Governance: We stress test our assumptions when underwriting a property for acquisition, disposition and hold-sell analyses. We have a base case which is stress-tested against downside scenarios. We also produce one-off scenarios dependent on macro-political events. For example, we ran a bespoke No Deal Brexit scenario, and an alternate set of No Deal Brexit real estate forecasts, for use in our underwriting in the UK.
The C.I.T.I.E.S. model scores and ranks cities based on the strength of specific structural attributes. Variable selection and model weights are determined by a variable’s respective correlation to historical commercial real estate returns. The 13 input variables are organized into six themes: Commercial Real Estate, Infrastructure, Tourism, Innovation, Economy & Demographics and Sustainability. Input variables are scored on a scale from 1 to 5. These scores are then combined into a single weighted average Winning City score.