• No results found

Will the Appraisal Process for Commercial Real Estate be Automated? A study on the perceptions amongst professionals operating within the Swedish CRE industry

N/A
N/A
Protected

Academic year: 2021

Share "Will the Appraisal Process for Commercial Real Estate be Automated? A study on the perceptions amongst professionals operating within the Swedish CRE industry"

Copied!
39
0
0

Loading.... (view fulltext now)

Full text

(1)

Malmö University | Department of Urban Studies Bachelor Thesis, 15 hp | Real Estate Science

Spring Semester 2018

Will the Appraisal Process for Commercial Real Estate be

Automated?

A study on the perceptions amongst professionals operating within the Swedish CRE industry

Kommer värderingsprocessen för kommersiella fastigheter

att automatiseras?

En studie i uppfattningarna hos aktörer verksamma inom den svenska fastighetsbranschen

Victoria Fristedt

Supervisor: Peter Palm

Malmö universitet Nordenskiöldsgatan 1 SE-205 06 Malmö, Sverige 040-665 70 00, www.mah.se

(2)

Preface

This bachelor thesis is composed during the spring of 2018 at the Department of Urban Studies, Malmö University. There are some people without whom it would not have been possible to perform this study. My greatest appreciation goes out to each and every respondent who dedicated some of their time to provide information for my research. I would also like to thank my supervisor Peter Palm for his valuable guidance and constructive criticism throughout the writing process.

Malmö, Sweden. May 2018 ___________________________ Victoria Fristedt

(3)

Abstract

Title: Will the Appraisal Process for Commercial Real Estate be Automated? A Study on the Perceptions Amongst Professionals Operating Within the Swedish CRE Industry

Author: Victoria Fristedt Supervisor: Peter Palm

Problem: The digitalization of the appraisal process for commercial real estate is emerging. With rapid development of technologies, the opportunities to implement new efficient solutions arises. There seems to be a possibility that the process of appraising CRE can transfer from manual to automated. It has not yet been researched what professionals operating within the CRE appraisal industry in Sweden predict about the future. Thus, a study that aims to research what the perceptions of implementing automated systems are, as well as looking into how the appraisal process can become more efficient with help from technology, can be considered relevant.

Aim: The aim of the study is to investigate the perceptions of automation and emerging technologies amongst Swedish appraisers, system developers, banks and CRE owners. Furthermore, the aim is to investigate potential advantages and disadvantages of going from a manual appraisal process to a more automated one.

Research questions:

- What is the perception of automation amongst people operating in the CRE appraisal industry in Sweden?

- Could technology make the appraisal process for CRE more efficient and if so, then how?

Method: The study is performed with a qualitative approach. Semi-structured interviews have been performed with professionals operating within different parts of the CRE appraisal industry in order to achieve an as nuanced results as possible. The respondents’ answers have been analyzed along with what previous research has shown in order to reach reasonable conclusions.

Conclusion: The mindset of the industry is likely to determine the future of the automated appraisal process for CRE. The technology is most likely to be accessible long before the industry is convinced of its trustworthiness.

Keywords: Commercial Real Estate, Automation, Appraisal, Digitalization

(4)

Sammanfattning

Uppsatsens titel: Kommer den kommersiella fastighetsvärderingsprocessen automatiseras? En studie i uppfattningarna hos verksamma aktörer inom den svenska kommersiella fastighetsbranschen.

Författare: Victoria Fristedt Handledare: Peter Palm

Problemformulering: Digitaliseringen av den kommersiella fastighetvärderingsprocessen är på framfart. Genom allt snabbare utvecklad teknologi uppstår nya möjligheter att implementera effektiviserande tekniska lösningar. Det verkar kunna bli tekniskt möjligt att gå från en manuell till en automatiserad värderingsprocess för kommersiella fastigheter. Ingen tidigare forskning har genomförts med syfte att undersöka vad verksamma inom den svenska värderingsbranschen förutspår för framtiden. Således förefaller det relevant att undersöka vilka uppfattningar angående automatisering som finns hos personer som är verksamma inom kommersiell fastighetsvärdering. Dessutom är det intressant att undersöka på vilket sätt teknologi kan effektivisera värderingsprocessen.

Syfte: Studiens syfte är att undersöka vilka uppfattningar verksamma aktörer inom den kommersiella fastighetsvärderingsbranschen har rörande automatisering samt framväxande teknologi. I tillägg syftar studien till att undersöka vilka fördelar respektive nackdelar det kan medföra att gå från en manuell till en mer automatiserad värderingsprocess.

Frågeställningar:

- Vilka uppfattningar finns kring en automatiserad värderingsprocess hos verksamma aktörer inom den kommersiella fastighetsvärderingsbranschen?

- Skulle värderingsprocessen kunna effektiviseras med hjälp av teknologi, och om så är fallet, hur?

Metod: Studien har en kvalitativ ansats. Semistrukturerade intervjuer har genomförts med professionella som är verksamma inom olika delar av den kommersiella fastighetsvärderingsbranschen. Syftet med detta var att få ett så nyanserat resultat som möjligt. Respondenternas svar har blivit analyserade med avstamp i tidigare forskning för att nå rimliga slutsatser.

Slutsatser: Fastighetsbranschens inställning till en automatiserad värderingsprocess är vad som kommer avgöra om processen blir automatiserad eller ej. Det verkar troligt att teknologin kommer att vara tillgänglig innan branschen är övertygad om att den är pålitlig nog.

(5)

Table of Contents

1 Introduction ... 7

1.1 Aim ... 7

1.2 Demarcation ... 8

1.3 The Appraisal Process ... 8

1.4 Different Purposes of Appraising CRE ... 9

1.5 The Appraisal Systems ... 9

2. Theoretical Framework ... 10

2.1 Real Estate as an Economic Good ... 11

2.2 Intuitive Feel & Manual Adjustments ... 13

2.3 Transparency & Key Performance Indicators ... 13

2.4 Span of Uncertainty ... 14

2.5 The Future... 15

2.6 Summary of Chapter………. 19

3. Method ... 20

3.1 Selection of Informants ... 20

3.2 Methodology for Data Collection ... 21

3.3 Aspects of Quality ... 22

4. Empirical Part... 23

4.1 The Respondents ... 23

4.2 Interview Study ... 25

4.2.1 CRE or CRE? ... 25

4.2.2 The Respondents Experience of AVMs ... 26

4.2.3 The Respondents Thoughts About Automation and AI... 27

4.2.4 From Manual to Automated Appraisal Process? ... 28

5. Discussion ... 31

5.1 AI Within the CRE Appraisal Process ... 31

5.2 From Manual to Automated Appraisal Process ... 31

6. Conclusions ... 34

7. Implications and Suggestions for Further Researh ... 35

References.. ... 36

(6)

List of abbreviations

AI - Artificial Intelligence

AVM – Automated Valuation Model

CRE – Commercial Real Estate

DCF – Discounted Cash Flow

IV – Investment Value

KPI – Key Performance Indicators

LMV – Lantmäteriet, An institution which business activities are carried out on behalf of the Swedish government. The activities consist of mapping the country, demarcate boundaries and help guarantee secure ownership (titles) of Sweden’s real property.

