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The office market: A lemon market? A study of the Malmö CBD office market
Department of Real Estate Science, Urban Studies, Malmö University, Malmö, Sweden.
2015 (English)In: Journal of Property Investment & Finance, ISSN 1463-578X, E-ISSN 1470-2002, Vol. 33, no 2, 140-155 p.Article in journal (Refereed) Published
Abstract [en]

Purpose – The purpose of this paper is to test whether bad real estate owners drive out good real estate owners from the online marketplace for offices. Design/methodology/approach – This research is based on a statistical analysis of the advertisement of offices in Malmö CBD, collected weekly during a period of one year. Findings – The hypothesis that the market for advertisement of office properties is a lemons market cannot be rejected. The result that owners who have appeared in court more than once in the last two years being more inclined to advertise supports this. Research limitations/implications – The research in this paper is limited to the Malmö CBD office market. Practical implications – It provides an insight in how the online marketplace for offices works as a marketplace and how quality signals influences advertisement. Originality/value – This paper is a direct test of Akerlof’s classical lemon model.

Place, publisher, year, edition, pages
2015. Vol. 33, no 2, 140-155 p.
National Category
Economics and Business
Identifiers
URN: urn:nbn:se:kth:diva-174059DOI: 10.1108/JPIF-12-2014-0073Scopus ID: 2-s2.0-84923276922OAI: oai:DiVA.org:kth-174059DiVA: diva2:857416
Note

QC 20150929

Available from: 2015-09-29 Created: 2015-09-29 Last updated: 2017-12-01Bibliographically approved
In thesis
1. Challenges of Commercial Real Estate Management: An analysis of the Swedish commercial real estate industry
Open this publication in new window or tab >>Challenges of Commercial Real Estate Management: An analysis of the Swedish commercial real estate industry
2015 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This dissertation consists of five papers with specific objectives. The overall objective is, however, to seek a deeper understanding of the challenges of real estate management in the commercial real estate sector.

The purpose of the first two papers is to provide a mapping of the industry and a better knowledge of the main organizational strategies of the companies and their view of customer relations. The third paper looks at the possibility that the online office market is a so-called lemons market, where primarily "bad" objects are marketed. The last two papers compares companies that outsource property management and companies that has property management in house. The first of the two (paper IV) address the question of incentives for effort and the second (paper V) address information for decision-making, both however consider how the real estate owner has created incentives and regulations to ensure that they are informed.

From the first paper we learn that the commercial real estate industry in Sweden already before 2004 had made a shift from a product focus towards a customer/service focus. However we could not see an increased customer focus in the annual reports during the years 2004-2008. Paper II also conclude that regardless of organisational form of management, inhouse or outsourced, the executives state that the chosen form I to be able to deliver best service to the customer.

In paper III a test of the online marketplace for offices in Malmö CBD was conducted to investigate if the market is a lemon market or not. Management form was one of the quality signals together with scale, existence of a local office and if the company has been involved in cases in the special court for rents (Hyresnämnden). The conclusion was that lemons hypothesis could not be rejected.

The conclusions from paper IV and V pinpoints the occurrence of differences in how to build incentives for the real estate management organisation, if it is organised in-house or outsourced. As the management teams in the outsourced setting primarily is governed by the contract between the real estate owning company, and the service providing company, and there it is decided when and how they are to deliver in terms of service and information. The real estate management teams in the in-house setting instead act under a large freedom with responsibilities governing the outcome of their services and not any checklists or jobdescriptions. Regardless of how the management teams are governed they do not have monetary incentives tied to their individual performance.

Place, publisher, year, edition, pages
Stockholm: KTH Royal Institute of Technology, 2015. 52 p.
Series
TRITA-FOB, 2015:7
Keyword
Real estate management, Quality in real estate management, Incentives for effort, information sharing, Organisational structure, Customer focus
National Category
Economics and Business
Identifiers
urn:nbn:se:kth:diva-174063 (URN)978-91-85783-53-3 (ISBN)
Public defence
2015-10-20, Sal F3, Lindstedtsvägen 26, KTH, Stockholm, 13:00 (English)
Opponent
Supervisors
Note

QC 20150929

Available from: 2015-09-29 Created: 2015-09-29 Last updated: 2015-10-14Bibliographically approved

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