Real Estate Portfolio Decision Making

Corporate or public organizations often own a real estate portfolio which has been acquired to serve certain organizational goals. However, some buildings in the portfolio might no longer serve these goals and could be sold or, conversely, buildings that could serve goals can be acquired. Choosing the combination of interventions that meets these different goals best is a multi-criteria group decision-making problem. Multiple Criteria Decision Analysis (MCDA) methodologies enable the aggregation of the performance rating of alternatives on different criteria into an overall performance rating. Given that criteria are properties by which to measure the portfolio’s performance MCDA approaches should help to find the intervention that meets different goals best. A survey on such approaches showed that they (1) use preference scales to which mathematical operations do not apply or (2) do not have a well-defined procedure for selecting the most preferred portfolio. In this chapter, a design methodology using preference scales to which mathematical operations are applicable has been converted into a portfolio design methodology so that it (1) allows all decision-makers to iteratively enter their criteria and preferences and (2) orders all possible portfolios based on the overall preference rating. It has been evaluated based on a case simulation with data from a Dutch municipality.