ABSTRACT
The standard development approach all over the world is to “build new” on vacant sites. However, the refurbishment or redevelopment of existing buildings is becoming increasingly important, and not only for ecological and sustainability reasons. Buildings have to be adapted at a faster pace to changing uses and tenant needs for flexibility. With the “internet of things” and the growing digitalization of so many processes, our work environment has to adapt rapidly and without large capital expenditures. By presenting a case study from Germany, this chapter highlights an investment story from redeveloping former industrial buildings into modern uses for the growing tech and internet industry in the urban center of Berlin. In doing so, the chapter deals with the fundamentals of value investment in real estate. Based on the model that Dodd and Graham (1934) developed for analyzing securities in the 1930s, the authors apply the same principles to analyzing and investing in real estate. They compare the value investment approach to the prime/core investment approach of institutional investors and conceive it as a contrarian strategy for developers, independent of location and cycle.
