The life cycle of real estate as an economic object. The life cycle of a real estate object The life cycle of an enterprise as a special real estate object

Real estate life cycle (Yanioglo)

Some academic economists believe that real estate as a commodity is a kind of "living organism", which develops, as you know, in the following order: design - birth - maturity - aging and death. By analogy, the following stages of the life cycle of a real estate object are distinguished: pre-investment (initial) stage of the project (concept, planning, design, etc.), the stage of project implementation (construction, installation of equipment), the stage of operation of the object (phase of bringing to market, growth, maturity, saturation) and the stage of elimination (decline). Using the life cycle theory, it is possible to partially predict the situation, but not in the case of drawing up a forecast model, since in this case the enterprise may lose marketing support.

The life cycle of the real estate market

The rule: “buy cheaper, sell more” applies to real estate as well as any other type of investment.

Different market segments behave differently at the same time. For example, construction in one part of a city can grow rapidly in value, while at the same time there is stagnation in another part of the city. However, the ability to define these cycles can provide additional investment opportunities for the customer.

A. Decline cycle. It is observed when the market is oversaturated, and the number of unoccupied buildings begins to increase. The maintenance of unoccupied buildings negatively affects the financial condition of the project. This market is a buyer's market. The property owner requires an intense marketing and sourcing effort financial support... A small number of new properties appear on the market. Lenders are practically putting their operations on hold until the rebound, and property prices are dropping.

B. Cycle of absorption. Due to the lack of new construction, which is the result of the downturn cycle, supply and demand in the real estate market is starting to gain strength. The market enters a new cycle - the cycle of absorption of the created object. After the investment surplus is absorbed, rental rates will start to rise. In accordance with an increase in demand and a decrease in supply, pre-investment studies for the creation of new real estate objects are started.

B. New construction cycle... The new construction cycle is matched by the increased demand on the construction market along with a reduction in offers for free land... Rental rates increase with the price of the property. During this period, inflation rises and construction costs rise, which increases the selling price of the property.

D. Market Saturation Cycle... Real estate sales are growing at a slow pace and eventually declining. There is a surplus of finished construction products and capacities. Employment rates are starting to decline and construction activities are gradually stopping. The best time to expand properties is during the takeover cycle or new build period.

To assess the efficiency of the real estate market, it is necessary to consider in more detail the life cycle of an object and to establish the main critical points in time, the combinations of which will affect the duration of the cycle and the dynamics of changes in costs and results.

The life cycle of a property

Evaluation of the effectiveness of the functioning of any real estate object (erected or renovated) implies its consideration throughout the entire life cycle. The life cycle of an object from the moment of the feasibility study to the moment of physical or mental aging can be divided into three periods:

1 Construction (pre-investment and investment phases);

2 Operation until the moment of full payback (entrepreneurial phase of the project);

3Operation with the subsequent development of results on investment (innovation, closure of the object).

The first period is largely determining the efficiency of the object functioning. This stage is especially difficult, it consists of numerous components, namely: analysis of the conditions for the implementation of the original concept, development of the concept of the project, assessment of its viability, selection and approval of the location of the facility, environmental justification, expertise, development of a feasibility study, obtaining a construction permit, creation temporary construction infrastructure, creation or renovation of the facility, its commissioning. The second period includes the development of capacities, operation of the facility with stable parameters of its design capacities. Considering the nature of the curve reflecting the change over time in the cost characteristics of the construction and operation of the facility. By determining the ratio of the various phases, it is possible to obtain the comparative efficiency of the periods of the life cycle of the property, to analyze the costs and results of the contractor and the customer.

At the third stage of the object's life cycle, the period of the subsequent operating time for investment begins. In theory, the third period can last quite a long time. The limitation of the feasibility of operating the facility is the additional costs of eliminating physical and moral deterioration.

The duration of the phases of the life cycle of real estate objects (public / private sectors):

Residential buildings - (Conceptual phase 1-4 / 0.5-2) (Contract phase and detailed design 1-3 / 0.5-4) (Construction 1-4 / 0.5-1.5)

Industrial facilities - (Conceptual phase 1-4 / 0.5-6) \u200b\u200b(Contract phase and detailed design 1-3 / 0.5-2.5) (Construction 1.5-2.5 / 0.5-2)

Commercial buildings - (Conceptual phase 0.5-3 / 1-10)) (Contract phase and detailed design 0.5-2 / 1-4) (Construction 0.5-1.5 / 0.5-2)

The duration of the project generally depends on the type of construction; considerable attention is paid to the conceptual phase of the project in order to obtain maximum efficiency from the invested funds in the future.

