New boundaries: conceptual framework for the analysis of commercial real estate in smart cities

Lecomte, P. (2019) New boundaries: conceptual framework for the analysis of commercial real estate in smart cities. Journal of Property Investment and Finance, 37 (1). pp. 118-135. ISSN 1463-578X doi: 10.1108/JPIF-10-2018-0083

Abstract/Summary

This paper fills in a gap in the real estate academic literature by defining the essence of real estate in smart urban environments. Space has traditionally been a silent component of real estate. Smart technologies are turning space into an active part of real estate, which represents a paradigm shift for commercial real estate. This shift is so drastic that it requires new concepts and tools to understand, analyse, model and value real estate in smart cities. After reviewing the impact of smart cities and smart buildings on commercial real estate, the paper defines the notions of smart space and smart real estate. A series of innovative concepts and tools are formulated, starting with a model of space users in smart cities, called the Cyber-Dasein inspired by Heidegger’s existential phenomenology of space. The paper then analyses smart space’s attributes and proposes several metrics for commercial real estate in smart environments, including a digital occupancy ratio, a future proofing indicator and a smart readiness ratio. After introducing three regression models for constructing a price index of smart real estate, the paper concludes by advocating that commercial real estate take an active role in the current debate about smart cities.