Game Behavior In Space Configurations And Trading Strategies For Commercial Real Estate

Due to the increasingly intense competition in commercial real estate (CRE) market, the game structure between CRE and stakeholders is more and more complex, and it is increasingly difficult to make related decisions. Based on the previous literature and the survey from practice, from the perspective of game theory, this dissertation systematically analyzes the decisions about space configurations and transaction and further constructs constant liquidity value index of CRE. To solve critical decision problems for CRE, this dissertation builds mathematical models and uses game theory to analyze optimal decisions under different operating enviroments of CRE.Firstly, taking Outlets as the research object, this dissertation studies optimal location choice strategy under the game between different CRE. Based on spatial competition theory, this study considers the optimal location choice for Outlets when traditional shopping center exists and highlights retailers’optimal choices between different CRE. The results show that when the agglomeration degree of customers is low, Outlets should be near to the customers and expand the construction scale as large as possible. When the degree is high, Outlets may be far away from the customers and the construction scale is increasing in the distance between Outlets and customers. In addition, the price of Outlets’retailers will not deviate from Outlets’guiding price.Secondly, this dissertation explores how CRE should manage tenants’competitive game to carry on appropriate space allocation strategies. This study takes a shopping center as the research object. The shopping center’s cooperation modes with anchor stores and non-anchor stores are different on rental price and allocated space. The shopping center needs to adopt appropriate strategies of tenant mix and space allocation. Then, it can manage retailers’ competition for rental space and product market well and further maximize rental income. The results show that anchor stores’ rental price should be lower than non-anchor stores’, but anchor stores can get more space in average. The shopping center’s whole space should not be too large and should also not be too small when anchor stores’ advantage is significant. Vacant space would not exist under an appropriate strategy of space allocation. The shopping center should choose a tenant mix that makes the difference between anchor stores and non-anchor stores small to increase product competition.Thirdly, this dissertation considers the game between CRE and tenants and designs optimal rental contracts. This study takes contracts with expansion rights as the research object and considers the tenants’contract selection and the landlords’contract design issues under asymmetric expansion information. Landlords can provide three kinds of contracts with expansion rights, i.e., contracts with the option to expand, contracts with the right of first offer, and contracts with the right of first refusal. The results show that contracts with the option to expand(contracts with the right of first offer and contracts with the right of first refusal) are favored by tenants with high(low) expansion possibility. In the competitive market, tenants with high(low) expansion possibility will choose landlords with high(low) expansion possibility. The landlord in the monopolistic market achieves greater profits than that in the competitive market. Generally, landlords adjust the rental price downwards in economic growth period and upwards when economic depression happens.Finally, the game between buyers and sellers in CRE market is the critical problem for the transaction. This dissertation mainly studies the trading behavior of buyers and sellers. From time dimension, this study first analyzes the relative movements of the underlying buyers’and sellers’ reservation prices when the market environment changes. The result shows that the sellers’ moving is not larger than the buyers’. Then, at a time moment, the game equilibrium on the transaction price between buyers and sellers is studied. The result shows that the final transaction price is linear with the relative bargaining power of buyers and sellers. At last, based on the analysis on transaction behavior, this dissertation constructs constant liquidity value index of CRE to guide the decision making.