Liquidity and the drivers of search, due diligence and transaction times for UK commercial real estate investments

Trading commercial real estate involves a process of exchange that is costly and which occurs over an extended and uncertain period of time. This has consequences for the performance and risk of real estate investments. Most research on transaction times has occurred for residential rather than commercial real estate. We study the time taken to transact commercial real estate assets in the UK using a sample of 578 transactions over the period 2004 to 2013. We measure average time to transact from a buyer and seller perspective, distinguishing the search and due diligence phases of the process, and we conduct econometric analysis to explain variation in due diligence times between assets. The median time for purchase of real estate from introduction to completion was 104 days and the median time for sale from marketing to completion was 135 days. There is considerable variation around these times and results suggest that some of this variation is related to market state, type and quality of asset, and type of participants involved in the transaction. Our findings shed light on the drivers of liquidity at an individual asset level and can inform models that quantify the impact of uncertain time on market on real estate investment risk.

Intellectual property management in M&A transactions

Purpose – The purpose of this paper is to focus on the intellectual property (IP) aspects of mergers and acquisitions (M&A) transactions. Design/methodology/approach – A holistic approach is proposed that embraces IP as an integral part of the M&A process in the form of a roadmap for the strategic and purposeful management of IP assets in M&A deals. Findings – Addressing IP issues in transactions in isolation can lead to undesirable consequences (e.g. considerable costs for unplanned purchases of rights). IP due diligence and IP integration project processes can be automated using collaborative software solutions. Thereby, risk can be reduced through the creation of a high level of transparency and predefined responsibilities. Practical implications – Although the proposed IP management framework is based on intellectual property matters relevant to German jurisdiction, conclusions derived and the proposed roadmap are transferable to other jurisdictions and hence have a broader relevance. Evidence for this is provided by the successful application of the roadmap in the context of the multinational transaction stated above. Originality/value – This paper is based on the authors' collective experience, insight and reflected observation of M&A practice gained in advisory M&A roles in management consultancies over a period of more than a decade. The paper summarizes the authors' reflections and observations and brings these into the context of the current management literature. Moreover, this paper builds on earlier published research.

