INCANS Risk INSIGHT
INCANS Risk Insight Publication: Breaking Out Of The Frame
How often have you described an asset as “prime” because it sits in London’s West End? Or “opportunistic” because of an emerging asset class? Such labels are a form of “information framing” and it is natural human behaviour. The way choices are presented can influence our thought processes and ultimately our decisions. This can play out badly in many situations. In commercial real estate, there is plenty of evidence that shows how often investment decision-making processes are fundamentally flawed because of how we label and use much of the information and data available to us.
Today, a real estate fund manager can walk through the door and describe the perceived risk profile of an asset or fund with one word: “prime”, or “core”. In contrast the risk profile of a bond fund would be determined by risk & return metrics not simply the opinion of the fund manager. What is needed in real estate investment markets is a structural rethink of how investors can assess an opportunity, using quantitative data rather than subjective labels based on postcode or use class, created by the long line of investors and agents who came before. With the tools available today, this is certainly possible.
Read the full article HERE.
INCANS Risk Insight Publication Issue 8: Banking Crisis
Implications & Strategies For Commercial Real Estate
INCANS Risk INSIGHT publication issue 7: A square peg in a round hole
Why company credit reports fail to show the whole picture when assessing income risk in commercial real estate.
INCANS Risk Insight Publication: The Power of Data
What lessons has the real estate industry learnt, 15 years on from the Credit Crunch?
INCANS Risk Insight Publication: Unlocking Real Estate’s Data Potential
In this quarter’s INCANS Risk Insight, the overall theme is how data will be crucial for allowing us in real estate to make better informed decisions.
INCANS Risk Insight Publication: Capital Values Exit the Building, Analysis of Income Enters
For decades there have been calls for a re-think on CRE valuations. Now with the perfect storm of a data revolution, shorter leases, more operating expenses, ESG and Covid, this is the time the property valuation community could finally accept that analysis of the income is more important than capital values.
INCANS Risk Insight Publication: How Well Do You Know Your Tenant’s Income Risk?
2021 will see commercial real estate tenants will pay rent of more than US$1,400bn. In a low capital growth market commercial real estate becomes a fixed income style investment with a floating capital opportunity attached. But, in the current pandemic, it’s important to understand the occupier, their business environment, along with specific requirements.
INCANS Risk Insight Publication: Quantifying the Risk of Tenant Failure
The growing popularity of commercial real estate as an investment is hardly surprising given the prevailing central bank policy of a zero-interest rate environment. Under such conditions government and corporate bond yields no longer deliver the required returns so investors have been forced to look elsewhere for a stable and recurring revenue stream.