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Introduction
Risks and uncertainties are associated with all projects in commercial real estate development and they can strongly influence all related progresses at all stages of the entire lifecycle of properties. Specifically, those risks can occur at initial stage of a project when developers conduct feasibility study, design and planning, bidding and tendering, construction, or even during marketing or handover period, meanwhile, risks existing in initial stage can also influence the use of the property as well.
Risks in each commercial real estate development can be identified at project management level using brainstorming techniques, and risks are generally defined as events that could arise and affect the critical factors of one project. For example, [19] Huffman (2002) put major risks associated with commercial real estate development into three categories, including financial risks, physical risks, and regulatory risks. There are many direct or indirect reasons that risks may occur in commercial real estate development, and some normal reasons are relevant to the fragments existed throughout a project lifecycle covered by design, construction, and facilities management, which results in the lack of integration of building elements, communication among project partners, and even misapplication of the building structure and its services systems.
In addition to the influence of those risks to specific project, there is also a concern of their impacts to local, regional and national environment, communities and economies in a long-term perspective under climate change scenario with regard to competitive enterprise growth and sustainable urban development. For example, according to generic characteristics of commercial real estate, one of the most significant risk and uncertainty towards investment return is the income stream, since the income stream is uncertain, as well as the possible events affecting the income stream and uncertainty as to the probability of the outcomes from these events ([15] Frodsham, 2007), therefore, affordability is adopted in Table I [Figure omitted. See Article Image.] as one criterion to assess risks. Moreover, it is important to look at subjective issues that may not be revealed by objective data according to statistics but might lead to risks of loss for some reasons. According to [4] Booth et al. (2002), there are subjective elements to be considered in risk management process, which covers:
- tenant risk (multi-tenanted less risky);