Too much of the received real estate management wisdom is suspect, casually embraced or just plain wrong. The real estate press, the so-called talking heads, conference organizers, the Serious People, and the public at large at times seem to be uncritical consumers of financial advice; maybe they are simply too busy. Managers are no exception: Instead of evidence-based thinking, many times managers, in their headlong pursuit of assets under management, embrace bad heuristics or rules of thumb. These cognitive devices may have pragmatic value, but all too often they introduce bias in subtle, unnoticed and ultimately costly ways.

We have written that investors suffer from risk illusion and systematically avoid inconvenient facts. We also believe too few managers have the inclination, much less the tools, to evaluate risk properly. What passes for risk management is anecdotal and untestable. Therefore, we do not know, for those firms that embrace risk management, whether their r