IDEAS home Printed from https://ideas.repec.org/a/gam/jijfss/v6y2018i1p7-d125274.html
   My bibliography  Save this article

Real Estate Risk Analysis: The Case of Caserma Garibaldi in Milan

Author

Listed:
  • Leopoldo Sdino

    (Department of Building Environment Science and Technology, Polytechnic of Milan, 20133 Milan, Italy)

  • Paolo Rosasco

    (Department of Architecture and Design, University of Genoa, 16137 Genoa, Italy)

  • Sara Magoni

    (Department of Building Environment Science and Technology, Polytechnic of Milan, 20133 Milan, Italy)

Abstract

The global economic crisis and deep financialization processes recently suffered by the real estate market have exposed the latter to further and greater risks. Against this, the importance of real estate risk management has noticeably grown within the dynamics of both markets, real estate and finance. Therefore, the aim of this paper is to develop a comprehensive tool for the risk rating that will consider both the systematic and idiosyncratic risks possibly incurred during a real estate operation, in order to deliver their actual magnitude. It will be composed of 33 criteria whose weights are determined through the application of an analytic hierarchic process on a panel of market operators. This tool is primarily addressed to investors since it allows making strategic decisions while being supported by an analytical procedure that also ensures transparency of the conduct for the rating. An application of the presented tool within the decision-making procedure of the re-functionalization of a former barracks in Milan’s city center is then described; this case study will also constitute an opportunity to highlight the strong relationship that occurs between the profitability of an operation and the risk incurred.

