Practice Briefing: A practical framework for valuation and GIS-based measurement of commercial and industrial property externalities

James E. Larsen

Journal of Property Investment & Finance, 2026, vol. 44, issue 2, 178-186

Abstract: PurposeThis practice briefing develops a coherent framework for identifying and measuring commercial and industrial externalities, addressing the lack of standardised approaches in valuation practice.Design/methodology/approachThe briefing synthesises evidence from environmental economics, urban planning and real estate finance to construct a five-category typology and translate empirical distance decay patterns into GIS-ready measurement strategies.FindingsCommercial externalities exhibit predictable spatial signatures that can be measured consistently using proximity-based indicators. When organised into a structured typology, these patterns provide a basis for integrating externalities into valuation and investment analysis.Practical implicationsThe framework enables practitioners to replace subjective adjustments with transparent, replicable spatial measures, improving valuation defensibility, underwriting accuracy and communication among market participants.Originality/valueTo our knowledge this is the first unified, practitioner-oriented framework that consolidates empirical externality research into a usable structure tailored to commercial valuation and GIS-based analysis.

Keywords: Commercial externalities; Valuation; GIS; Distance-decay; Environmental hazards; Noise impacts; Agglomeration; Spatial analysis (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jpifpp:jpif-02-2026-0031

DOI: 10.1108/JPIF-02-2026-0031

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