Abstract: Modelling the Value Adding Attributes of Real Estate to the Wealth Maximization of the Firm

Volume 28, Number 4, 2006 of the Journal of Real Estate Research

Modelling the Value Adding Attributes of Real Estate to the Wealth Maximization of the Firm

Anna-Liisa Lindholm Helsinki University of Technology Institute of Real Estate Studies P.O. Box 1200 FI-02015 HUT, Finland Email: anna-liisa.lindholm@tkk.fi	Karen M. Gibler Georgia State University Department of Real Estate P.O. Box 4020 Atlanta, GA 30302-4020 Email: kgibler@gsu.edu
Kari I. Levainen Helsinki University of Technology Institute of Real Estate Studies P.O. Box 1200 FI-02015 HUT, Finland Email: kari.levainen@tkk.fi

Abstract: Firms develop strategies to help them achieve their primary goal of maximizing the wealth of the shareholders. These strategies should define the supporting role corporate real estate management plays; however current theory and practice do not adequately identify the direct and indirect methods by which corporate real estate management (CREM) adds value to the firm. We develop a model of how real estate adds value to the firm to help fill this void. This model can be then used to develop more precise and complete metrics to measure the value real estate adds to the firm.