateservicesas an outcomeofproduction • Mapping the real estateproductionprocess in a financialtransformationprocess User 3 different families, each with strong resemblances Producer Owner

13. Backup: Relationship between perspectives and economic subjects must not necessarily be 1 : 1 Real Estate 1 Real Estate 2 Real Estate 3 Real Estate 4 User Producer Owner Owner/occu-pier/producer Occupier-producer Developer for own portfolio Explanation Owner-occupier Construction company Open ended funds Example Construction company Insurance comp., Bank

14. If there are different perspectives, there should be different behaviour of economic subjects Perspectives Behavioural assumption (Example) User Ressource productivity max. ! 3 different families, each with strong resemblances Producer Profit margin max. ! Owner Market value of equity max. !

15. Uniqueness of real estate as economic good: 3 target perspectives of similar strength User (Ressource) Magic Triangle of Real Estate Business Research Real Estate Owner(Investment) Producer(planing, creating, operating, disposing)

16. Uniqueness of real estate as economic good: 3 target perspectives of similar strength User (Ressource) Magic Triangle of Real Estate Business Research Real Estate Owner(Investment) Producer(planing, creating, operating, disposing)

17. Uniqueness of real estate as economic good: 3 target perspectives of similar strength User (Ressource) Magic Triangle of Real Estate Business Research Real Estate Owner(Investment) Producer(planing, creating, operating, disposing)

18. Uniqueness of real estate as economic good: 3 target perspectives of similar strength User (Ressource) Magic Triangle of Real Estate Business Research Real Estate Owner(Investment) Gold Producer(planing, creating, operating, disposing)

19. Uniqueness of real estate as economic good: 3 target perspectives of similar strength User (Ressource) Magic Triangle of Real Estate Business Research Real Estate Debt Owner(Investment) Gold Producer(planing, creating, operating, disposing)

20. Uniqueness of real estate as economic good: 3 target perspectives of similar strength User (Ressource) Magic Triangle of Real Estate Business Research Real Estate Debt Truck Owner(Investment) Gold Producer(planing, creating, operating, disposing)

21. Scientific traditions can be incommensurable (Kuhn, Feyerabend). In our case this is likely! Perspectives Behavioural assumption (Example) Problem User Ressource productivity max. ! Incommensurability of behavioural assumption! B U T It is one and the same real estate! Producer Profit margin max. ! Without coordination, no efficiency in real estate economics Owner Market value of equity max. !

22. Why integrating the different research families? • Because of sustainability, in this context especially: economic sustainability • Small room to maneuver • Real estate are long-lasting and inflexible economic goods • Barely short-term change possibilities of real estate plans • Succesful real estate management imply to meet high compliance requirements Planing, construction, investment and utilization of real estate are subject to strict regulations in administrative law and rules of the society Real Estate is not only an economic good, but also a natural / social habitat

23. One real estate world, three scientific families – need for integration • Inefficient real estate planing on the owner side • Bankruptcy risk -> shortfall in payment on the producer side • Real estate price bubble -> exorbitant occupancy costs on the user side • Etc. • Inefficient real estate planing on the user side • Users have low willingness-to-pay -> low rate of return on the owner side • Inaccurate utilazation of real estate -> higher operating costs on the producers (here: real estate service) side • Etc. • Inefficient real estate planing on the producer side • No lifecycle-costing -> higher costs on the owner and user side • No ecologic sustainability -> Compliance problems on the owner and user side • Etc.

