The promise of ARES is that it provides a forum in its annual sessions and publications for research and teaching materials on managerial decisionmaking aspects of real estate. It offers an environment at annual meetings for the active participation of all members, and a way of networking on all sorts of issues real estate faculty may be faced with at their own colleges or universities.

Hugh O. Nourse

English

Research Papers in Economics

On the twentieth anniversary of the American Real Estate and Urban Economics
Association in 1985, a special session at the annual meeting was devoted to a review of
the accomplishments of that association and its prospects for the future. William
Kinnard, a founding member of AREUEA, reviewed the original need to establish an
academic organization of real estate faculty separate from the National Association of
REALTORS (Kinnard, Berkman, Nourse, and Weicher, 1988). Real estate faculty chose
the Allied Social Sciences Association meeting as the place to start in 1965. A key
problem initially was the name. The founders wanted to call it the American Real Estate
Association, but received comments from the National Association of REALTORS that
the name was too similar to theirs and would be confusing. In the interest of promoting
membership and attracting other academics with an interest in real estate, the name
ﬁnally chosen was the American Real Estate and Urban Economics Association
(AREUEA).
The attacks on the academic quality of real estate courses from the 1959 Ford
Foundation and Carnegie Reports on the state of business education encouraged the
founders to use, by association, the rising and related ﬁeld of urban economics to increase
the prestige of the ﬁeld. The early years were a struggle, and the discussion during those
early years is amply reviewed in the proceedings of the anniversary session of AREUEA.
The AREUEA Journal became, for many years, the only prestigious place to publish
academic articles on real estate topics that were devoted to real estate issues, as opposed
to publishing in ﬁnance or economics journals on real estate topics that illustrated some
point of ﬁnance or economic theory. The drive for prestige and excellence of papers at
annual meetings that would result in quality publications for the Journal may have
resulted in editorial reviewers and ofﬁcers being extremely critical of each other’s work.
The model for quality work became the economic and ﬁnance journals, probably because
real estate has its historical academic roots in land economics.
As a result, the topics addressed became more driven by current issues in economics
and ﬁnance, than in real estate. Furthermore, the purpose of being only a scholarly forum
THE JOURNAL OF REAL ESTATE RESEARCH 1
157
Hugh O. Nourse* The Promise of ARES:
A Past AREUEA
President’s Perspective
*Terry College of Business, The University of Georgia, Athens, Georgia 30602-6255.
Abstract. The promise of ARES is that it provides a forum in its annual sessions and
publications for research and teaching materials on managerial decisionmaking aspects of
real estate. It offers an environment at annual meetings for the active participation of all
members, and a way of networking on all sorts of issues real estate faculty may be faced
with at their own colleges or universities.on these issues neglected the needs of the majority of real estate professors dealing with
the everyday battle to maintain their courses in business schools and with the problems
confronted by real estate practitioners that needed attention. Finally, around 1983,
dissatisﬁed AREUEA members began a separate ‘‘Southern AREUEA meeting,’’ which
eventually turned into the American Real Estate Society (ARES), as reported elsewhere
in this issue.
At the AREUEA anniversary session in 1985, I suggested that AREUEA was not
meeting certain needs of its core membership—real estate faculty—and that unless
something was done, the new organization would perform that task. At that time, being
conscious of travel expense considerations, difﬁculties in devoting time to more than one
organization, and the potential lack of manuscripts for producing (with comfortable
regularity) four issues per year of the AREUEA Journal, I suggested that only one
organization would survive. That organization would be the one supporting the core
membership—the real estate faculty.
As with most forecasts, this one turned out to be wrong. Not only have AREUEA and
ARES survived together, but four more academic journals have been created: The Journal
of Real Estate Finance and Economics, The Journal of Real Estate Research, the Journal of
Real Estate Literature, and The Journal of Real Estate Portfolio Management.
One prediction that I made has proven correct. The organization that would meet
the needs of the core membership—academic real estate faculty—would thrive. That
organization is the American Real Estate Society. In a much shorter time than
AREUEA, it has reached over 1400 members. While AREUEA still publishes one
journal, ARES publishes not one, but three journals, and a monograph series, as well.
There are several points to discuss with respect to the needs of the core members, who
are real estate faculty in colleges of business, that may not apply to economists, ﬁnance
faculty, practitioners, geographers, or planners. A few of these points may be relevant for
some of these other professionals, but most are relevant only for the real estate faculty.
Economic Modeling. Economic modeling assumes smart rational decisionmakers who
are fully informed. Economists usually assume away the management problem—the
problem of decisionmaking in an ambiguous situation with uncertain and partial
knowledge, whereas management faculty consider it to be the major problem of study.
Real estate faculty in a business school, addressing the problems of professional brokers,
managers, lenders, appraisers, and developers, are continually confronted by the
management questions in discussions with practitioners and their business students,