New scientific paradigms for probiotics and prebiotics

The inaugural meeting of the International Scientific Association for Probiotics and Prebiotics (ISAPP) was held May 3 to May 5 2002 in London, Ontario, Canada. A group of 63 academic and industrial scientists from around the world convened to discuss current issues in the science of probiotics and prebiotics. ISAPP is a non-profit organization comprised of international scientists whose intent is to strongly support and improve the levels of scientific integrity and due diligence associated with the study, use, and application of probiotics and prebiotics. In addition, ISAPP values its role in facilitating communication with the public and healthcare providers and among scientists in related fields on all topics pertinent to probiotics and prebiotics. It is anticipated that such efforts will lead to development of approaches and products that are optimally designed for the improvement of human and animal health and well being. This article is a summary of the discussions, conclusions, and recommendations made by 8 working groups convened during the first ISAPP workshop focusing on the topics of: definitions, intestinal flora, extra-intestinal sites, immune function, intestinal disease, cancer, genetics and genomics, and second generation prebiotics. Humans have evolved in symbiosis with an estimated 1014 resident microorganisms. However, as medicine has widely defined and explored the perpetrators of disease, including those of microbial origin, it has paid relatively little attention to the microbial cells that constitute the most abundant life forms associated with our body. Microbial metabolism in humans and animals constitutes an intense biochemical activity in the body, with profound repercussions for health and disease. As understanding of the human genome constantly expands, an important opportunity will arise to better determine the relationship between microbial populations within the body and host factors (including gender, genetic background, and nutrition) and the concomitant implications for health and improved quality of life. Combined human and microbial genetic studies will determine how such interactions can affect human health and longevity, which communication systems are used, and how they can be influenced to benefit the host. Probiotics are defined as live microorganisms which, when administered in adequate amounts confer a health benefit on the host.1 The probiotic concept dates back over 100 years, but only in recent times have the scientific knowledge and tools become available to properly evaluate their effects on normal health and well being, and their potential in preventing and treating disease. A similar situation exists for prebiotics, defined by this group as non-digestible substances that provide a beneficial physiological effect on the host by selectively stimulating the favorable growth or activity of a limited number of indigenous bacteria. Prebiotics function complementary to, and possibly synergistically with, probiotics. Numerous studies are providing insights into the growth and metabolic influence of these microbial nutrients on health. Today, the science behind the function of probiotics and prebiotics still requires more stringent deciphering both scientifically and mechanistically. The explosion of publications and interest in probiotics and prebiotics has resulted in a body of collective research that points toward great promise. However, this research is spread among such a diversity of organisms, delivery vehicles (foods, pills, and supplements), and potential health targets such that general conclusions cannot easily be made. Nevertheless, this situation is rapidly changing on a number of important fronts. With progress over the past decade on the genetics of lactic acid bacteria and the recent, 2,3 and pending, 4 release of complete genome sequences for major probiotic species, the field is now armed with detailed information and sophisticated microbiological and bioinformatic tools. Similarly, advances in biotechnology could yield new probiotics and prebiotics designed for enhanced or expanded functionality. The incorporation of genetic tools within a multidisciplinary scientific platform is expected to reveal the contributions of commensals, probiotics, and prebiotics to general health and well being and explicitly identify the mechanisms and corresponding host responses that provide the basis for their positive roles and associated claims. In terms of human suffering, the need for effective new approaches to prevent and treat disease is paramount. The need exists not only to alleviate the significant mortality and morbidity caused by intestinal diseases worldwide (especially diarrheal diseases in children), but also for infections at non-intestinal sites. This is especially worthy of pursuit in developing nations where mortality is too often the outcome of food and water borne infection. Inasmuch as probiotics and prebiotics are able to influence the populations or activities of commensal microflora, there is evidence that they can also play a role in mitigating some diseases. 5,6 Preliminary support that probiotics and prebiotics may be useful as intervention in conditions including inflammatory bowel disease, irritable bowel syndrome, allergy, cancer (especially colorectal cancer of which 75% are associated with diet), vaginal and urinary tract infections in women, kidney stone disease, mineral absorption, and infections caused by Helicobacter pylori is emerging. Some metabolites of microbes in the gut may also impact systemic conditions ranging from coronary heart disease to cognitive function, suggesting the possibility that exogenously applied microbes in the form of probiotics, or alteration of gut microecology with prebiotics, may be useful interventions even in these apparently disparate conditions. Beyond these direct intervention targets, probiotic cultures can also serve in expanded roles as live vehicles to deliver biologic agents (vaccines, enzymes, and proteins) to targeted locations within the body. The economic impact of these disease conditions in terms of diagnosis, treatment, doctor and hospital visits, and time off work exceeds several hundred billion dollars. The quality of life impact is also of major concern. Probiotics and prebiotics offer plausible opportunities to reduce the morbidity associated with these conditions. The following addresses issues that emerged from 8 workshops (Definitions, Intestinal Flora, Extra-Intestinal Sites, Immune Function, Intestinal Disease, Cancer, Genomics, and Second Generation Prebiotics), reflecting the current scientific state of probiotics and prebiotics. This is not a comprehensive review, however the study emphasizes pivotal knowledge gaps, and recommendations are made as to the underlying scientific and multidisciplinary studies that will be required to advance our understanding of the roles and impact of prebiotics, probiotics, and the commensal microflora upon health and disease management.

Valuation accuracy: reconciling the timing of the valuation and sale

Carsberg (2002) suggested that the periodic valuation accuracy studies undertaken by, amongst others, IPD/Drivers Jonas (2003) should be undertaken every year and be sponsored by the RICS, which acts as the self-regulating body for valuations in the UK. This paper does not address the wider issues concerning the nature of properties which are sold and whether the sale prices are influenced by prior valuations, but considers solely the technical issues concerning the timing of the valuation and sales data. This study uses valuations and sales data from the Investment Property Databank UK Monthly Index to attempt to identify the date that sale data is divulged to valuers. This information will inform accuracy studies that use a cut-off date as to the closeness of valuations to sales completion date as a yardstick for excluding data from the analysis. It will also, assuming valuers are informed quickly of any agreed sales, help to determine the actual sale agreed date rather than the completion date, which includes a period of due diligence between when the sale is agreed and its completion. Valuations should be updated to this date, rather than the formal completion date, if a reliable measure of valuation accuracy is to be determined. An accuracy study is then undertaken using a variety of updating periods and the differences between the results are examined. The paper concludes that the sale only becomes known to valuers in the month prior to the sale taking place and that this assumes either that sales due diligence procedures are shortening or valuers are not told quickly of agreed sale prices. Studies that adopt a four-month cut-off date for any valuations compared to sales completion dates are over cautious, and this could be reduced to two months without compromising the data.