24. The World is not a disc (Phytagoras) – but real estate business research is! Maximizationofcapitalvalueinvested in real estate Maximizationofcost-benefitratioof real estateressources User‘sPerspective Owner‘sPerspective E.g. Public / Corporate Real Estate Management (narrow sense) E.g. InstitutionalReal Estate Management Producer‘sPerspective Real Estate as an object of experience E.g. project- and process management in planing, construction, operation and marketing Maximizationofprofitfromproducing real estateand real estateservices Source: Pfnür (2011)

25. III. Application and results

26. Paper topics Indices Office property • Data • 2526 articles • 1973 - 2010 • JREFE, JRER, REE • 25 factormodell • Latent SemanticAnalysis • Source: Winson-Geideman/Evangelopoulos, ARES 2011 Home-ownership Capital and leverage Retail Portfolio, risk, diversification Urban Land Rent Market-integration Lending Leases Apraisal Corporate Real Estate Options Adjustable mortgage rates Auctions Default and foreclosure Tax REITs Inflation Policies and regulation Brokerage and agency Brokerage industry Others: Research Methods Journals, publications and authors

27. Conference Topics (1/2) ERES 2011, by sessions Int. markets Price Determin. Housing User‘s Perspective Shopping Centers (2) Urban Economics REITs (2) Risk mgt. Land Economics Housing Policy and urban renewal Low income housing Valuation (3) Finance & Inv. (4) Market Research & Forecasting (3) CREM (3) Housing Markets (6) Office RE strategies Owner‘s Perspective Housing Policy Housing Finance Behavioural Studies in Green Buildings & Env. Policies Ethnicity, lifestyle and behaviour Property mgt. (2) Housing and market research FM & Place mgt. Property rights Green offices Urban Dev. & Prop. value Others: Ethics Green Buildings & Valuation Development, Regeneration & Valuation Development Real estate education Green Buildings & Policies (2) Producer‘s Perspective

28. Conference Topics (2/2)ARES 2011, by sessions Owner‘s Perspective Spatial Econ., Market interdependencies User‘s Perspective REITs (4) Government, div. (8) Spatial Analysis, GIS Commercial RE (4) Urban Growth (3) Externality Measuerement (2) Int. Market Evaluation Indices International RE (2) Housing (3) Appraisal and Valuation Portfolio mgt. & dynamics Brokerage and Transactions Others: Education (9) Sustainable RE and Dev. (4) Div. Producer‘s Perspective

29. Journals Owner‘sPerspective User‘sPerspective JERER REE Producer‘sPerspective Real Estate Business Research JFM JRER JREPM JREFE JCRE

30. There is no real estate value chain, but a real estate value system Random selection of real estate management disciplines (research subfamilies) Investment- management Workplacemanagement Owner‘sPerspective User‘sPerspective Site management Asset- management Producer‘sperspective Real Estate Business Research Ressource management Property- management Project-development Facility-management Marketing Project- management

31. Concluding remarks • There is a strong need to integrate the 3 perspectives for economic sustainable management of real estate • Probably the 3 scientific real estate families are not (enough) integrated yet • “Real Estate Finance” on the one hand side and “Sustainable Real Estate” may not be enough and adequate research families • Last financial crisis has revealed what happens, if one perspective (owner) becomes too dominant • Probably the scientific real estate community knows too little about the economies of utilization and production of real estate and real estate services • At the target: much broader “Common Body of Knowledge” for real estate business research containing a highly inter-family networked research from • the owner’s perspective • the producer’s perspective • the user’s perspective

32. The role of perspectives and behavioural assumptions as family resemblances. Another round in creating a typology of Real Estate Business Research Eindhoven, April 2011 Prof. Dr. Andreas Pfnür Dr. Annette Kämpf-Dern Department of Law and Economics Chair of Real Estate Business Administration Hochschulstraße 1, 64289 Darmstadt Tel. ++ 49 (0) 61 51 / 16 - 37 17 Fax.++ 49 (0) 61 51 / 16 - 44 17 E-mail: office-bwl9@bwl.tu-darmstadt.de Web: www.immobilien-forschung.de

33. Forschungscenter Betriebliche Immobilien-wirtschaft (FBI): Research one brick ahead! Residential Real Estate Management Public Private Partnership Corporate Real Estate Management Real Estateinvestment- Management Further information: www.immobilien-forschung.de