especially MBA students. The ARES journal, The Journal of Real Estate Research, has as
its purpose to concentrate on research in business decisionmaking: ‘‘The American Real
Estate Society has a special interest in research that can be useful to the business
decisionmaker in areas such as development, ﬁnance, investment, management, market
analysis, marketing, and valuation. Manuscripts that are public policy-oriented are
discouraged.’’ Although the Journal of the American Real Estate and Urban Economics
Association emphasizes that it is interested in all aspects of real estate, the title now
emphasizes Real Estate Economics in bold white letters compared to the rest of the title,
and the reviewers seem to approve only papers that rigorously use economic modeling.
The Journal of Real Estate Finance and Economics appears to want state-of-the-art
methodology in economics and ﬁnance modeling. Thus ARES’ Journal of Real Estate
Research is currently the only one directed to management decisionmaking issues.
158 THE JOURNAL OF REAL ESTATE RESEARCH
VOLUME 12, NUMBER 2, 1996Real estate as a ﬁeld of study will not survive in colleges of business if the subject
continues to be taught as simply an application of economic theory to real estate markets,
an application of ﬁnance theory to real estate investments and mortgages, or as an
industry study applying the functional ﬁelds of business—marketing, operations,
ﬁnance—to problems within the real estate industry. None of these approaches justiﬁes a
separate ﬁeld in real estate to be taught in a college of business.
As Art Weimer has written, however, ‘‘the central theme of the real estate courses
offered by the School of Business Administration should be the development of the
necessary knowledge and ability to enable future business managers to deal effectively in
this area and to make sound decisions regarding the purchase, use, leasing, development,
and ﬁnancing of real estate resources in the operations of a business enterprise’’ (Weimer,
1956).
In 1990 I added that real estate is an important integrating course in the business
school curriculum that links marketing, operations and ﬁnance to proﬁts and
shareholder value through real property decisions (Nourse, 1990). Just as the ﬁrst course
in ﬁnance has shifted from Money and Banking, to Financial Institutions, to Financial
Management, the ﬁrst course in real estate should shift from Real Estate Law and Urban
Land Principles to Managerial Real Estate.
Porter and McKibbin, writing for the AACSB (1988), evaluated current management
education and offered several suggestions for its improvement. One of their recom-
mendations was that more cross-functional courses should be offered because business
problems usually do not appear as exclusively those of one function of business. Another
was that material should be included that developed ‘‘soft’’ people skills (without
reducing quantitative work).
‘‘The managerial real estate course meets both of these suggestions. As we have noted
previously, real estate decisions link marketing, ﬁnance, operations, and shareholder
value. Although discounted cash ﬂow methods must be used to show these linkages, some
emphasis needs to be placed on the role of negotiations (a people skill). In a managerial
real estate course, discounted cash ﬂow methods are used not to make decisions, but to
prepare to negotiate, since real estate prices or terms are not given, but must be
negotiated. Negotiating is not only a way of implementing decisions, but a necessary way
of making decisions about real estate choices and of creating credibility for real estate
opportunities within the corporation’’ (Nourse, 1990).
Real Estate Niche. Real estate faculty often are ﬁghting the same battle as those in
insurance, legal studies and management science—the battle for survival in a business
school that is dominated by ﬁnance, management, marketing, and accounting. Today we
might add, management information systems. A student can only take a certain number
of business courses for a degree in an AACSB-accredited school of business. Therefore,
real estate faculty are always trying to carve a niche in the curriculum, and doing so
without the advantage of students being required to take at least one course in the
subject. Thus, real estate faculty discuss and cuss the role of real estate in the business
school body of knowledge and try to systematize in some way a real estate body of
knowledge that reﬂects its importance in the business world. ARES has addressed this
problem in many panel sessions. As noted above, the direction ARES has taken to
concentrate on managerial decisionmaking is the key to carving an appropriate niche in
a College of Business Administration.
THE PROMISE OF ARES 159Cases in Teaching. The emphasis on decisionmaking leads naturally to the use of cases
in teaching. ARES has always run one or two sessions on teaching cases for real estate at
its annual meeting. The development of a case databank has been a goal. Now, with the
Journal of Real Estate Literature, there is the opportunity to publish such teaching cases
in a refereed journal. This enhances the publishing opportunities for real estate faculty
and provides new case material for our teaching efforts. Case research is also useful in
exploring decisionmaking problems in a rigorous way; The Journal of Real Estate
Research has published a few such papers. These methods are not explored in AREUEA
meetings or its journal.
Computer Software. In the same way, ARES, in its Journal of Real Estate Literature, has
included a section reviewing computer software, such as GIS, that is important for real
estate faculty. Such software is an important managerial decisionmaking tool in real
estate. But there is a great need to learn its purpose and limitations. Too often students
and managers let the software make decisions rather than using it as a tool for analyzing
or adding information. Economists in AREUEA are more interested in research software
than decision software, and do not see discussions of computer software adding to