MdAPE – Median Absolute Prediction Error

MV – Market Value

NOI – Net Operating Income

NPV – Net Present Value

RICS – The Royal Institution of Chartered Surveyors

(7)

1 Introduction

The digitalization of industries is emerging rapidly all over the globe. Statements like “The Fourth Industrial Revolution”, “The second wave of AI” and words like automation are often mentioned when speaking of the near future.

The process of appraising commercial real estate (CRE) contains several different components. Depending on the purpose of the appraisal these components may vary. In addition, the magnitude of the appraisal affects how the work is executed. As of today, Swedish appraisers perform most parts of the valuation process manually to subsequently assess a market value (MV). Along with rapidlyemerging technologies, automated valuation systems, so called AVM-systems, has been developed for appraising residential housing. An automation of valuation systems that appraise CRE are thought to be more complex, due to the more heterogeneous nature of these types of properties.

The conducted research in this field is partly critical to today’s already digitalized appraisal process. Critics are of the opinion that it contributes to lost transparency and standardized key performance indicators (KPIs).

Through increasingly advanced technology, fully automated valuation systems based on artificial intelligence (AI) are now under development. Such AI-based valuation systems have proven to be able to assess the MV of CRE with a lower median absolute prediction error (MdAPE) than when appraising CRE manually, e.g Geophy (2018). Little research has been done regarding the interest of a future automation of the appraisal process in Sweden. Which actors in the Swedish real estate industry could potentially be interested in investing in such systems and how might a future implementation be carried out?

1.1 Aim

During the past years a few fully automated and AI-based, so called AVM-systems, have been developed for CRE appraising. As of now, these types of systems have not yet been implemented within the Swedish CRE industry. The aim of the study is to investigate the perceptions of automation and emerging technologies amongst Swedish appraisers, system developers, banks and CRE owners. Furthermore, the aim is to investigate potential advantages and disadvantages of going from a manual appraisal process to a more automated one.

No previous research on the approaches of professionals within the Swedish CRE appraisal industry changing from manual to automated appraisals has been performed. Neither is there any research on under what premises a potential automation could be successfully executed. The aim will be achieved through finding the answers to the following questions:

(8)

- What is the perception of automation among people operating in the CRE appraisal industry in Sweden?

- Could technology make the appraisal process for CRE more efficient and if so, then how?

1.2 Demarcation

The study is geographically demarcated to Sweden and thus, addresses to Swedish legislation and standards.

1.3 The Appraisal Process

In Sweden the practiced process of CRE appraisal contains a few different steps that vary slightly depending on if the property to be appraised is a retail-, office-, multifamily residential- or some other type of property (LMV, 2013).

The most commonly used method to calculate the assessed market value (MV) of a commercial property in Sweden today is the discounted cash flow (DCF) model. In combination with this method appraisers usually take in to account if there are any comparable objects that have been items of recent transactions (Brunes, 2015). The DCF model can roughly be explained as looking at the cash inflows and outflows generated by the property yearly, where an example of inflow is rent, and examples of outflows are vacant spaces, operating costs and costs of maintenance. The cash outflows are normally mentioned under the common expression: Key Performance Indicators (KPI). By subtracting the annual outflows from the annual inflows, a net operating income (NOI) is calculated. The cashflows of a predetermined time frame (e.g. five years) are then discounted into a current value using a discount rate, which is an assumption about the interest rates or a minimum rate of return. The discounted cashflows together with a discounted residual value then represent the net present value (NPV) (Geltner, Miller, Clayton, Eichholtz, 2014).

A first step of the appraising process is the market analysis where the appraiser gathers information about the objects direct surroundings as well as the city where the object is located. Through this information the appraiser can get a comprehensive view of the prevailing conditions linked to the object’s location. Big amounts of statistic data regarding population growth, levels of education, commuting distances etcetera, are examined as well as adjacent amenities that may affect the assessed value. By means of the market analysis, the appraiser establishes a perception of what market rent is suitable, what percentage of vacancy may be realistic to take into account, and what yield can be expected (Brunes, 2015).

The second step is the on-site inspection of the property, which is often done both externally and internally. By investigating the property and its features on site, the appraiser receives an immersed knowledge about what may add or diminish value. Certain traits may be hard to detect without physically been seen, heard, smelled or felt. (Brunes, 2015). By performing an on-site inspection, the appraiser is given the chance to check, and verify that the obtained information about the property is accurate (Lind & Persson, 2015).

(9)

The next step is looking at recent transactions involving properties similar to the object to be appraised. If there are any comparable transactions in the object’s vicinity, these can be used as guidance of what investors may be willing to pay (Brunes 2015; Mooya 2016).

After performing these steps, the last part of the CRE appraisal process can take place. This is where the appraiser uses the gathered pieces of information to lay the puzzle. To assess the MV, the appraiser needs to perform a thorough analysis and possibly adjust calculations. The NPV calculated with the DCF model may need to be adjusted due to a certain property’s circumstances or characteristics. The appraiser’s intuitive feel, experience and expertise is utterly important at the final stage of the appraisal process (Persson, 2015).

1.4 Different Purposes of Appraising CRE

Commercial real estate is a capital-intensive asset and it is therefore important for the owners to regularly obtain the value of their property portfolio, or single properties, being assessed. To illustrate with an example, a company that owns and manages CRE can have employees, such as business controllers, that appraise their portfolio internally every quarter. The same company then needs to order an external appraisal of their portfolio yearly, which is performed by licensed CRE appraisers. The reason every CRE owner need licensed professionals to perform a yearly appraisal is because they need to present a total present value of their assets for the annual account of each financial year. It is the yearly appraisal statement that the business controllers, or their equivalent then base their internal appraisals on quarterly.

