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The determination of occupancy costs during early project phases


  • Christian Stoy
  • Wolfdietrich Kalusche


In addition to the earnings, costs determine the commercial success of real estate investments. The discussion in the German-speaking region focuses on occupancy costs and their planning. When planning, the occupancy costs must be determined early, continually monitored, and controlled if necessary. A process for determining occupancy costs, the construction element process, is presented and tested using an actual property. The test results deviate by only approximately 8% from the occupancy costs actually incurred. The process demonstrates its suitability for the early determination of occupancy costs using only a few pieces of data on the property. However, it does require occupancy cost indicators. Also, the significant drivers of these indictors must be known in order to select the appropriate indicator. For this reason, future work on occupancy costs must not only collect additional data, but the data must also be analysed with regard to the cost drivers.

Suggested Citation

  • Christian Stoy & Wolfdietrich Kalusche, 2006. "The determination of occupancy costs during early project phases," Construction Management and Economics, Taylor & Francis Journals, vol. 24(9), pages 933-944.
  • Handle: RePEc:taf:conmgt:v:24:y:2006:i:9:p:933-944 DOI: 10.1080/01446190600799307

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    References listed on IDEAS

    1. Philip M. Lurie & Matthew S. Goldberg, 1998. "An Approximate Method for Sampling Correlated Random Variables from Partially-Specified Distributions," Management Science, INFORMS, vol. 44(2), pages 203-218, February.
    2. Malik Ranasinghe, 2000. "Impact of correlation and induced correlation on the estimation of project cost of buildings," Construction Management and Economics, Taylor & Francis Journals, vol. 18(4), pages 395-406.
    3. Robert T. Clemen & Terence Reilly, 1999. "Correlations and Copulas for Decision and Risk Analysis," Management Science, INFORMS, vol. 45(2), pages 208-224, February.
    4. David Wall, 1997. "Distributions and correlations in Monte Carlo simulation," Construction Management and Economics, Taylor & Francis Journals, vol. 15(3), pages 241-258.
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