economic knowledge.
A Critical but Congenial Environment. Curiously, the audience at an AREUEA meeting
is assumed to be passive. One goes to listen; or one goes to present; or one goes to be an
ofﬁcial discussant. Often ofﬁcial discussants are less informed about a paper than
members of the audience, and since performance is the objective, there is a tendency to
ﬁnd ways of putting down the authors rather than ﬁnding ways of improving the
methodology, data, purpose, or techniques in the paper. Such discussants usually talk
about the paper they would write rather than the one written. At ARES meetings, on the
other hand, there are no ofﬁcial discussants, but there are usually several researchers who
have tried to study the same problem, used the same data or method, and have many
useful comments for the researcher(s) to improve their work. There is more active
participation; it is expected.
Doctoral student sessions at AREUEA and ARES illustrate many of the differences
between the two organizations. At AREUEA meetings doctoral students are invited to a
special session during which they are lectured by editors or senior members of the
association about how to get ahead, what kinds of articles are being accepted by the
journals, etc. It is as if no student ever had a major professor to advise him on career
objectives, publications, etc. At ARES meetings doctoral students are invited to a special
session at which they present their dissertations. The audience takes ‘‘pot shots’’ at the
research, but there is give-and-take between the candidate and the audience. Afterwards,
the candidates are invited to dinner with the ofﬁcers and Board of ARES in order to
become better acquainted.
Another favorable aspect of ARES is the election of ofﬁcers and Board members. The
elections take place at the annual meetings. To be elected, one has to be present. The
purpose is to elect people who will contribute to the organization, as opposed to electing
someone just because of his/her prestige. This creates a long, active business meeting, and
it results in ofﬁcers who actively contribute to the organization.
The Singular Meeting. Finally, ARES meets separately from other academic associ-
ations. AREUEA could never meet separately from the economists because most of its
160 THE JOURNAL OF REAL ESTATE RESEARCH
VOLUME 12, NUMBER 2, 1996economist members would vote against such a move, and would drop out. Although real
estate faculty need to look far and wide among other disciplines for new techniques and
ideas, it is necessary to be able to meet together once a year to discuss with each other,
outside of sessions, the common problems we face as real estate faculty. In particular,
there are no external constraints from other disciplines as to what our own goals should
be. Since the group is smaller and in one place with only four simultaneous sessions, one
easily meets everyone at the meeting. Besides, as a smaller group than the Allied Social
Sciences Association, ARES can meet in such pleasant places as Key West, Orlando,
Lake Tahoe, and Fisherman’s Wharf. What a wonderful bonus!
Concluding Remarks
Thus, for me, the promise of ARES is that it provides a forum, at the annual sessions and
in its publications, for research and teaching materials on the managerial decisionmaking
aspects of real estate brokerage, management, marketing, lending, and appraisal. It offers
an encouraging environment at annual meetings for the active participation of all
members. It affords a way to improve networking among colleagues on all sorts of issues
that real estate faculty may be faced with at their own colleges or universities. As a bonus,
it gives one the opportunity to explore cities other than New York, Chicago, Washington,
Los Angeles, and San Francisco in the middle of winter.
These characteristics have in fact enabled ARES to increase in size much faster than
AREUEA did. Not only is ARES already the same size, but it supports three journals
and a separate annual meeting for which time and talent must be expended to search out,
ﬁnd, and negotiate an appropriate meeting place. The list of contributors working hard
to build the organization is very long. As an active organization, all of the ofﬁcers, the
editors, reviewers, paper presenters, session chairpersons, and involved participants have
made ARES what it is today.
The promise of ARES is the future of real estate as a separate ﬁeld of study. Real estate
will not survive as a minor application of economic theory, or as one aspect of ﬁnancial
markets. Unless we think of real estate as managerial real estate linking and integrating
real property decisions across functional ﬁelds of business, real estate may not survive as
a ﬁeld of study in the College of Business Administration. ARES provides leadership in
developing this focus and professional support for real estate faculty as a separate group.
That is the promise being fulﬁlled.
References
Kinnard, W. N., H. G. Berkman, H. O. Nourse, and J. C. Weicher, The First Twenty Years of
AREUEA, Journal of the American Real Estate and Urban Economics Association (formerly the
AREUEA Journal), 1988, 16:2, 189–205.
Nourse, H. O., The Role of Real Estate Education in a College of Business Administration, Real
Estate Educators Association Journal, Spring 1990, 66–69.
Porter, L. W. and L. E. McKibbin, Management Education and Development, New York: McGraw-
Hill, 1988, 82–84, 322–25.
Weimer, A. M., The Teaching of Real Estate and Business Administration, Land Economics,
February 1956, 92–94.
THE PROMISE OF ARES 161

Management Education and Development,

The First Twenty Years of AREUEA,

The Role of Real Estate Education in a College of Business Administration, Real Estate Educators Association Journal,

The Teaching of Real Estate and Business Administration,

The Promise of ARES: A Past AREUEA President's Perspective

http://aux.zicklin.baruch.cuny.edu/jrer/papers/pdf/past/vol12n02/v12p157.pdf

The Promise of ARES: A Past AREUEA President's Perspective

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