An investor who is planning on investing in new properties may also need professional help by a licensed appraiser to make strategic and informed decisions. Through expertise help, the investor gains knowledge about the prevailing MV of the property and thus, gets reassured what the maximum amount offered for it should be (Geltner, Miller, Clayton, Eichholtz, 2014).

1.5 The Appraisal Systems

The CRE companies and banks that perform appraisals in Sweden today use different databases and systems to gather information for their appraisal and to calculate the assessed value. Some of them have developed their own systems and some of them have made use of databases and systems from external companies. There are also companies that have adopted a mixed proceeding with external and internal sources of information. For example, a company that performs CRE appraisals might have bought a database that provides them with the market information needed for the market analysis, but they have developed their own separate Excel sheet system in which they use the DCF model to calculate the assessed MV. In addition to this, the same company might sell some of their market information to companies that are developing external systems.

The market for so called expert systems, which performs an appraisal based on standardized KPIs, is increasing. It is important to note that the assessed MV these systems provide is meant to work as a directive that professional appraisers then manually can adjust by changing the indata. As of today, the two commonly used suppliers of expert systems in Sweden do not base their technology upon AI (Värderingsdata 2018; Datscha 2018; Lind & Persson 2015).

(10)

2. Theoretical Framework

When appraising a property the aim is to assess the present market value (MV) for the time of the appraisal. The international definition of market value, as defined by RICS, is;

“Market Value is the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion” (RICS, 2017:1).

Figure 1 (LMV, 2013)

Image 1 explains real state appraising in a comprehensive manner. It proceeds from three conceptions: value theory, appraisal theory, and appraisal methods. Value theory is the philosophy regarding where value derives from and what is value-creating. Appraisal theory is a more precise explanation of the valuation theory which forms into a conceptual framework. The appraisal methods are the “tool kits” appraisers utilize to assess values (LMV, 2013). For value to arise, some elementary prerequisites must exist. When speaking of real estate there are five prerequisites that determines the core of the value theory;

(11)

• Profit – profit emerges by owning, or disposing the property.

• Utilization – The property can only be utilized by the title holder and/ or whom the title holder has given approval to dispose it.

• Conveyance – It is possible to convey the property. • Uniqueness – The property is, to some extent, unique.

Value is a relatively complex conception. To clarify the link between value theory and appraisal method there is the appraisal theory. Through this theory, it is explained that the purpose of the appraisal is depending on what decision there is to be made. There are two different terms of value that can be of interest:

- MV = Market Value; what you can sell the asset for today

- IV = Investment Value; what the asset is worth to you if you don’t sell it for a long time

Thus, MV is the expected price for which the asset can be sold at the current property market. This is an important and helpful measure of value since it gives investors an insight in what opportunity value the asset holds. IV measures the value for a particular owner who is planning to own the property for a longer time. By assessing the IV, the investor can calculate after their planned operating costs as well as investments costs and therefore generate their own IV. In other words, the IV is an individual value that will differ from another investor’s assessed IV for the same property. By assessing the IV, the question - What is the asset worth to me? – is answered. In contrast, the MV for a property is more general and therefore it will be very similar for all potential investors as of a given point in time. By assessing the MV the question – What is the asset likely to be worth to others? – is answered.

To summarize, the MV is an objective and exogenous value while IV is a private and subjective value (Geltner, Miller, Clayton, Eichholtz, 2014).

2.1 Real Estate as an Economic Good

Real estate diverges from other economic goods in many ways, commercial real estate even more so than residential. The certain traits of CRE are significant and affect how it functions as a tradable commodity. The traits that diverge real estate the most from other economic goods are according to (Mooya, 2016) the following:

Heterogeneity – Two properties can never be identical, thus real estate is very heterogenous to its character. Even if there are properties that are similar to each other they will always differ in some regards. The larger and the more unique architectonical design, the harder it will be to find comparable objects. This contributes to the challenge of appraising real estate and is also the main reason to why licensed appraisers with certain expertise and experience are demanded.

Motive for Acquisition- Investors’ motive for acquiring the property varies. Due to this, the MV will be affected depending on the motive and intentions. CRE is typically purchased as an investment which is expected to generate a return. A purely economic interest can be the

(12)

underlying motive to invest, sometimes even speculative. On the other hand, the initiative to invest in CRE can be non-economic and may derive from emotional states and sentimental attitudes. Depending on the motive to acquire property, the price and thus – the value, can be seen as more or less “true”. The circumstances and underlying incentives of a transaction are usually unofficial and contributes to the complexity of the appraisal profession.

Government Intervention – Real estate has a great social, economic and politic significance in society which makes government intervention inevitable. Whether direct or indirect, there are innumerable ways in which property is affected and regulated by the government. Taxes, interest rates, rent control, subsidies and legislative control are some examples of actions. In addition, restrictions regarding land use and development affects real estate prices, supply and demand to a high extent.

Inelasticity of Supply and Demand – In general, the supply and demand for real estate is not very sensitive to price changes. Since real estate takes a lot of time to produce and no price increase can speed up the process of what is available remarkably, the supply side of real estate is considered rather inelastic. The demand side of real estate is even more insensitive to price changes since there is no such thing as a satisfactory substitute. The inelasticity of supply and demand of real estate is characterized by the fact that the market does not adjust to price signals efficiently.

Fixity of Location – In contrary to a lot of other economic goods, real estate is immobile. This contributes to the heterogeneity of real estate since every property has its own unique location that cannot be changed. Depending on location, prices varies vastly. The external factors surrounding a property, such as crime rates, nature, commuting accessibilities, pollution etcetera, will have great effect on the MV.

Cost of Acquisition – Since real estate is such a capital intense asset, the vast majority of investors need to finance parts of their purchase with borrowed money. Because of this the demand and supply side are affected by the availability of credit and of the levels of interest rates.

Durability and Indivisibility – Real estate lasts, often over 100 years, this makes it possible to possess for a long time, longer than most other economic goods. Thus, the price will be high since when pricing it, one need to have a more long-term view than with almost any other commodity. This fact brings to the tasks of appraising CRE, appraisers need to predict the future as precise as possible. Real estate is also indivisible and larger than most other economic goods which adds to its complex nature.

Transaction Costs – Notwithstanding the price of a property, real estate is accompanied with big transaction costs. It is an economic good that comes with both taxes, fees to professionals such as appraisers, lawyers as well as construction- and maintenance workers. The high transaction costs of real estate constitutes barriers to efficient real estate markets (Mooya, 2016).

