14/08/2024
SYSTEMS THINKING FOR THE REAL ESTATE SYSTEM
Today we are continuing to start the El Salvador Real Estate Lab Laboratorio del Sistema Inmobiliario SV . On August 2nd Luis Dominguez Luis Ernesto Dominguez Magaña founder of the CCIL Creative Class & Intelligentsia Lab registered to the offering on the u-school for Transformation (by Presencing Institute Presencing Institute ) : u-lab 0x . Theory U is an awareness-based method for the transformation of self and system that blends systems thinking, innovation, and leading change--from the viewpoint of an evolving human consciousness. The short course will introduces key concepts in Theory U including:
The U framework.
The essence of systems thinking and systems change.
The choice we face between Presencing and Absencing.
How we can lead through the quality of our listening and attention.
The image is from a video where Otto Scharmer Otto Scharmer explains the Essence of Systems Thinking: In many cases, we know what needs to be done to address the crises we are facing but we don’t know how to make it happen. The video delves about how can we bridge this knowing-doing gap? Awareness-based systems change provides an approach that activates our individual and collective agency and helps us to sense and actualize the emerging future.https://youtu.be/zjeDGG1VdfE?si=5OYtFzO6hwli4l5O
We are looking at the learning module content.
Because of the new migration of expats from different parts of the world to El Salvador, we have chosen to analyze the Real Estate System and the Investmet House Market of the San Salvador Metropolitan Area, that includes the coastal region of Costa del Balsamo where many of this investments are coming to and gentrification is taking place and where a social divide is beeing created between locals and foreigners, appart from the environmental impact this growth is causing.
We have taken a couple of years to create an artificial simulator of the Real Estate System and have identified the variables of each part of the system:
A/SPACE MARKET
A1) Supply side of the Space Market: Space Landlords. Arrendantes de Espacios SV
A.1.1.Current Inventory of Physical Spaces for Lease.
A.1.2.Current Rental Prices.
A.1.3.Forecasts of supply/Inventory.
A.1.4.Forecast of Rental Prices.
A2) Demand side of the Space Market:Space Tenants. Inquilinos de Espacios SV
A.2.1.Occupancy Levels.
A.2.2.Demand for space use.
A.2.3.Forecasts of occupancy levels.
B/ASSET MARKET
B3) Supply side of the Asset Market: Real Estate Asset Sellers Propietarios vendedores de Activos Inmobiliarios SV
B.3.1.General Forecasts on Cash Flows of Real Estate Assets and their effect on future asset values or selling prices (Property Market Value)
B.3.2.Increase or decrease in operating cash flows of assets due to increases or decreases in rental prices and occupancy rates.
B.3.4.Increase or decrease in asset selling prices due to increases or decreases in capitalization rates.
B.3.5.Owners' ability to regulate the flow of financial capital into the real estate development industry.
B4) Demand side of the Asset Market: Real Estate Asset Buyers (Investors Buying). Inversionistas compradores de Activos Inmobiliarios SV
B.4.1.Information on market capitalization rates required by real estate asset buyers in the asset market.
B.4.2.Information on investors' desires and perceptions regarding the risks and returns of real estate assets and their effects on capitalization rates. (desire for returns and perceived risks)
C.DEVELOPMENT INDUSTRY
C5) Real Estate Developers: El Desarrollador Inmobiliario SV
C.5.1.Forecasts of market values - future selling prices - of assets under development (three years).
C.5.2.Current development costs and three-year forecasts, including construction costs and land costs and their opportunity value (including acquisition costs).
C.5.3.Information regarding expected profits or earnings by Developers.
C.5.4.Forecasts of future construction or ex*****on times.
C.5.5.Number of new spaces being started (construction starts).
C.5.6.Number of new spaces that have completed construction (construction completions).
C.5.7.Spaces pre-leased before completion, demolitions, conversion of old structures, construction of new buildings, and completed "net" construction.
C.5.8.Is development profitable?
EXOGENOUS SYSTEMS TO THE REAL ESTATE SYSTEM
D.NATIONAL AND LOCAL ECONOMIES El Economista Urbano SV
D6) Economy
D.6.1.Perspectives on the Salvadoran National and Local Economies/Macroeconomies.
D.6.2.Causes within the National and Local Economies that produce demand for certain quantities of use of physical spaces of various types, as a function of the cost (rental price) of such spaces, by Tenants in El Salvador, within the space market of the Real Estate System.
D.6.3.Forecasts of macroeconomic factors such as interest rates and inflation.
E.NATIONAL AND INTERNATIONAL CAPITAL MARKETS Expertos en Mercados de Capitales e Inversiones Inmobiliarias SV
E7) Capital Markets and Real Estate Investments:
E.7.1.Investors' desires and perceptions regarding risks and returns of real estate assets compared to other types of investment available in the capital market and their effect on cap rates.
E.7.2.Availability of debt or other types of liquidity.
E.7.3.Benchmarking of asset returns, long-term interest rates, or risk-free rates and their effect on cap rates.
E.7.4.Considerations on expanded national and international capital markets: Asset Market and Money Market.
