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Challenges of Commercial Real Estate Management: An analysis of the Swedish commercial real estate industry
KTH, School of Architecture and the Built Environment (ABE), Real Estate and Construction Management, Building and Real Estate Economics. Department of Urban Studies, Faculty of Culture and Society Malmö University, Sweden..
2015 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This dissertation consists of five papers with specific objectives. The overall objective is, however, to seek a deeper understanding of the challenges of real estate management in the commercial real estate sector.

The purpose of the first two papers is to provide a mapping of the industry and a better knowledge of the main organizational strategies of the companies and their view of customer relations. The third paper looks at the possibility that the online office market is a so-called lemons market, where primarily "bad" objects are marketed. The last two papers compares companies that outsource property management and companies that has property management in house. The first of the two (paper IV) address the question of incentives for effort and the second (paper V) address information for decision-making, both however consider how the real estate owner has created incentives and regulations to ensure that they are informed.

From the first paper we learn that the commercial real estate industry in Sweden already before 2004 had made a shift from a product focus towards a customer/service focus. However we could not see an increased customer focus in the annual reports during the years 2004-2008. Paper II also conclude that regardless of organisational form of management, inhouse or outsourced, the executives state that the chosen form I to be able to deliver best service to the customer.

In paper III a test of the online marketplace for offices in Malmö CBD was conducted to investigate if the market is a lemon market or not. Management form was one of the quality signals together with scale, existence of a local office and if the company has been involved in cases in the special court for rents (Hyresnämnden). The conclusion was that lemons hypothesis could not be rejected.

The conclusions from paper IV and V pinpoints the occurrence of differences in how to build incentives for the real estate management organisation, if it is organised in-house or outsourced. As the management teams in the outsourced setting primarily is governed by the contract between the real estate owning company, and the service providing company, and there it is decided when and how they are to deliver in terms of service and information. The real estate management teams in the in-house setting instead act under a large freedom with responsibilities governing the outcome of their services and not any checklists or jobdescriptions. Regardless of how the management teams are governed they do not have monetary incentives tied to their individual performance.

Place, publisher, year, edition, pages
Stockholm: KTH Royal Institute of Technology, 2015. , 52 p.
Series
TRITA-FOB, 2015:7
Keyword [en]
Real estate management, Quality in real estate management, Incentives for effort, information sharing, Organisational structure, Customer focus
National Category
Economics and Business
Identifiers
URN: urn:nbn:se:kth:diva-174063ISBN: 978-91-85783-53-3 (print)OAI: oai:DiVA.org:kth-174063DiVA: diva2:857592
Public defence
2015-10-20, Sal F3, Lindstedtsvägen 26, KTH, Stockholm, 13:00 (English)
Opponent
Supervisors
Note

QC 20150929

Available from: 2015-09-29 Created: 2015-09-29 Last updated: 2015-10-14Bibliographically approved
List of papers
1. Customer orientation in real-estate companies: The espoused values of customer relations
Open this publication in new window or tab >>Customer orientation in real-estate companies: The espoused values of customer relations
2011 (English)In: Property Management, ISSN 0263-7472, E-ISSN 1758-731X, Vol. 29, no 2, 130-145 p.Article in journal (Refereed) Published
Abstract [en]

Purpose: The purpose of this paper is to analyse how the espousing of customer relations has evolved over time in the real estate sector. Has a shift occured within the Swedish real estate sector from product thinking towards customer thinking? Design/methodology/approach: The research is based on an analysis of 25 commercial real estate companies’ annual reports from the last five years. The annual reports are analysed through text analysis using the theoretical framework of Mintzberg’s five Ps. Findings: The Swedish real estate sector has in general made the shift from product orientation to customer orientation. There was, however, no significant change during the last five years and most of the companies espoused customer orientation already in 2004. The study implies that it is not sufficient to categorise the companies between product or customer oriented. Instead four categories are suggested: product, customer, project, and financial orientated. Customer orientation, as measured here, was higher in listed companies and in larger companies. Research limitations/implications: The research in this paper is limited to the Swedish real estate sector. Originality/value: The paper shows the espoused values regarding customer relations of the commercial real estate companies that can be found in their annual reports. As the annual reports are a marketing instrument it should reflect the senior management’s core values. By highlighting how the top management’s core values regarding customer relations are espoused an understanding for the sector is built up.

National Category
Business Administration
Identifiers
urn:nbn:se:kth:diva-174057 (URN)10.1108/02637471111122435 (DOI)2-s2.0-79953273899 (Scopus ID)
Note

QC 20150929

Available from: 2015-09-29 Created: 2015-09-29 Last updated: 2017-12-01Bibliographically approved
2. Strategies in real estate management: Two strategic pathways
Open this publication in new window or tab >>Strategies in real estate management: Two strategic pathways
2013 (English)In: Property Management, ISSN 0263-7472, E-ISSN 1758-731X, Vol. 31, no 4, 311-325 p.Article in journal (Refereed) Published
Abstract [en]