(13)

2.2 Intuitive Feel & Manual Adjustments

Persson (2015) emphasizes the importance of an appraiser’s verdict at the stage where the comparative analysis is performed. Whether the appraiser is using an expert system or other types of more manual systems to assess the value, the appraiser’s expertise and intuitive feel for the particular property should according to Persson (2015) always be taken into account. Adjustments based on the specific KPIs of a property such as vacancies, operative- and maintenance costs and such, can affect the assessed value substantially. This is where the task lies for the appraiser and where he or she uses their experience and knowledge to judge if the property to be appraised has qualities that are average, superior or inferior to similar properties (Brunes, 2015).

Furthermore, Persson (2015) states that there has been an increase in companies that omit the on-site inspections as an effect of relying on the standardized assessed MVs provided by expert systems. This is a risk since it contributes to insufficient appraisals based on numbers and information that is not adapted to single properties and their specific prerequisites. The writer expresses an opinion that it should be explicitly explained and motivated in the appraisal report if an on-site inspection has not been performed.

RICS (2017:1) states what content an appraisal report must- and should include in their annual report on global appraisal standards. Persson (2015) argues that by declaring sources of information and by describing the underlying analysis upon which the assessed value is based, the appraisal report gains credibility and transparency. This conforms with what RICS (2017:1) strongly advise for the appraisal report. In practice, Persson (2015) means this type of information is rarely declared due to time- and competitive aspects.

2.3 Transparency & Key Performance Indicators

A cardinal difference between appraising residential housing and CRE is that the CRE stock is very heterogeneous. Each and every CRE has essential features that are more or less unique. Location, probable vacancy rate, surroundings, architectural design and development possibilities are examples of such features. In comparison to the residential housing market, the market for CRE is characterized by low liquidity. This means that there are generally few transactions performed which contributes to a scarcity of recently performed transactions that are suitable to compare the property to be assessed with (Lind & Lundström 2009; Persson 2015; Kok et al. 2017; Grover 2016).

In 2009, Lind and Lundström stated that the Swedish real estate index had many years of results that showed the assumptions appraisers made regarding rents, vacancies and operative- and maintenance costs systematically led to higher NOIs than what was presented in companies annual financial accounting. Because of this, the yield estimated by appraisers is sometimes higher than it actually turns out to be in reality. According to the same research results, it appeared as if appraisers relied on standardized NOIs where regard to specific CRE and their characteristics was absent (Lind & Lundström, 2009). Persson (2015) support the criticism of increasing usage of standardized KPIs and warns that this becomes a tangible risk when appraisers rely so heavily upon these KPIs that they exclude other indispensable parts of the

(14)

appraisal process. This simplified procedure is often defended by the argument that there are few performed transactions that are suitable to compare the property to be assessed with. The author anyhow mentions, that a rapid development of matrixes with KPIs that are updated a lot more frequently has emerged over the past years. These matrixes are thought to be more viable and close to reality, notwithstanding that the appraisers should always practice the manual steps of the appraisal process and use their expertise to adjust in-data.

LMV (2013) points out that the operative- costs increases over time since the efficiency of the machines and systems within a building decrease yearly. In addition to this, the maintenance costs will also increase with time, since spaces and materials get worn out gradually. This should be taken in to account when calculating the NOI since it will result in a lower assessed value, given the vacancy rate is consistent.

A not insignificant part of the Swedish CRE markets transparency is lost with the so called “packaging” of properties according to Persson (2015). Roughly explained this is a way of buying and selling CRE in the shape of company shares to attain tax reliefs (Kågerman, 2015). This phenomenon in combination with the already low liquidity of the CRE market makes the available information of transactions very limited. The information found about such transactions may be incomplete and given with time lag. This time lag theory is supported by Cannon and Cole (2011) in their study where they demonstrate the problematic aspects that the time lag contributes to when the market turns. MVs tend to be assessed artificially low when the market has had an upturn and the opposite applies when the market has had a downturn. In unanimity with these assumptions, Grover (2016) claims that the less available information that is obtainable at the time of the appraisal, the harder it is for the appraiser to identify differences between the current property to be assessed and comparable ones. As a result, it becomes consistently hard for the appraiser to ascertain they have assessed a MV that is reliable and reflects the prevailing market.

2.4 Span of Uncertainty

Persson (2015) describes the assessed MV as a theoretical construction and value in itself as a function of potential future profits. With this in mind, historical facts about the property should merely play a role as guidance when assessing potential future profits. Since the future is more or less unpredictable, the occurrence of uncertainty will always exist when appraising property.

Over the years, similar appraisal experiments have taken place in several different countries, e.g. the ones presented by Crosby (2000). During these experiments a high quantity of appraisers were provided the same background information and then got to appraise the same property. The results showed that on a market with high liquidity where information was easily accessible the span of uncertainty was +/- 10% of the average value. Thus, the span increases the lower the liquidity and the less the information there is to access about the market. The results presented in Crosby’s study conforms with the results of Cannon and Cole’s (2011) study. They researched the uncertainty span of CRE appraised in the U.S over 25 years and found that the span was +/- 12%.

(15)

In Bellman’s (2012) dissertation it is stated that licensed real estate appraisers have a thinking pattern which is characterized by rather high complexity. With this background information, the writer implies that the assessed value will vary slightly depending on who the appraisal is performed by. In unanimity with Bellman, Mooya (2016) explains two “behavioral issues” which often affects the practice of appraising. These issues are anchoring and client influence, where anchoring is explained as a starting point bias that the appraisers may be influenced by unknowingly. Further explained, anchoring means the tendency to attach or “anchor” thoughts to a reference point, even though they might not have any relevance to the current property to be assessed. Thus, appraisers tend to rely on, or take disproportionate regard to prior information which may lead them to overseeing complementary information when assessing the final MV. Client influence occurs when appraisers stop being objective when performing the appraisal. A bias emerges when the appraiser starts relying on opinionated information provided by the customer. These theories are backed up by Grover (2016) who emphasizes that appraisers bias contributes to a broader span of uncertainty. According to Brunes (2015) it is not unusual that investors, banks or others who perform and- or order appraisals, hires an additional appraiser to perform a second opinion, as an assurance that the uncertainty of the assessed value is lowered.

2.5 The Future

RICS (2017:2) describes the real estate industry as one that generally lags behind its customers when it comes to emerging technologies and digitalization.

Lind and Lundström (2009) predicted a development towards expert systems and more or less automated appraisal in their book. They assumed a digitalization of the CRE appraisal process would change the appraiser’s role and work assignments. According to the authors it had already then been long anticipated to perform more frequent appraisals of the CRE stock in Sweden. The reasons this would be desirable would partly be the possibility to equate CRE with stocks, bonds and other securities, and partly be the possibility to detect indices of diverging trends at an early stage.