Factors of dynamics of the use value of real estate objects

Without exception, all material objects exist in time and space. Consequently, it is possible to adequately characterize any object only taking into account the spatio-temporal parameters in which it is located and the effects that have on it. It must also be borne in mind that although time and space are mandatory conditions the existence of real estate, but they cannot be considered equivalent categories: space (if we consider it not at the abstract-logical level, but in the concrete of natural-material characteristics with a finite quantitative dimension) itself changes in time. This is a direct consequence of human activity, as a result of which the natural space is consistently transformed with increasing intensity. One of the characteristic features inherent in existence in time (equally related to ongoing processes and to material objects) is cyclicality, that is, periodic renewability in time. At the same time, many cycles, different in their content, coexist, in a certain way related to each other, subordinate to each other. The initial cycles are natural cycles that have a direct or indirect effect on all the others, but they themselves are not subject to the same influence: a person can influence nature as actively as he wants in a variety of forms, but it is not in his power to cancel or change the change of seasons or day and night ...

Therefore, it is natural that human activity (including economic), which is always carried out in natural conditions, is influenced by these cycles, and sometimes is subject to them. This is most clearly manifested in agriculture and partially in construction, where the entire production process is "adjusted" to fluctuations in natural and climatic conditions, and the results of labor largely depend on these conditions.

At the same time, for the predominant number of specific types of activity, economic cycles are decisive. The very existence, content and dynamics of such cycles are determined by the internal laws of development economic system (natural cycles have only a corrective effect in the form of seasonal fluctuations in the conjuncture). Economic cycles are understood as periodic fluctuations in the intensity of the reproduction of economic goods (including the stages of production, exchange, distribution and consumption). The main characteristic of the economic cycle is the rate of economic growth.

TICKET 44 Construction restrictions in the development of urban space. ??????? (Baranova)

45. The process of reproduction in the field of real estate (Trukhina)

Reproduction is a continuous process of renewing fixed assets and preventing its premature wear. In real estate, this is construction. The essence of the concept of real estate management comes down to obtaining the greatest effect from managing the actions of people, project executors. FROM economic points of view, construction - the branch of material and technical production, in which fixed assets are created for production and non-production purposes: ready-to-use buildings, structures and their complexes. construction refers to the process of erecting or creating infrastructure facilities. The main stages of this process are land acquisition, design, approval of the project in the authorities, the actual process of erecting a building or structure, and putting the facility into operation. As a rule, work is carried out by a group of specialists from a construction or engineering company under the guidance of a project manager and supervised by technical supervision representatives and development engineers (design engineer or project architect).

Professionals who are involved in the development and implementation of construction projects must create effective mechanisms for planning, budgeting, workflow, timely delivery of building materials, logistics, workplace safety, etc. In addition, they need to consider the environmental impact of their work and create a minimum temporary inconvenience to the public during the construction phase of the facility.

Ticket 46. Phases investment project in the field of real estate. (Yanioglo)

Investment cycle - the period of time between the start of the investment and the moment the property is put into operation.

A project viability analysis is carried out prior to presenting the project to investors to determine if the project is worth the further time and money, as well as what are the sources of covering all costs and receiving normal profits.

There are 3 phases of the life cycle of an investment project, which themselves consist of stages and stages:

1.Pre-investment phase(feasibility study):

1.1 Pre-investment studies and preliminary project planning

· List of potential investors;

· Information about the project - goals, analysis of conditions, etc .;

1.2. Market opportunities: market analysis, price dynamics, supply and demand, etc .;

1.3 Material and labor resources:

· Material forms of production (quality, availability of resources);

· Determination of the need for labor resources;

1.4. Selection and approval of the location of the facility (analysis of the location, environment, final selection of the construction site);

1.5. Financial analysis and investment assessment (analysis of risk, costs, development of a financial plan);

1.6. Development of a market-technical plan for the implementation of the project (control over the implementation of the loan agreement).

2. Investment phase:

2.1. Stage of general planning, development of design and estimate documentation (development, coordination and approval of a feasibility study, obtaining a building permit);

2.2. Holding tenders and concluding contracts (drawing up an offer for a contract, a contract for work);

2.3. Stage of implementation and completion of the project (construction):

· Quality planning and management structure;

· Implementation and delivery of the object.

3.Entrepreneurial phase:

3.1. The work of the developer in the management of finished real estate (order and placement of equipment, furniture);

3.2. The owner's job in property management:

· Real estate management procedure;

· Maintenance of real estate;

3.4. Real estate management by the user (control over the use of premises, organizational and technical support, etc.).

The implementation of investment goals involves the formation of investment projects that provide investors and other project participants with the necessary information to make a decision on investment.

The concept of an investment project is interpreted in two ways:

1.as an activity (event), involving the implementation of a set of any actions that ensure the achievement of certain goals;

2. as a system that includes a certain set of organizational, legal and accounting and financial documents necessary for the implementation of any actions or describing these actions.

