New Value from Stalled Real Estate Investments. Empirical Evidences from Some Italian Experiences

Abstract

The recent economic global crisis has raised the default rate of mortgage loans. Real estate assets -buildings or areas-set as collateral for mortgages encounter numerous difficulties during the liquidation phase. They can remain in disuse without meeting any possible purchaser or they can be sold at an auctioned price much lower than the book value. However, some developers may see investment opportunities in these areas and undertake processes of value extraction.. These subjects undertake processes of value extraction from these areas. This research aims to investigate whether the strategies and experiences of urban transformation can find valid strategies for the valorisation of these assets. Information derived from transformation works on unfinished buildings have been used as data set. For the purposes of the investigation, the stalled real estate investments were the closest representative comparable to the characteristics of real estate collaterals in non performing loans. The result is the elaboration of a grounded theory that theorizes three intervention guidelines for these assets, not based only on market indicators but also exploiting the potential of urban planning tools such as the transfer of development rights.