RICS (2017:2) discusses how the ongoing so called “Fourth Industrial Revolution”, which is explained as a digital revolution characterized by a combination of technologies working together, is likely to affect the appraisal profession and industry. According to them, due to the rapidly emerging technologies, it is inevitable to circumvent substantial changes for any industry. RICS predicts appraising to be one of the professions that will be needing to undergo an extensive conformation to adapt in the near future. A few examples of how the effect automation will have on the appraisal industry are according to the report the following:

- An increase in the consistency, transparency and timeliness of transactions.

- Reduced costs for managing property portfolios, with less appraising jobs as an result. - A change in required skillset where appraisers are likely to become client managers or

consultants.

(16)

Albeit, it is mentioned that several likely challenges will arise for the global platforms. Political, legislative and geographical boundaries may constitute barriers for innovation.

Kok, Koponen and Martinez-Barbosa (2017) discusses the inefficiency the manual steps of the CRE appraisal process contributes to. They argue that time lag and costs can be reduced by implementing a fully automated valuation system, based on AI for CRE. The authors emphasize the importance of minimizing time lag since this would contribute to banks and credit institutions acquiring effective values that better reflects the prevailing market situation. Since CRE is commonly used as collateral, the assessed MV determines decisive parts of companies leverage. According to the authors, systematical time lag in combination with inaccessible information, may contribute to greater societal-risks such as misjudged leverages. Furthermore Kok et al. (2017) discusses the fact that a fully automated AVM could facilitate the process of assessing market values internally for CRE owners of larger and smaller scale. The possibility to get up-to-date market values quarterly aswell as annually could potentially lead to more correct balance sheets.

Kok et al.(2017) promotes the benefits of appraising CRE with a fully automated valuation system based on AI. They argue that the algorithm of an AI-based system can process far more information (so called Big Data) and take many more variables into consideration than humans can. In addition, the authors advocate an AI-based system because it can perform this job in a couple of seconds. Yet another advantage Kok et al. (2017) sees with a fully automated system for appraising CRE is that the potential bias and client pressure mentioned by Grover 2016; Mooya 2016; Brunes 2015 and Bellman 2012, is eliminated. RICS (2017:2) agrees with many of Kok et Als opinions regarding AVMs and states in their report that AI has made great recent progress as a result of increased computing power. In the same report it is argued that algorithms that appraise property will improve as better data becomes available and that, by assistance from machine learning, the appraisal algorithms will be ensured to learn from the use of its realworld outputs and thus, improve its results over time.

For the industry of CRE to adapt and implement AI-based AVMs it would probably take a lot of education among appraisers and others operating within the industry. The change will not happen overnight but more likely gradually. Only with a general growing trust for AI within the business, it can be implemented and accepted (Kok et al. 2017). As a comparison mentioned in RICS’ (2017:2) report, the development of the retail industry, with increasing competition from online merchandising, have by far exceled any boundaries imagined twenty years ago.

When appraising residential housing, AVM-systems are already established and standard both in Sweden and internationally (European AVM Alliance 2018; Freddie Mac 2018). Epley (2017) expresses that the fact that AVM-system developers compete is problematic, since this contributes to a decrease in the transparency of appraisal statements. Lost transparency may lead to lessened trust for the assessed MV and this is a result of system developers wanting to protect their proceedings to gain competitive advantages. This theory is supported by Grover (2016). Mooya (2016) seems to be opposed to AVMs and the increased use of them globally. He expresses his skepticism by questioning if the assessed MV provided by an AVM is more

(17)

accurate than manual appraisals and emphasizes a concern regarding if a MV assessed by a machine really can be considered as a true appraisal.

It is stated in RICS’ (2017:2) report that the emerging technologies will automate appraisal tasks and many of them will be effectively executed by machines in the future. Nevertheless, there are tasks that depends heavily on interpersonal skills and physical presence. Even if a machine could potentially do the job, it will probably not be the case since the value of interaction between people is higher.

(18)
(19)

2.6 Summary of Chapter

Table 1 presents an outline of the main topics discussed by different authors throughout the literature review. If comparing it to figure 1 above, which presents real estate appraising in a more comprehensive and theoretical manner, some similarities can be distinguished. When looking at real estate as an economic good, and what derives a MV, it is closely connected to the information that appraisers seek in order to estimate an as accurate MV as possible. Several of the authors fear loss of transparency as well as over usage of standardized KPIs. These concerns can be translated into loss of capability to control that the information an appraisal is based upon is regarding all of the foundational information that real estate appraising is based upon, as shown in figure 1.

(20)

3. Method

In this chapter I will narrate and discuss my choices of methods and the proceedings of the study. The chapter starts off with explaining the procedure of finding suitable respondents and it then continues on with a presentation of how the data for the study has been collected. Then I move on to looking at the quality aspects linked to the methodology of my study and discuss advantages and possible disadvantages. The last part of this chapter contains a narrate of how I have analyzed the collected data.

3.1 Selection of Informants

The aim of the study is to research what the perception regarding automation of the CRE process is amongst professionals who operate in the industry. Thus, when making the selection of respondents for the interviews the strategy was to send out enquiries to people who works with different aspects of the CRE appraisal process and at different companies. The aspiration was to interview some authorized appraisers working at consultant firms, some people working with the development of appraisal systems, at least one business controller who performs internal appraisals and at least one person working with appraisals at a bank. To get a more nuanced vision of the perceptions it felt important to not only interview people who operates locally. In the same time, it was necessary to demarcate the study, why the aspect of appraisers performing mass appraisals for taxation purposes was left out.

I contacted about ten professionals who I found highly desirable to interview. Out of these enquiries I got seven positive answers where interviews were planned. The target was to interview somewhere in between 10-15 professionals in order to get a broad but yet manageable spectrum of information. The next strategy was to ask the professionals who confirmed they wanted to partake in the study if they knew any other professionals who they thought could be suitable to interview. This question was not posed prior to the interviews but merely if it felt appropriate when performing them. It turned out to be a good way to find more informants since some of the respondents proposed possible people for me to interview without me having to ask. By receiving these recommendations of professionals to ask, I sent out four more inquiries which three replied and confirmed they wanted to partake in the study. Two of the face to face interviews were performed with two respondents at the time. Which lead to the total amount of 12 respondents interviewed, distributed over 10 interview situations. Three of the interviews were performed through phone.