There are various classifications of investment projects. Depending on the characteristics underlying the classification, the following types of investment projects can be distinguished.

By attitude to each other:

· independent allowing simultaneous and separate implementation, and the characteristics of their implementation do not affect each other;

· mutually exclusive those. not allowing simultaneous implementation. In practice, these projects often fulfill the same function. Of the totality of alternative projects, only one can be implemented;

· complementary the implementation of which can only occur jointly.

By terms of implementation (creation and functioning):

· Short-term (up to 3 years);

· Medium-term (3-5 years);

· Long-term (over 5 years).

By scale (most often the scale of the project is determined by the size of the investment):

· small projects, the action of which is limited to the framework of one small company implementing the project. Basically, they represent plans to expand production and increase the range of products. They are distinguished by relatively short implementation times;

· medium projects- these are most often projects of reconstruction and technical re-equipment existing production products. They are implemented in stages, for individual industries, in strict accordance with pre-developed schedules for the receipt of all types of resources;

· major projects - projects of large enterprises, which are based on a progressively "new idea" of the production of products necessary to meet the demand in the domestic and foreign markets;

· megaprojectsare targeted investment programs containing many interconnected final projects. Such programs can be international, state and regional.

By main focus:

· commercial projects, the main purpose of which is to make a profit;

· social projectsfocused, for example, at solving the problems of unemployment in the region, reducing the crime rate, etc .;

· environmental projectswhich are based on improving the living environment;

· others

Depending on the degree of influence of the results of the investment project implementation on domestic or foreign markets for financial, material products and services, labor, as well as the environmental and social situation:

· global projectsthe implementation of which significantly affects the economic, social or environmental situation on Earth;

· national economic projects, the implementation of which significantly affects the economic, social or environmental situation in the country, and when assessing them, one can be limited to taking into account only this influence;

· large-scale projectsthe implementation of which significantly affects the economic, social or environmental situation in a particular country;

· local projectsthe implementation of which does not have a significant impact on the economic, social or environmental situation in certain regions and (or) cities, on the level and structure of prices in commodity markets.

A feature of the investment process is its conjugation with uncertainty, the degree of which can vary significantly, therefore, depending on the magnitude of the risk, investment projects are subdivided as follows:

· reliable projectscharacterized by a high probability of obtaining guaranteed results (for example, projects carried out on state order);

· risky projects, which are characterized by a high degree of uncertainty of both costs and results (for example, projects related to the creation of new industries and technologies).

In practice, this classification is not exhaustive and allows for further detailing.

However, the development of any investment project - from the initial idea to operation - can be presented as a cycle consisting of three phases: pre-investment, investment and operational (or production). The total duration of the three phases is the life cycle (life span) of the investment project.

The life cycle of a real estate object as a physical object is a sequence of processes of existence of a real estate object from conception to liquidation (disposal). It is customary to define the life cycle of material objects in the following order: design-birth-maturity-aging and death.

The stages of the life cycle of a real estate object are called differently: pre-design-design-construction-operation-closure.

The pre-project (initial) stage includes an analysis of the market for movable property, the choice of a real estate object, the formation of a project strategy, investment analysis, registration of initial permits, attraction of credit investment funds. 2. The design stage includes the development of a financial scheme, the organization of financing, the selection of an architectural and engineering group, and design management.

The main tasks of this period are to reduce the duration of these stages, to improve the consumer qualities of real estate objects and, most importantly, to minimize operating costs at all stages of the life cycle of a real estate object.

Obviously, in the first two stages, no profit is generated, since they are motivational. 3.

The construction stage consists in choosing a contractor, coordinating construction works and quality control of construction, cost estimates and costs. At this stage, real evidence of the compliance of the facility under construction with the requirements of the real estate market segment appears, due to the logic of the life cycle. At this stage, the tasks of increasing the share of investments of potential consumers are being solved, since the growth in the volume of offers and profits indicates a fairly wide market acceptance. 4.

The stage of operation of a real estate object involves the maintenance and repair of objects, and their reconstruction. Operation of real estate objects includes the following areas: operation and repair of equipment and premises, material accounting, fire protection and safety engineering, communications management, disposal and recycling of waste, changes and restructuring, elimination of emergencies and protection of the facility.

Reconstruction of real estate objects - radical reconstruction, alteration in order to improve the complex of organizational and technical measures aimed at eliminating the moral and physical deterioration of real estate objects in general or their individual elements and systems.

Maintenance - work performed to ensure the standard life of real estate objects; they do not lead to an increase in its value, but prevent deterioration and failure of individual elements. The purpose of the service is to ensure that the facility is used for its intended purpose.

Repair - restoration work of damage (deterioration of the object) of real estate to a normal operational state. The purpose of the renovation is restoration.

