This article analyses how cognitive and emotional biases affect investor decisions when buying or selling office buildings. To meet this aim, we conducted qualitative research to detect the most important biases. We carried out a total of 26 interviews from across the industry covering investors, fund managers, brokers and valuers. The questions cover three main topics: (1) what triggers the investment decision of buying or not buying an office building; (2) to see who is involved in the investment decision; and (3) to see how practitioners in real estate determine the value of an office building.

We transcribed and analysed the interviews. The main results show that (1) some investors and fund managers assume the exit yield of their investment is equal to the initial yield when they estimate the Internal Rate of Return (IRR). Therefore their assumptions are anchored (biased) to acquisition price of the office building. Also (2) the assumptions and scenarios considered by investors and fund managers are framed by the data source they used such as MSCI, PMA or similar data. In addition, (3) their judgments are affected by social influences; the pressure and herding effects from other brokers, valuers and asset managers. Finally, (4) investors and fund managers are willing to take higher risks with the money of the fund than with their own money