Obstacles to comprehensive real estate asset management

Abstract

Purpose Motivated by behavioral theories of the firm, this study aims to consider the extent to which knowledge gaps, organizational inertia and conflicts of interest prevent large real estate investment management firms from approaching asset management in a comprehensive manner. Design/methodology/approach Results of 93 semi-structured interviews conducted with real estate practitioners working in the USA are thematically analyzed. Findings All of the aforementioned factors are found to influence real estate asset management practices and serve as potential obstacles to operational excellence. Research limitations/implications The qualitative analysis is limited in the sense that it focuses exclusively on the perceptions of real estate practitioners in the USA who work for relatively large organizations. However, it offers compelling evidence that comprehensive asset management is difficult under the best of circumstances, and becomes even more so in the presence of knowledge gaps, organizational inertia and conflicts of interest. Practical implications Those working in asset management or with asset managers must be mindful of the obstacles discussed if they hope to encourage and facilitate process improvement. Originality/value The study contributes to a small but growing, body of research examining the challenges large real estate investment management firms face when trying to derive value from their asset management platforms.

Blighted properties:

“…Campbell et al (2015) define asset management as a nine-stage process that includes asset strategy, planning, evaluation, design, acquisition, operation, maintenance, modification and disposal. According to Read (2017), asset management also involves ten interrelated functions which are aimed at improving the financial performance of income properties. These activities include acquisition support, business planning, team management, budget preparation, approval of lease/capital expenditures, promotion of operational efficiency, market research, financial analysis, disposition support and reporting/monitoring.…”