The respondents primarily operate in Malmö, Stockholm and the county of Skåne in southern Sweden. Albeit, some respondents who works with development and sales of appraisal systems indirectly operates in wider regions.

The 12 respondents who provided information for this study represents several aspects of the Swedish industry of CRE appraisals and the final assortment can be seen as suitable as well as appropriate.

(21)

3.2 Methodology for Data Collection

The method chosen to collect data for this study is a semi-structured interview. A semistructured interview is distinguished by predetermined topics and questions that can cange form as the interview goes on. The order of the questions is adjusted by the researcher and posed when they feel most suited in regard of the respondents answer or reaction to former questions. With this in mind, I felt a semi-structured interview technique was to prefer before a structured interview technique, where the questions asked are predetermined and asked in a certain order, or an unstructured interview technique, where there are no predetermined questions.

Interview questions can be formed in a more or less leading manner. It is usually appropriate to avoid leading questions to the highest extent possible to obtain more objective answers. (Seminarieboken, 2012).

The aim of the study determined that a qualitative approach was suitable to adopt. Qualitative studies are according to (Seminarieboken, 2012) defined as a method that one can use to gain deeper understanding for a specific problem, a specific event or a specific situation. The possibility to generalize are smaller when adopting a qualitative method than when choosing a quantitative one. Since the information sought could not be measured or assessed in a numerical way, a quantitative approach seemed less appropriate for this study.

All interviews took place during the month of April in 2018 and the same interview guide (appendix 1) and information letter (appendix 2) was sent to all respondents prior to the interviews. Through providing the respondents with this information they were given an opportunity to prepare themselves and they could also get an explicit perception of what the interview would contain. The aspiration was to achieve an enriched dialogue by giving them the chance to reflect beforehand. In total, 10 interviews were performed with 12 respondents. Three of the interviews were carried out through phone, while the rest were done face to face. When performing the interviews, I allowed the conversation to proceed with follow-up questions, sidetracks and clarifications when requested. Thus, the questions where posed in a varying order during each and every interview. The purpose of this was to make the respondents feel comfortable and as a result, receive more nuanced answers. To further serve that purpose I chose to not record the interviews, which the respondents were informed of through the information letter. Such a strategy is presented by Ekengren & Hinnfors (2012). During the interviews I took notes which I then complemented with recording audio memos right after each interview took place as suggested by Ejvegård (2009).

By adapting a semi-structured interview technique, I felt the conversations became enriched and informative. It was great support to have the interview questions as a premise to fall back on meanwhile performing the interviews. It contributed to all dialogues being about the same main topics, in the same time as the respondents could talk freely about their experiences and from their point of view.

(22)

3.3 Aspects of Quality

When looking at external reliability, the qualitative method of this study can undoubtedly be criticized. The term external reliability can be explained as how high the possibility is that someone else who decides to perform a similar study, with the same methodology for data collection, would reach the same results. Albeit, there are some aspects worth to take into account that are hard to replicate. Time and the way it affects people as well as the society, is probably the most important aspect to acknowledge here. If someone were to perform the same interview, with the same respondents and even with the same interview questions the result of the study would probably differ, at least slightly. Partly depending on how far from now the same study would take place and partly because the dynamic of the dialogues would be different between the respondents and a different individual than myself. The results of the study are a product of the present, thus the reliability can be considered rather high.

When examining the interview questions (appendix 1) and thinking back at the interview situations, I have affirmed that each of them got answered during every interview. Considering my choice of adapting a semi-structured interview method there was hardly any interview where the conversation was kept strictly to answering the questions. Nevertheless, none of the questions felt redundant. There was anyhow, one of the questions which phrasing was criticized by almost every respondent and it was question number 4; “How long does an appraisal assignment usually take?”. Due to the many different types of CRE that exist, and depending on if it is a first-time appraisal or not, the respondents found this question too unspecified and broad. I would nevertheless not have liked to exclude question number 4 from the study, to me it was one of the questions that gave the most interesting answers. Even though the respondents found it hard to answer, I could soon trace patterns from their responses. Because of this, the question was valuable for the study.

I am under the impression that a qualitative approach was a good choice of method to find valuable and relevant information for this study. Notwithstanding, that a quantitative approach could have reached out to a broader span of professionals operating in the CRE appraisal business. My belief is anyhow, that a survey would not have given me as nuanced and honest answers. When interviewing people, one gets the advantage of finding a dynamic during the conversation. Face to face interviews are especially good for this since you can perceive indirect signals through body language in addition to the verbally acquired information. What I would have changed if possible, would be to perform every interview individually with only one respondent at the time. Even though I found the two interview situations where there were two respondents partaking very informative and interesting, it is probably inevitable that one respondent gets more time to talk than the other. The answers of the second respondent might be slightly affected depending on what the respondent who answered a question first said. Due to the likeliness of this, the objectivity of the information gathered during those two interview situations has to be considered as lower.

(23)

4. Empirical Part

This chapter is initiated with a overview of the respondents that have provided the information for the study and it then continues on with a compilation of the empirical findings provided throughout the research. The material from the interviews is presented in the same order as in the interview guide (Appendix 1) but in longer paragraphs where similar questions are interconnected and presented under the same heading. When summarizing and presenting the interviews the aim has been to transcribe the interviews in an objective manner. To succeed with this, the parlance of the respondents is adapted to the highest extent possible.

4.1 The Respondents

The respondents work in different fields of the CRE appraising industry. Figure 1 and 2 below shows the variety of professions and the varying length of experience among the respondents who has taken part of the study.

Figure 1. Shows the spread of the respondent’s professions.

(24)

Respondent 1. Face to face interview, Stockholm

The first respondent is working for a company that develops appraisal systems and is responsible for the development and sales of the CRE systems. Respondent 1 has five years of experience within the real estate industry and four of which within the company he or she works for now. Prior to this current position the respondent worked with CRE appraisals.

Respondent 2. Face to face interview, Stockholm

The second respondent works as an CRE appraiser at a company which specializes in providing real estate services to its clients. The respondent has three years of experience within the real estate industry and has worked at the current company during those three years. It should be mentioned that respondent 2 and 3 were interviewed together.

Respondent 3. Face to face interview, Stockholm

The third respondent is a trainee appraiser at the same company as the second respondent. He or she had three months of experienced at the time of the interview and had been working at the company for those months.

Respondent 4. Face to face interview, Malmö

The fourth respondent is working as a business controller at a CRE company specializing in acquisitions, new development, re-development and property management. He or she has 7,5 years of experience within the real estate industry and has worked at the same company for those years.

