Student Case Competition

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Congratulations to the REH team from the University of Guelph which won Ryerson’s EYE Competition: Hillary Hetherington, Conrad Hilgendag, Stefanie Kaminski and Sasha Somjen.

Case competitions are something new since I was an undergraduate student.  The team was given an address and a week to put together a proposal about the highest and best use.  In this case, the “Stone Group” proposed that 20 Valleywood Drive in Markham be redeveloped into a six-storey mixed use office complex.

(Source: The Stone Group)

Case competitions are nerve-racking because Continue reading

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Industrial Properties are Interesting

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Last Friday, the REHSA and Jeff Miller of Oxford Properties organized a tour though Milton, Mississauga and area showing off what is special about industrial properties.  This property type attracts less attention than residential or office, which is either a mistake or an opportunity for somebody.

(Source: REHSA)

For example, did you know that the GTA is Continue reading

Facts matter: Communication

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Previous posts have explained why it is silly to look to facts as if one of them was a magic bullet which would reveal the Truth. The facts matter but in combination. This post notes that, sometimes, even properly-weighted facts may not be enough.

For example, people have been debating whether or not there is a price bubble in Canadian residential real estate for nearly a decade. To a true believer on either side, the fact that the price is “high” is no longer important, either because it is added proof that prices will crash in the very near future or because it reveals some previously-unconsidered explanation.  As a researcher, I can say that it is hard for experts to identify bubbles in advance.

Weights matter when interpreting facts because debating the correct weights opens a new dimension to the discussion.  When arguing with somebody who attaches radically different weights to facts than you do, having the important facts may not be enough to convince somebody.  Communicating effectively, not just analysing correctly, turns facts into wisdom and action.

Continue reading

Facts matter: Conflicting messages

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Facts matter but a collection of facts rarely tells a simple story.  It is not as though any one analyst can look at the Toronto residential market and say that “the price bubble that will end on Thursday and will be followed by 3 years of decline”. Previous posts have noted that the not all data sources are equally important nor are they perfectly precise.  Both of these reasons explain why good analysts attach weights to facts to measure their importance.

Thinking about the weight which should be attached to each fact helps when making decisions because there will be evidence both for and against a decision.  Regardless of what the decision is.   Continue reading

Facts Matter: Confidence in a conclusion

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Good decisions in the real estate industry are based on facts.  Facts come from many sources (such as government, consultants, proprietary, …) but not all facts are equally important.  Some facts would have a big effect if they changed while a change in other types of facts have little to no effect.  This posting notes that some facts are unimportant because, even if they were to change, it is not clear whether the change is real or random.  Randomness introduces another reason to attach weights to facts.

In part, the importance of a fact depends on how much you can rely on it.  Facts as numbers are more reliable since (mostly) they are governed by the rules of statistics.  Facts as words are more slippery since the reliability of the fact depends on who is saying it and on whether the words can mislead.  Weighting facts is a way to recognize these considerations.  Continue reading

Some facts should be given more weight

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One of the messy facts of life about facts (bad pun intended) is that they are hard to work with.   There are many reasons why facts do not reveal everything you want to know about consumer tastes, price trends and anything else that success in business depends on.  These problems will not shrink in the future as Big Data takes hold and as smart buildings throw out so much information in real time.

Fortunately, a simple idea shows how to deal with much of the messiness.  All facts matter but not all facts are equally important: different sources of facts imply different weights for a fact.  I will focus on facts as numbers since, except for the added slipperiness of facts as words, as conversations, as rumours and as written reports, the same concepts applies.

Several different perspectives reveal why attaching weights to facts reduces the confusion.  In a series of posts, I will talk about weighting and context, weighting and precision of data, weighting and trade off and weighting and communication.  Here is the first: Continue reading

Teachable moments: Learning Ethics

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Ethical awareness affects people involved in the real estate industry.  There is a lot of money at stake and, because investors are separated from their real estate by distance or expertise or uncertainty, lots of exciting operational challenges.  Research has shown that these same features also create opportunities to mislead or to be misled.  So, operations and ethics in the real estate business cannot be separated.

Being ethically aware is a good thing.  Many industry associations have codes of conduct or courses which include an ethical dimension.  Unfortunately, it is hard to teach a 20 year old how to be ethically aware, especially if the “good answer” seems obvious in a two-hour test.  60 year olds have more life experience and know that distinguishing “good” and “evil” is not so simple.

So, the discussions about potentially unethical behaviour by the next president of the United States represent a teachable moment about an important topic. Continue reading

What is new about Commercial Real Estate in Canada, and what is old?

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Last week, I attended an interesting breakfast meeting which launched a new book.  If you are new to the commercial real estate business, I encourage you to read it: it is published by REALpac and is an updated version of their most popular publication.  This comprehensive resource will be useful as you discover your position within the industry.  (Full disclosure: I will not get a commission for saying such nice things.)

As with most meetings, the most stimulating part is not what was listed on the official program but what happened during the conversations.  I was fascinated by a conversation on literacy and the challenges it poses for everybody.  Continue reading

Negotiation Skills

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The real estate business is interesting because illiquidity means that the messy bits of the market process are messy for reasons not usually explored in textbooks.  Thus, there is a lot to learn.  (One of these days, I will be allowed to teach a course on Negotiations, but not this year.)  I receive mailings from a group that specializes in it and, at the end of last year, they sent me some interesting messages on what happened last year.  Here is some help with your negotiations this year. Continue reading

Curiosity and real estate

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The start of a new year is a time of new beginnings.  2017 will be an interesting year, even if we do not yet know why.  With that in mind, I encourage you to make a resolution to be more curious.

Two items in particular attracted my curiosity during this Break and I encourage you to check them out. Continue reading