Higgins, D and Perera, T (2018) Advancing real estate decision making: Understanding known, unknown and unknowable risks. International Journal of Building Pathology and Adaptation, 36(4), pp. 373-384. ISSN 23984708
Abstract
Purpose: Whilst existing literature on real estate risk management focusses almost exclusively on holistic risk management techniques, documented increases in frequency and magnitude of unforeseen, rare and extreme events can throw up sudden, unexpected shocks that can challenge recognised real estate decision-making strategies. The paper aims to discuss this issue. Design/methodology/approach: To advance real estate decision-making practice in this area, this research paper takes the skilfully conceptualised downside risk framework presented by Diebold et al. (2010), being the known (K), the unknown (u) and the unknowable (U) risk categories, to provide a blueprint for effective real estate decision making in a changing global environment. Findings: In recording categories of risk, managing uncertainty can be achieved by an interrelated approach of adaption, robustness and resilience. This is important part of a real estate manager’s decision-making toolkit as risk recognition and knowledge of KuU event categories can augment an effective management strategy. Originality/value: The mastery of modern real estate risk management can be better served by understanding and managing extreme downside risk events. Creating a comprehensive risk management framework can enhance comparative real estate performance whereby unprepared competitors fail in a world increasingly affected by large, highly improbable and unpredictable events.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | extreme risk events; real estate performance; real estate risk management; risk management framework |
| Index terms: | methodology, decision-making, toolkit, research paper, manager, strategy, real estate, risk management, management strategy, extreme event |
| Subjects: | environmental hazards, decision analysis, management, software systems, research methods, real estate economics, practitioner, risk assessment, research dissemination and communication |
| Topics: | Business Strategy, Research Practice, Information Management, Engineering Principles, Risk Management, Roles and Professions, Sustainability, Urban Studies |
| Descriptive scope: | 3 PCT |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here