Repair work is divided into small and large. Minor repairs, which last 1-2 days, are carried out to ensure the normal operation of the property. It does not extend the life of the facility or increase its value. Major renovations (more than 2 days) extend the life of the property, but do not increase its value.

Replacement is the process of replacing fixed assets included in a property with a similar unit.

The subject of replacement is an independent object of fixed assets, which is used for unusable or obsolete components of fixed assets.

5. The stage of closing the object - the complete elimination of its original and acquired functions, the result is either demolition or a qualitatively new development. At this stage in the life cycle of the property, significant disposal costs are required. The costs arising from the ownership of the property. If the property receives a new qualitative development, the costs of the change are referred to the cost of ownership per new function.

Similarly, the life cycle of real estate objects can be divided into stages and the life cycle of a property complex. one.

Formation of the property complex (normative registration of the results of transactions with real estate objects and rights to them: purchase and sale, contribution to authorized capital, rent, leasing). 2.

Development of the property complex (new construction, acceptance on the balance sheet). 3.

The liquidation of a property complex is an auction and other mechanisms for the sale of property (including real estate) of a bankrupt organization in accordance with the regulatory legal provisions of bankruptcy proceedings.

The life cycle of real estate objects as property from the point of view of the owner repeats itself many times, with each new businessman, until the end of the economic or physical life of the property. Based on the trinity of categories of material (physical), legal (legal) and economic - the life cycle of a real estate object can be divided into three stages (Fig. 1.4). Each stage includes certain activities and actions of the owner.

The life cycle of a real estate object is subject to certain patterns and includes the period of economic and physical life (Fig. 1.5).

1. The term of economic life, which determines the period of time during which the object can be used as a source of profit. The economic life ends when the improvements made no longer contribute to the value of the property.

Investment and construction stage of development of real estate objects (investment concept, definition of the purpose of the object, its design, land acquisition, construction (reconstruction), commissioning). This stage is the most difficult, because it consists of numerous components, on the solution of which the efficiency of the functioning of the real estate object depends.

The turnover of rights to previously created real estate, including sale, lease, etc. At this stage, the return on investment, profit, as well as the beginning of moral and physical deterioration occur

Management of real estate objects (operation, repair, maintenance in the system of urban infrastructures and utilities). This stage is the longest and is limited by the expediency of the operation of the property and the amount of expenses for the elimination of physical and moral deterioration

Figure: 1.4. Stages of a real estate object

Figure: 1.5. Lifetime of a building or structure

Typical physical life is the period of actual existence of a property in a functionally fit condition prior to its demolition. Determined by regulatory documents The physical and economic life of real estate objects are objective in nature, which can be regulated, but cannot be canceled. 3.

Lifetime is a period of time when an object exists and you can live or work in it.

From the point of view of the period of life of the property, I single out such terms as: 1.

Effective age, reflecting the age of the object depending on the appearance, technical condition. 2.

4. Life cycle of real estate objects

Since real estate objects during their existence undergo economic, physical, legal changes, then any immovable thing (with the exception of land) goes through the following life cycle stages:

1) formation -this is a construction, i.e., the creation of a new enterprise, purchase or allocation of a land plot;

2) exploitation -includes operation and development, i.e. expansion, reorganization or reconstruction

3) termination of existence -it is demolition, natural destruction or elimination.

The life cycle of a property acquired for commercial purposes, from the point of view of the owner of this property, can be repeated with the new owner of the same property until the end of the life of the object. The life cycle constantly obeys certain laws, according to G. Harrison it is a physical, economic, chronological period and the remaining period of economic life.

The duration of the physical life of an object refers to the time when an existing building or structure can be lived or worked. This indicator can be normative, calculated, actual and increase due to improvement of conditions or due to modernization. If the immovable property is demolished, then the physical life expires.

The period of economic life refers to the period during which the object can be used, while receiving - while profit, these improvements contribute to the value of the object. If the improvements made do not make a certain contribution to the value of the property due to the fact that it is outdated, then its economic life ends there.

The chronological age is understood as the period from the date the property was put into operation until the date of its appraisal.

The effective age is based on the assessment of the appearance of the real estate object, its technical condition, economic factors that affect the total value of the object.

Effective age -this is the age corresponding to a certain physical state of the object and taking into account the possibility of its realization.

Typical service life refers to the standard service life.

Standard service life -this is the service life of buildings or structures, which is defined in regulations.

Under remaining economic lifebuildings mean the period from the date of its assessment to the end of its economic life. This period uses an expert appraiser to estimate future earnings. The term of the remaining economic life of the object is increased by its modernization or repair.

All the stages of the life cycle and the lifespan of real estate objects discussed above are interconnected. The owner of real estate, in order to implement adequate measures that will ensure an increase in the profitability of the property and its safety, must take into account the presence of real estate in a certain (any) stage of the life cycle.