It's about time

DOIhttps://doi.org/10.1108/JPIF-06-2020-0064
Date21 July 2020
Pages25-30
Published date21 July 2020
AuthorLarry Wofford
Its about time
Larry Wofford
Department of Management and Marketing, University of Tulsa,
Tulsa, Oklahoma, USA
Abstract
Purpose Time is a critical element of commercial real estate (CRE) and has received only cursory attention.
This paper identifies and describes the interactions between time, change and CRE. It leads to important
implications and possible changes in professional practice, teaching and research.
Design/methodology/approach The research design involves identifying and synthesising research in a
disparate discipline into a coherent portrayal of time, change and CRE. Using the CRE environment as a
foundation, a more comprehensive, multi-disciplinary approach is developed to highlight the temporal issues
within CRE.
Findings The extreme levels of complexity, dynamism and uncertainty characterising current CRE
environments affect the interaction of time, change and CRE. In response, CRE has become increasingly
specialised in property types and time segments. The paper identifies four issues for CRE: the role of CRE as an
integrator of different layers of civilisation with different clock speeds, the need for a temporal mindset
recognising finite and infinite games, the need for temporal ambidexterityand the use of strategic foresight and
scenarios. The very definition of CRE as an industry is questioned.
Research limitations/implications Need for essential empirical work as well as additional work for
implications.
Practical implications CRE faces disruption from many sources, and this paper considers how to
incorporate time and change into analysis of the CRE market environment. It identifies specific ways CRE can
understand and avoid disruption. Further, areas of teaching and research are highlighted.
Social implications Real estate assets are substantial, long-lived assets with important consequences for
society. This paper advances the analysis of such assets.
Originality/value Areas of concentration in CRE and academia needing attention are identified. The areas
have generally not been considered prior to this paper.
Keywords Strategy, Time, Sustainability, Investment, Change
Paper type Viewpoint
Introduction
I started as an assistant professor of finance and real estate many years ago in a galaxy far,
far away or so it seems. As the years have passed, Ive observed that time, change and
commercial real estate (CRE) are intertwined in interesting ways, some well recognised and
others less so. The long life cycles of CRE assets and the resulting exposure to significant
economic, infrastructure, social, legal and cultural change are well recognised. Also well
recognised is the centrality of time to CRE asset value and risk as was noted by Graaskamp
(1981), when he posited that CREs function is to convert space over time into money over time
and thus create a valuable investment. Of course, the value of an equity interest in a CRE
asset is the present value of the money (cash flow going to the equity investor) over the
relevant time period and those cash flows are subject to risk from changes internal and
external to the asset. While these aspects of space, time and change interactions are well
recognised, others are more subtle and less well recognised.
However, now there are factors that make an examination of the CRE spacetimechange
interaction not only interesting but also necessary. First, the speed of change per unit of time
continues to increase. Second, the boundaries and very notion of CRE as an industry are being
challenged by disruptive ideas originated by individuals and organisations not in traditional
CRE. For example, Airbnb is causing significant change in the hotel/motel sector. WeWork
has created significant change in the office sector, while Amazon is creating a change in retail
CRE. Third, accumulated changes over time have added to the complexity of CRE and have
Its about time
25
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1463-578X.htm
Received 7 June 2020
Revised 13 June 2020
Accepted 13 June 2020
Journal of Property Investment &
Finance
Vol. 39 No. 1, 2021
pp. 25-30
© Emerald Publishing Limited
1463-578X
DOI 10.1108/JPIF-06-2020-0064

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