Suggested Citation

  • Leopoldo Sdino & Paolo Rosasco & Sara Magoni, 2018. "Real Estate Risk Analysis: The Case of Caserma Garibaldi in Milan," IJFS, MDPI, vol. 6(1), pages 1-13, January.
    • Handle: RePEc:gam:jijfss:v:6:y:2018:i:1:p:7-:d:125274
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7072/6/1/7/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7072/6/1/7/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Steven C. Bourassa & Donald R. Haurin & Jessica L. Haurin & Martin Hoesli & Jian Sun, 2009. "House Price Changes and Idiosyncratic Risk: The Impact of Property Characteristics," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 37(2), pages 259-278, June.
    2. Jos Janssen & Bert Kruijt & Barrie Needham, 1994. "The Honeycomb Cycle in Real Estate," Journal of Real Estate Research, American Real Estate Society, vol. 9(2), pages 237-252.
    3. Shao, Adam W. & Hanewald, Katja & Sherris, Michael, 2015. "Reverse mortgage pricing and risk analysis allowing for idiosyncratic house price risk and longevity risk," Insurance: Mathematics and Economics, Elsevier, vol. 63(C), pages 76-90.
    4. Benedetto Manganelli, 2015. "Real Estate Investing," Springer Books, Springer, edition 127, number 978-3-319-06397-3, December.
    5. Michel Baroni & Fabrice Barthélémy & Mahdi Mokrane, 2008. "Un nouvel indice de risque immobilier pour le marché résidentiel parisien," Revue économique, Presses de Sciences-Po, vol. 59(1), pages 99-118.
    6. Ho, William, 2008. "Integrated analytic hierarchy process and its applications - A literature review," European Journal of Operational Research, Elsevier, vol. 186(1), pages 211-228, April.
    7. Liang Peng & Thomas G. Thibodeau, 2017. "Idiosyncratic Risk of House Prices: Evidence from 26 Million Home Sales," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 45(2), pages 340-375, April.
    8. Capozza, Dennis R & Schwann, Gregory M, 1990. "The Value of Risk in Real Estate Markets," The Journal of Real Estate Finance and Economics, Springer, vol. 3(2), pages 117-140, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zouheir Mighri & Raouf Jaziri, 2023. "Long-Memory, Asymmetry and Fat-Tailed GARCH Models in Value-at-Risk Estimation: Empirical Evidence from the Global Real Estate Markets," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 21(1), pages 41-97, March.
    2. Ewelina Badura, 2020. "Investing in Real Estate - Legal Risks," MIC 2020: The 20th Management International Conference,, University of Primorska Press.
    3. José María Codosero Rodas & José Cabezas Fernández & José Manuel Naranjo Gómez & Rui Alexandre Castanho, 2019. "Risk Premium Assessment for the Sustainable Valuation of Urban Development Land: Evidence from Spain," Sustainability, MDPI, vol. 11(15), pages 1-21, August.
    4. Anelli, Debora & Tajani, Francesco, 2023. "Spatial decision support systems for effective ex-ante risk evaluation: An innovative model for improving the real estate redevelopment processes," Land Use Policy, Elsevier, vol. 128(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ewelina Badura, 2020. "Investing in Real Estate - Legal Risks," MIC 2020: The 20th Management International Conference,, University of Primorska Press.
    2. Ying-Hui Chiang & Yuan Ku & Feng Liu & Chin-Oh Chang, 2019. "House Price Dispersion in Taipei Residential Communities," International Real Estate Review, Global Social Science Institute, vol. 22(1), pages 109-129.
    3. Lydia Cheung & Jaqueson K. Galimberti & Philip Vermeulen, 2023. "Evidence on the Determinants and Variation of Idiosyncratic Risk in Housing Markets," Working Papers in Economics 23/13, University of Canterbury, Department of Economics and Finance.
    4. Li, Yan-Lai & Tang, Jia-Fu & Chin, Kwai-Sang & Jiang, Yu-Shi & Han, Yi & Pu, Yun, 2011. "Estimating the final priority ratings of engineering characteristics in mature-period product improvement by MDBA and AHP," International Journal of Production Economics, Elsevier, vol. 131(2), pages 575-586, June.
    5. Thomas L. Saaty, 2013. "The Modern Science of Multicriteria Decision Making and Its Practical Applications: The AHP/ANP Approach," Operations Research, INFORMS, vol. 61(5), pages 1101-1118, October.
    6. Juan Cabello Eras & Dayli Covas Varela & Gilberto Hernández Pérez & Alexis Sagastume Gutiérrez & Dunia García Lorenzo & Carlo Vandecasteele & Luc Hens, 2014. "Comparative study of the urban quality of life in Cuban first-level cities from an objective dimension," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 16(1), pages 195-215, February.
    7. Madjid Tavana & Mariya Sodenkamp & Leena Suhl, 2010. "A soft multi-criteria decision analysis model with application to the European Union enlargement," Annals of Operations Research, Springer, vol. 181(1), pages 393-421, December.
    8. Michael Sherris, 2021. "On Sustainable Aged Care Financing in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 54(2), pages 275-284, June.
    9. Marcel Fischer & Natalia Khorunzhina, 2019. "Housing Decision With Divorce Risk," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 60(3), pages 1263-1290, August.
    10. Villacreses, Geovanna & Gaona, Gabriel & Martínez-Gómez, Javier & Jijón, Diego Juan, 2017. "Wind farms suitability location using geographical information system (GIS), based on multi-criteria decision making (MCDM) methods: The case of continental Ecuador," Renewable Energy, Elsevier, vol. 109(C), pages 275-286.
    11. Kadir Diler Alemdar & Ahmet Tortum & Ömer Kaya & Ahmet Atalay, 2021. "Interdisciplinary Evaluation of Intersection Performances—A Microsimulation-Based MCDA," Sustainability, MDPI, vol. 13(4), pages 1-17, February.
    12. Tirthatanmoy Das & Kabir Dasgupta, 2018. "Evaluating the Impact of Mothers' Self-esteem on Early Childhood Home Environment: Evidence from NLSY," Working Papers 2018-03 JEL Classificatio, Auckland University of Technology, Department of Economics, revised Oct 2019.
    13. Liang Peng & Lei Zhang, 2021. "House Prices and Systematic Risk: Evidence from Microdata," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 49(4), pages 1069-1092, December.
    14. M Tavana & M A Sodenkamp, 2010. "A fuzzy multi-criteria decision analysis model for advanced technology assessment at Kennedy Space Center," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 61(10), pages 1459-1470, October.
    15. Pedro Jose Gudiel Pineda & Chao-Che Hsu & James J. H. Liou & Huai-Wei Lo, 2018. "A Hybrid Model for Aircraft Type Determination Following Flight Cancellation," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 17(04), pages 1147-1172, July.
    16. Gaetano Lisi, 2013. "Can the Mortensen-Pissarides Model Match the Housing Market Facts?," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 56(2), pages 78-92.
    17. Liang Peng, 2020. "Benchmarking Local Commercial Real Estate Returns: Statistics Meets Economics," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 48(4), pages 1004-1029, December.
    18. Sepehr Ghazinoory & Mansoureh Abdi & Mandana Azadegan-Mehr, 2010. "Swot Methodology: A State-of-the-Art Review for the Past, A Framework for the Future," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 12(1), pages 24-48, November.
    19. Blake, David & Cairns, Andrew J.G., 2021. "Longevity risk and capital markets: The 2019-20 update," Insurance: Mathematics and Economics, Elsevier, vol. 99(C), pages 395-439.
    20. J Aznar & J Ferrís-Oñate & F Guijarro, 2010. "An ANP framework for property pricing combining quantitative and qualitative attributes," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 61(5), pages 740-755, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jijfss:v:6:y:2018:i:1:p:7-:d:125274. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.