Paper: arXiv 2601.22166

Authors: Roberto Garrone

Abstract

A growing share of the existing real estate stock exhibits persistent underperformance that can no longer be explained by cyclical market phases or inadequate maintenance alone. In many cases, technically recoverable assets located in non-marginal contexts fail to generate economic value consistent with the capital immobilized. This condition reflects a structural misalignment between intended use and effective demand rather than episodic market weakness, and calls for a decision framework capable of integrating value, risk, complexity, and irreversibility in strategic use selection. This study proposes a decision-analytic framework for the ex-ante selection of intended use in real estate redevelopment processes. The framework integrates real-options logic on irreversibility and managerial flexibility with a multi-criteria decision-analysis structure, enabling comparative evaluation of expected economic value, market and operational risk, technical and managerial complexity, and time-to-income. By treating redevelopment primarily as a problem of strategic option selection rather than design or financial optimization, the framework operationalizes option value preservation through disciplined ex-ante screening. Illustrative cases demonstrate how this integration of real options reasoning and MCDA reduces over-complexification and misalignment across different asset types and urban contexts.

Complexity vs Empirical Score

  • Math Complexity: 3.5/10
  • Empirical Rigor: 3.0/10
  • Quadrant: Philosophers — conceptual discussion, limited math and data

Why this score: The paper presents a conceptual decision-support framework integrating real options logic and Multi-Criteria Decision Analysis (MCDA) for early-stage real estate redevelopment. While clearly written and logically sound, it relies primarily on illustrative case discussions rather than rigorous quantitative modeling, mathematical proofs, or empirical backtesting.

Research Flowchart

  flowchart TD
    A[Research Goal: Ex-Ante Redevelopment Use Selection] --> B[Input Data: Value, Risk, Complexity & Time Metrics]
    B --> C[Framework Integration: Real Options + MCDA Logic]
    C --> D[Multi-Criteria Screening & Option Evaluation]
    D --> E[Illustrative Case Studies Analysis]
    E --> F[Outcome: Reduced Complexity & Improved Strategic Alignment]

Cited References (18)

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and 10 more
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  3. Urban Land Prices under Uncertainty (1985)
  4. Investment Under Uncertainty (1971) — link
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0 of 18 cited works are in the corpus; resolved via arXiv source bundles, Semantic Scholar and OpenAlex. Corpus-wide: 2518 linked papers.