Essay on Geographic Technology in Real Estate

Essay on Geographic Technology in Real Estate

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Geographic Technology in Real Estate:
A Technology Assessment Report

Introduction

Real estate is defined by the Barron’s Dictionary of Real Estate Terms as the “land and everything more or less attached to it. Ownership below to the center of the earth and above to the heavens.” This definition clearly conveys the geographically fixed nature of real estate and the inherent risk associated with this characteristic that is not found in other financial assets such as stocks and bonds. It is the identification and quantification of these risks that dominates the real estate decision. Regardless of whether a large insurance company is determining if it will insure a “trophy” office property in New York City or Starbucks debating the financial feasibility of a store in a new shopping center, identification of risk is central to the decision-making process. The advent of geographic information systems (GIS) has allowed these decision-makers to better analyze various risk components and draw more informed conclusions.

The purpose of this assignment is to provide an analysis of GIS applications in the real estate industry. The primary focus is on the two most widely used applications of the technology in commercial real estate sector; (1) commercial lending and (2) site selection; however a review of the residential real estate sector, which is in the early stages of implementing GIS, is also included.

Commercial Lending Institutions

Commercial real estate lenders are extremely concerned with the physical stability and health of a property serving as collateral for a loan they have originated. Should the collateral be destroyed in some manner through either Acts of God (hurricanes, tornados, floods, etc.) or by ...


... middle of paper ...


...l estate industry. From the decision to lend money for the construction of a new skyscraper in Chicago, to the choice between the corners of a highway intersection for a new gas station, GIS plays a crucial role in allowing the key participants to make more informed decisions. Judging from the incorporation of GIS applications by today’s real estate companies, the importance of this tool will only continue to expand.









Works Cited

Castle, Gilbert H. GIS in Real Estate: Integrating, Analyzing, and Presenting Locational Information, Appraisal Institute, 1998.

Friedman, J.P., J.C. Harris and J.B. Lindeman, Barron’s Dictionary of Real Estate Terms, Fifth Edition, Hauppauge, NY, Barron’s Educational Services, Inc., 2000.

Thrall, Grant Ian, Business Geography and New Real Estate Market Analysis, New York, Oxford University Press, Inc., 2002.

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