Based On The Options Game Of The Commercial Real Estate Investment Decision-making Research

Huge investment scale and long payback period are characteristics of commercial real estate projects. Blind developing commercial real estate will bring developers and later operators big problems. Decision making is the top problem for developers. The success or failure of the commercial real estate projects mostly depends on the choice of investment opportunity. Therefore how to scientifically make decisions to commercial real estate investment became a worth studying and discussing issue.When considering a real estate project, developers usually employ traditional ways to assess its feasibility. Due to the specialty of real estate developments, traditional method such as DCF can not evaluate them reasonably. Because it ignores the flexibility value of project management and the fact that management itself has competitiveness. Real option decision-making method takes the flexibility value of project management into account properly. However, it overlooks the fact that Real option itself is non-exclusive. Consequently, The best way to solve the drawbacks of these two methods is option game decision-making method, which considers both the flexibility value of project management and non-exclusiveness of projects.Based on this, option game decision-making method is brought from illustrating weaknesses of traditional project decision making methods. This paper introduces the advantages of option game decision-making method and emphasizes double-headed the first in the competition, follow the evaluation model. Than it analyses the option game feature of commercial real estate development projects and set option game of the double-headed real estate development project evaluation model, Meanwhile, the author uses this method in commerce real estate development projects’ decision making, compare this method’s superiority, rationality and correctness to traditional ways from practical application.In the end, several strategies and advises are put forward for commercial real estate’s investment decision making variously. Hopefully they can offer better choices for developers when they are deciding whether to invest in a real estate.