Respondent 5. Face to face interview, Stockholm

The fifth respondent is working at a company that develops appraisal systems and is primarily responsible for educating people within the system and selling the system. He or she has 3 years of experience within the real estate industry and worked as a real estate agent for the first of those years. The respondent has had the current position for about a year. It should be mentioned that respondent 5 and 6 were interviewed together.

Respondent 6. Face to face interview, Stockholm

The sixth respondent is working at a company that develops appraisal systems and is primarily responsible for developing systems. He or she has worked with real estate both nationally and internationally and has worked with digitalization for approximately five years.

Respondent 7. Phone interview

The seventh respondent is the CEO of a CRE company which specializes in providing real estate services to its clients. He or she works full time as an appraisal consultant as well as being CEO and has 21 years of experience within the real estate industry. The respondent is Stockholm based and has worked at the current company for 20 years.

(25)

Respondent 8. Phone interview

The eight respondent is working as a real estate analyst at a bank. He or she has over 20 years of experience of the real estate industry and is Stockholm based. The respondent has worked at the current company for 10 years and primarily analyses the industry and markets as well as giving second opinions on appraisals and consult other appraisers at the bank.

Respondent 9. Face to face interview, Malmö

The ninth respondent is working as a CRE appraiser at a company which specializes in providing real estate services to its clients. He or she has responsibility over the appraisal department at the company and has five years of experience within the real estate industry. The respondent has worked at the current company for two and a half years and worked with CRE appraisals prior to this position as well.

Respondent 10. Face to face interview, Malmö

The tenth respondent is working at a bank and is regionally responsible for CRE appraisals in the county of Skåne. He or she has worked in the real estate industry for approximately 29 years, at the current bank for 18 years and has had the current position for 12 years.

Respondent 11. Face to face interview, Malmö

The eleventh respondent is working as a CRE appraiser for a company which specializes in providing real estate services to its clients. He or she has worked within the real estate industry for one and a half years and has had the current position at the Malmö office for one year. It should be mentioned that respondent 11 is working at the same company as respondent 2 and 3 but at a different location.

Respondent 12. Phone interview

The twelfth respondent is responsible for business development at an appraisal company. He or she is Stockholm based and works partly as a consultant for CRE appraisal and partly with developing the appraisal systems internally at the company. The respondent has 27 years of experience within the real estate industry and has worked at the current company for 21 years.

4.2 Interview Study

4.2.1 CRE or CRE?

Through the research, some information that makes the answer to the question about automation more complex was discussed. There is a significant difference between CRE and CRE. How the appraisal process proceeds vary a lot depending on what type of property, or properties, the appraiser is going to appraise. For instance, multifamily apartment buildings differ a lot from office- and retail properties. Then there is CRE that is very rare and thus, has more unique features than others such as sports arenas. Industrial and logistic CRE has its own prerequisites. In addition, it is often included in the CRE appraisal profession to appraise construction rights,

(26)

which means predetermining the MV for a property that does not exist yet. Another important aspect is if the assignment is to assess the MV of one property or of a whole portfolio.

The research has also shown that how time consuming an appraisal is depends vastly on the type of property the assignment is regarding and if it is a first-time appraisal or not. The respondents answered that an appraisal assignment which consists of a first-time appraisal of either a multifamily building or an office building generally takes one to two days’ worth of work. Since the appraiser usually works with other assignments parallelly and they sometimes need to await additional information from the property owner during the process the delivery time of an appraisal seems to be about 1,5 weeks. An on-site inspection is always performed for a first-time appraisal but is usually considered redundant if the same property is to be reappraised. In the case of performed changes the property owner can instead provide the appraiser with this information.

4.2.2 The Respondents Experience of AVMs

Most respondents were familiar with automated systems for appraising residential housing, although very few of them had worked with such systems themselves. Either there were other departments at their office that works with such systems or they had come across them in their private life when browsing websites like Hemnet (2018), which is the Swedish equivalent of Zillow (2018).

When posing the question if the respondents had any experience of AVMs for CRE the answer varied because most of the respondents interpreted the question differently. It became clear that some of them considered the two most frequently used expert systems to be automated which, one or the other, most CRE companies and banks has access to and uses partially when assessing MVs in Sweden today. However, all the respondents working with system development answered no when asked this question. What should be noted though, is that when the respondents who answered that they did consider these expert systems to be automated did so, they all added that the MV these systems assess are not ones that they rely on. It is merely utilized as an instrument which provides guidance. This is also how it is supposed to be adapted in the appraisal process according to respondent 5 and 6 who both works at the company that provides one of the most utilized expert systems in Sweden as of today. As respondent 6 expressed:

“The system is supposed to be used as support wheels, and our job is to provide and develop better and better support wheels for the appraisal process” -Respondent 6.

None of the respondents had worked with AI-based AVMs, neither for residential or commercial appraising.

(27)

4.2.3 The Respondents Thoughts About Automation and AI

There is a rather unanimous answer to the question if the respondents would feel comfortable relying upon AI for their appraisal process. The answer is both yes and no, the perception seems to be that as of today the AI technology is simply not good enough to be able to perform many of the appraisal tasks in a desirable way. Or, to rephrase the answers you could say that AIbased appraisal systems seem to be so unfamiliar in the appraisal industry as of today that it is hard to imagine how it could work and be reliable.

Due to the high complexity of appraising CRE, it is hard for the respondents to imagine that an AI could be able to find all the information needed and take into regard the unique physical aspects of each property. In order for the industry to trust that the AI has access to better in-data than what they do, a radical, possibly legislated change must occur.

What became clear during the interviews is that the market of CRE is characterized by rather high internal integrity within companies. It is a given competitive advantage to not share all of the information regarding leases, calculated risk and yield, transaction prices, market information and so on. Thus, the attitudes towards an AI being able to find more correct and suitable information are not very positive.

Albeit, when discussing AI and the possibilities of technology developing enough to gain trust within the industry there was a distinct difference in attitudes between the respondents with more experience and the respondents with less experience. All of the younger respondents that have 1-5 years of experience were generally more positive and thought it more likely that AIbased systems will be a part of their profession in the foreseeable future. According to them, it is more a question of – when the technology is good enough, will the industry willingly adapt to it? The perception of the younger respondents is that there is a general prevailing reluctance and skepticism towards adapting to new ways within the industry and that this might be the biggest challenge for changes to take place.

“One could imagine that our older colleagues would give very different answers to these questions” – Respondent 2.

