Exploring the use of dual-processing in commercial property development decision making under conditions of risk and uncertainty

The commercial property sector makes a significant contribution to the UK economy. The central question addressed here is the degree to which decision-making in commercial real estate development is sophisticated and rational and the degree to which it relies on behavioural instincts and intuition. In doing so, decision making theories, including heuristics, are considered and their prevalence in the field of commercial real development examined. A ‘dual-processing’ decision-making model is proposed and examined as to whether it is an accurate representation of developers’ behaviour and it can offer an effective lens through which to examine decisions under conditions of risk and uncertainty. The participants believed that they adopt a fairly objective and rational approach to complex real estate development decision making and related risks. However, analysis of the data suggests otherwise; with a number of clearly identifiable heuristics playing a significant role. The article concludes that the dual-processing model of commercial real estate development decision-making does provide a realistic representation of the decision-making approach adopted by commercial real estate developers in practice. The work extends existing research on behavioural influences on decision making into the commercial real estate sector and its results have clear implications for professional practice