IS capabilities for supporting post crisis regulatory compliance

The financial crisis of 2007-2009, has precipitated large scale regulatory change. Financial organizations are faced with implementing new regulations of considerable breadth and depth. Firms are faced with engaging in complex and costly change management programs at a time when profits are diminished. Furthermore, investors are becoming increasingly focused on compliance are seeking to ensure that organizations can demonstrate robust compliance practices as part of their due diligence process .The role of IS in underpinning stable, is paramount. IS allows the stable and consistent controls for meeting regulations in order to ensure long term effective compliance. Consequently, our study explores the IS capabilities which support the post crisis regulatory landscape. We identify eight key capabilities: Managing Internal Controls, Measuring Monitoring and Reporting Transactions, IS Development and Procurement, Managing Third Parties, Sharing and Selecting Best Practice, IS Leadership, Data Management and Enabling Cultural Change.

Radiative forcing since preindustrial times due to ozone change in the troposphere and the lower stratosphere

Changes in atmospheric ozone have occurred since the preindustrial era as a result of increasing anthropogenic emissions. Within ACCENT, a European Network of Excellence, ozone changes between 1850 and 2000 are assessed for the troposphere and the lower stratosphere ( up to 30 km) by a variety of seven chemistry-climate models and three chemical transport models. The modeled ozone changes are taken as input for detailed calculations of radiative forcing. When only changes in chemistry are considered ( constant climate) the modeled global-mean tropospheric ozone column increase since preindustrial times ranges from 7.9 DU to 13.8 DU among the ten participating models, while the stratospheric column reduction lies between 14.1 DU and 28.6 DU in the models considering stratospheric chemistry. The resulting radiative forcing is strongly dependent on the location and altitude of the modeled ozone change and varies between 0.25 Wm(-2) and 0.45 Wm(-2) due to ozone change in the troposphere and - 0.123 Wm(-2) and + 0.066 Wm(-2) due to the stratospheric ozone change. Changes in ozone and other greenhouse gases since preindustrial times have altered climate. Six out of the ten participating models have performed an additional calculation taking into account both chemical and climate change. In most models the isolated effect of climate change is an enhancement of the tropospheric ozone column increase, while the stratospheric reduction becomes slightly less severe. In the three climate-chemistry models with detailed tropospheric and stratospheric chemistry the inclusion of climate change increases the resulting radiative forcing due to tropospheric ozone change by up to 0.10 Wm(-2), while the radiative forcing due to stratospheric ozone change is reduced by up to 0.034 Wm(-2). Considering tropospheric and stratospheric change combined, the total ozone column change is negative while the resulting net radiative forcing is positive.

Changes in the global sulfate burden due to perturbations in global CO2 concentrations

A large ensemble of general circulation model (GCM) integrations coupled to a fully interactive sulfur cycle scheme were run on the climateprediction.net platform to investigate the uncertainty in the climate response to sulfate aerosol and carbon dioxide (CO2) forcing. The sulfate burden within the model (and the atmosphere) depends on the balance between formation processes and deposition (wet and dry). The wet removal processes for sulfate aerosol are much faster than dry removal and so any changes in atmospheric circulation, cloud cover, and precipitation will feed back on the sulfate burden. When CO2 is doubled in the Hadley Centre Slab Ocean Model (HadSM3), global mean precipitation increased by 5%; however, the global mean sulfate burden increased by 10%. Despite the global mean increase in precipitation, there were large areas of the model showing decreases in precipitation (and cloud cover) in the Northern Hemisphere during June–August, which reduced wet deposition and allowed the sulfate burden to increase. Further experiments were also undertaken with and without doubling CO2 while including a future anthropogenic sulfur emissions scenario. Doubling CO2 further enhanced the increases in sulfate burden associated with increased anthropogenic sulfur emissions as observed in the doubled CO2-only experiment. The implications are that the climate response to doubling CO2 can influence the amount of sulfate within the atmosphere and, despite increases in global mean precipitation, may act to increase it.

Nitrous acid: vibrational frequency shifts due to 15N substitution, and the harmonic force field

Vibration rotation spectra of HO15 NO and DO15 NO have been measured at a resolution of 0•04 cm-1 to determine the isotopic shifts in the vibrational band origins. These have been used together with recently determined data on the vibrational band origins, Coriolis constants, and centrifugal distorition constants, to determine the harmonic force field of both cis and trans nitrous acid in least squares refinement calculations. The results are discussed in relation to recent ab initio calculations, the inertia defects, and the torsional potential function.