Nevertheless, it should be said that some of the respondents with longer experience did not dismiss the thought of implementing automated and potentially AI-based systems. Albeit, the general perception seemed to be that it is pretty far off in the future that the technology will be trustworthy enough. Whilst the perception among the respondents with 1-5 years of experience it seemed more likely that this can occur sooner.

The attitudes between the respondents working at different system developing companies varied. Where respondent 1 seemed more positive towards automation and AI while respondent 6 and 12 did not.

Above all, the respondents expressing skepticism towards AI emphasized that the main adverse effect could be a transparency loss, with more standardized KPIs and inability to check up

(28)

sources for the assessed value as a possible result. In addition, the fact that CRE companies want to keep parts of their information, and ways of finding it, within the company creates a barrier that might be hard for an AI to peer through.

4.2.4 From Manual to Automated Appraisal Process?

“To be able to answer the question of what parts of the process should be automated, one need to break down the term value first, what is value really?” – Respondent 2.

To the question if there are ways to make the CRE appraisal process more efficient there is one unanimous answer and that answer is “yes”. When discussing how and what parts of the process, there were also reoccurring answers. What was repeatedly discussed was the differentiation between “hard and soft values” and how hard values would be more suitable for automation. To gather in-data, input numbers and information received from clients, to compile fractions of relevant information out of big amounts of documents are examples of what is considered hard values. Whereas interpersonal meetings with clients, intuitive feel and other parts of the process that contains customer contact and human senses is considered soft values. The parts of the appraisal process that consists of handling the hard values are explained as very time consuming and often routinely. The same type of reasoning could be distinguished from the answers of respondent 4 who works with internal appraisals and in contrary to the other respondents represent a client’s point of view.

“The connection on-site inspections as well as other contact with the appraisers brings is highly valuable and would potentially be lost if the process was fully automated” – Respondent 4.

“To me, any technology that would facilitate the parts of the process where I have to write things down and/ or input data manually are very welcomed to be automated” – Respondent 10.

After interviewing all the respondents, it seems as if an automation is most likely going to happen step by step. With help from the emerging technologies small parts of the process will be automated and facilitate gradually rather than the transition being companies investing in a fully automated system and adapt to it overnight.

“The biggest challenge will be convincing the people operating in the CRE appraisal industry that the new technology is reliable and build trust with them. Considering how the prevailing mentality is, it almost seems more likely that the change will not come from within the CRE industry, but more likely externally from pressure of adapting to how other industries have been successfully automated” – Respondent 11.

(29)

When discussing these questions with the respondents the same pattern as for the former questions was distinguished. The younger respondents seemed to be under the impression that a fully automated process is the future whereas for some of the older respondents seemed to be under the impression that this would be very hard and unlikely.

“The CRE market is characterized by low liquidity and each property has very unique features which is why I find it unlikely that the appraisal process will be fully automated in any foreseeable future” – Respondent 7.

There was a slight difference in asking the respondent who works with system development about what parts of the CRE appraisal process are most suitable to automate. This might have been because of competitive reasons. As one of these respondents humorously said:

“You see, I cannot answer that question completely honestly or in a detailed manner, because then our competition will read this and steal our ideas” – Respondent 12.

A first step towards automation that several respondents agreed upon would be most likely is developing some sort of synchronization between the appraiser’s systems and the client. As of today, few clients have systems through which they provide the appraisers information about the property or properties in an efficient way. Appraisers usually go through a scattered gathering process of the necessary in-data for each and every appraisal.

“If a system where our clients could provide us the in-data we needed for a certain appraisal was developed and that system was linked with our internal systems in which we make the calculations based of off that information – it would surely facilitate, and perfect my job” – Respondent 9.

Another thought that several respondents rendered was the fact that multifamily residential buildings in general has a less complex appraisal process. Especially absolute residential buildings that does not have any spaces for stores or other businesses at the street floor. A reason for this simplicity is, that in contrary to other CRE, the appraiser can assume that the vacancy rate is and will be 0, at least in coveted locations. This is a vast contrary to i.e. office- and retail property where there is always a risk for vacancies and where the leases all have different terms and conditions.

“It is not unusual for retail leases within malls to have a term which allows the tenant to terminate their lease in the event of H&M moving out. In general retail- and office space leases differ a lot from case to case” – Respondent 11.

According to respondent 1, the first fully automated system likely to be implemented in Sweden will be one which appraises multifamily residential buildings.

(30)

The respondents explained that during the appraisal process they all use a raft of different systems and databases. It seems to be standardized for each appraisal company to have an internal calculating routine within excel where the DCF method is adapted. In addition, the companies have internal databases where they gather and update market information. To further access information and compare assessed values, most companies have bought in one of the two large external expert systems.

“The thing is, every company is convinced they have the best internal information, thus they are more inclined to continue on developing their own databases and systems than buying an external one. It is also easier for companies to update and improve the system more regularly if it is their own” -Respondent 12.

All of the respondents answered that they would like to partake, if given the opportunity to get further education in automation.

Chart 1, The respondents general approach towards automation.

The last question each respondent was asked was what their general approach towards automation of the CRE appraisal process is on a scale from 1-10. 1 represented a negative approach whilst 10 represented a positive approach. The answers to this question were aligned with motivations to why that number was what it was and under what conditions the approach would be this or that number. If overlooking those explanations and simply calculating a mean out of the answers presented in chart 1, the result is close to 7. This indicates that the approach in general is slightly positive amongst the respondents.

Figure

Figure 1. Shows the spread of the respondent’s professions.

References

Related documents

In the contrary, the construction industry shows as expected a positive relation between growth opportunities and short-term debt over total assets and a negative relation to

Detailed recommendations were also provided. These emphasized focusing instead of diversifying the activities, maintenance of the basic science activities in addition

Accounting for the contracts that fall under the definition of short-term leases will be done off- balance sheet, like accounting for the operational leases is today (FASBb, 2011)..

Keywords: real estate industry, visualisation tools, technology acceptance, implementation pro- cess, diffusion of innovation, franchise organisation... Problem

For this research two groups of respondents were chosen - foreign investors from different countries and companies in Sweden involved in real estate transactions

The same thoughts could be applied to the real estate market, where Shiller argues that the real estate market is inefficient today due to personal biases, transparency problems,

12.4, 12.5 and 12.6 are important SDG’s as Sustainability Reporting promotes more sustainable businesses within the construction industry, which value chain includes heavy

Keywords: French Real Estate Investment Trusts, SIIC Performance, Economic Factors, Financial Behaviour and Multifactor Model.. Paper Type: Master Thesis in Finance