Institutional model of commercial real estate market
https://doi.org/10.21285/2227-2917-2024-2-244-257
EDN: UGBJMD
Abstract
The study considers institutions of the commercial real estate market with the aim to develop a descriptive institutional model. Institutional boundaries of the commercial real estate market are outlined. Time limits are determined by the equalization of supply and demand through the dynamics of rental rates. Geographical limits, despite the local character of the market, are determined by the participation of the largest developers. Commodity boundaries form the intended purpose of commercial real estate related to its use by lessees for business. This allows the interconnection of commercial real estate institutions to be considered from the perspective of value creation. By means of land relations, the initial conditions are determined by the institution of the state, which also establishes registration requirements. The developer connects the land supply with the rental market by developing a concept of the object, thus influencing related industries (developers, producers of construction materials). The institution of commercial real estate management ensures the interests of the developer. The composition of its participants is diverse, allowing the investor’s offer to be communicated to potential tenants as a value. The institute of accompanying participants of the commercial real estate market is mainly involved in information exchange between its other subjects; however, this institute is responsible for making the constituent links of the market sustainable. The lessee forms the final product using the value created by the developer (lessor) in the form of the intended purpose and individual properties of the object. Rental rates affect the profitability of commercial real estate, thereby determining the developer’s demand for capital. The results obtained can be used by both developers and researchers. The conclusion is made about the limited institutional role of the investor due to irrational capital raising and transferring these costs to the lessee. The reasons lie both in the strategies of most developers and in the desire to reduce risks through the preferred use of debt capital.
About the Authors
E. N. Burdenyuk
Novosibirsk State University of Economics and Management
Russian Federation
Russian Federation
Evgeniy N. Burdenyuk, Postgraduate Student
56, Kamenskaya St., Novosibirsk, 630099
A. B. Kogan
Novosibirsk State University of Economics and Management
Russian Federation
Russian Federation
Anton B. Kogan, Dr. Sci. (Econ.), Professor of the Department of Business Economics and Logistics
56, Kamenskaya St., Novosibirsk, 630099
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Review
For citations:
Burdenyuk E.N., Kogan A.B. Institutional model of commercial real estate market. Izvestiya vuzov. Investitsii. Stroitelstvo. Nedvizhimost. 2024;14(2):244-257. (In Russ.) https://doi.org/10.21285/2227-2917-2024-2-244-257. EDN: UGBJMD
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