Real estate lifecycle
As any other product, real estate is also subject to a life-cycle. It describes the life cycle and the market viability of a building or other real-estate.
Old real estate, low income
The older the real estate, the lower the yields. The life cycle resembles a classic sine wave. An average of 20 years is assumed for a cycle. A theoretical reference value, to transition old living quarters into a boom phase of the life cycle again. To accomplish this, different options were considered.
Modernization brings old building up-to-date
A requirements analysis and finally a requirement statement are conducted at the beginning. It will inform you, with which resources and measures a real-estate object can be returned into a proper condition. Revitalization modernizes old living quarters according to latest structural and energetic criteria. A decisive factor hereby is the project development, which includes all possibilities into the consideration and enhances the value of Living quarters through different measures. The living, energy and utilization concepts must be based on the current demand, and also provide strategic headroom for future market conditions. Niersberger is already thinking ahead during the project development. Sometimes even a complete new building construction is useful, if the building is no longer in a good condition.
Real scenario on the basis of detailed analyses
What action can be taken when and under what conditions, is shown by Niersberger in specifically developed scenarios. They are based on a detailed analysis of the real-estate (due diligence) and will of course be discussed with the builder-owner. Because he is the one making the final decision as to how his real-estate will be revived, and in what state or at which entry point the life cycle will start again.
The three phases of the Niersberger life cycle include:
Due diligence, financing, project development, creation (revitalization, modernization, construction, reconstruction, building in existing real-estate)
Maintenance, rental, operation
Yield, return, sale