An investment decision tool for adaptive building re-use

Brano Glumac

ERES from European Real Estate Society (ERES)

Abstract: The purpose of this paper is to support a better decision in choosing the most suitable vacant office(building) to house new tenants. In order to achieve that a decision support tool (DSS) based on three methods is proposed. First, a discrete choice model (DCM) can estimate the future tenants' rent willingness to pay (WTP) based on the data generated with an online experiment. Second, a multiple-criteria decision analysis (MCDA) used a pair-wise comparison of building experts to establish the weight of criteria for a building transformation potential. Afterwards, an MCDA “multiplied” with the officially published cost approximation for five different levels of transformation. Lastly, rent WTP from DCM and transformation costs from MCDA are included in a discounted cash flow (DCF). With this DCF we can rank many buildings that are available on the market and make their preselection. The possibilities of this tool have been tested in a case study. Although applying decision tools for the building transformation projects has been studied, this paper suggests a specific tool that supports the transition from office space to housing for young people.

Keywords: DCF; discrete choice model; pairwise comparison; Real Options (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2022-01-01
New Economics Papers: this item is included in nep-dcm and nep-ure
References: Add references at CitEc
Citations:

Downloads: (external link)
https://eres.architexturez.net/doc/eres-id-eres2022-258 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:2022_258

Access Statistics for this paper

More papers in ERES from European Real Estate Society (ERES) Contact information at EDIRC.
Bibliographic data for series maintained by Architexturez Imprints ().