Purpose: The purpose of this paper is to identify different strategic pathways for structuring the real estate management organization. Different strategic pathways regarding commercial real estate organizations, and the alignment of their business models with the environment are studied and outlined. Design/methodology/approach: This research is based on an analysis of 15 interviews with top-level managers in the Swedish commercial real estate sector. Findings: When making strategic plans for a company, the commercial real estate industry has two strategic pathways to consider regarding real estate management. The first is to choose whether to have its own frontline personnel or to outsource this function. The second is to decide how the leasing task should be treated: Should it be treated as a real estate manager’s task or should it be a function of its own in the organization? The conclusion of the study is that the organizations studied can be structured using both pathways, and the firm can still be successful. Furthermore, the argument by the top-level managers are the same regardless of how their organization is structured. They all base their strategic plans on the view that their structure of the organization is the best way to take care of the customer. In other words, they have the same arguments but haves chosen different strategic pathways to achieve strategic fit. Research limitations/implications: The research in this paper is limited to the Swedish commercial real estate industry. Originality/value: This paper outlines the strategic pathways for real estate management from a top-level management view.

National Category
Business Administration
Identifiers
urn:nbn:se:kth:diva-174058 (URN)10.1108/PM-10-2012-0034 (DOI)2-s2.0-84880843666 (Scopus ID)
Note

QC 20150929

Available from: 2015-09-29 Created: 2015-09-29 Last updated: 2017-12-01Bibliographically approved
3. The office market: A lemon market? A study of the Malmö CBD office market
Open this publication in new window or tab >>The office market: A lemon market? A study of the Malmö CBD office market
2015 (English)In: Journal of Property Investment & Finance, ISSN 1463-578X, E-ISSN 1470-2002, Vol. 33, no 2, 140-155 p.Article in journal (Refereed) Published
Abstract [en]

Purpose – The purpose of this paper is to test whether bad real estate owners drive out good real estate owners from the online marketplace for offices. Design/methodology/approach – This research is based on a statistical analysis of the advertisement of offices in Malmö CBD, collected weekly during a period of one year. Findings – The hypothesis that the market for advertisement of office properties is a lemons market cannot be rejected. The result that owners who have appeared in court more than once in the last two years being more inclined to advertise supports this. Research limitations/implications – The research in this paper is limited to the Malmö CBD office market. Practical implications – It provides an insight in how the online marketplace for offices works as a marketplace and how quality signals influences advertisement. Originality/value – This paper is a direct test of Akerlof’s classical lemon model.

National Category
Economics and Business
Identifiers
urn:nbn:se:kth:diva-174059 (URN)10.1108/JPIF-12-2014-0073 (DOI)2-s2.0-84923276922 (Scopus ID)
Note

QC 20150929

Available from: 2015-09-29 Created: 2015-09-29 Last updated: 2017-12-01Bibliographically approved
4. Real Estate Management: Incentives for effort
Open this publication in new window or tab >>Real Estate Management: Incentives for effort
(English)Manuscript (preprint) (Other academic)
Abstract [en]

Purpose – The aim is to examine how the real estate owner (decisionmaker) can ensure

that the preferred tasks are prioritised. In particular, the incentives to ensure motivation to perform in order to accomplish the strategic goals of the decisionmaker are investigated.

Design/methodology/approach – This research is based on an interview study of nineteen firm representatives, six decisionmakers and thirteen management representatives, all from the Swedish commercial real estate sector.

Findings – The study conclude that the real estate management organisation in the outsourced management setting is govern by the contract, in detail constituting work tasks, and in the in-house management setting there are a freedom with responsibilities instead of regulations.

Research limitations/implications – The research in this paper is limited to Swedish commercial real estate sector

Practical implications – The insight in the paper regarding how decisionmakers creates incentives for the real estate management organisation in the different organisational settings can provide inspiration to design incentives for effort.

Originality/value – It provides an insight regarding how the industry, depending on organisation setting, prioritise different work tasks and how incentives are created to enable effort.

National Category
Economics and Business
Identifiers
urn:nbn:se:kth:diva-174060 (URN)
Note

QS 2015

Available from: 2015-09-29 Created: 2015-09-29 Last updated: 2015-09-29Bibliographically approved
5. Information for Decision-making in In-house and Outsourced Real Estate Management Organisations
Open this publication in new window or tab >>Information for Decision-making in In-house and Outsourced Real Estate Management Organisations
(English)Manuscript (preprint) (Other academic)
Abstract [en]

Purpose – The aim is to examine how the real estate owner (decisionmaker) ensures being able to make informed decisions and how they differs according to organisational form.

Design/methodology/approach – This research is based on an interview study of nineteen firm representatives, six decisionmakers and thirteen management representatives, all from Swedish commercial real estate sector.

Findings – The study conclude that, regardless of organisational setting, the industry have a plan regarding handling information. The decisionmakers have all secured themselves access to required/desired information. How this is done and what kind of information it is however differ if the real estate management is in-house or outsourced. Furthermore a clear focus on financial and contractual information is evident in both organisational settings.

Research limitations/implications – The research in this paper is limited to Swedish commercial real estate sector

Practical implications – The insight the paper provides regarding required information can shed light on how information systems are built and how to improve your information sharing.

Originality/value – It provides an insight regarding how the industry, depending on organisation setting, prioritise different information and how the decisionmaker secures access to it.

National Category
Economics and Business
Identifiers
urn:nbn:se:kth:diva-174062 (URN)
Note

QS 2015

Available from: 2015-09-29 Created: 2015-09-29 Last updated: 2015-09-29Bibliographically approved

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