Location and cash flow typically determine the value of real estate. That is, how much income can a property generate and what’s the outlook for a particular spot within a given neighborhood.

But such evaluations are small-minded, ignoring the true value of real estate: The Power of Space.

Real estate is nothing more than land, the buildings that go on top and in certain circumstances, the natural wealth found beneath the soil. Depending on the location and use, real estate provides the circumstances by which all manner of economic outputs are generated. Farms produce food, factories spit out goods, offices churn out services while apartments and homes give us shelter.

Owners of real estate typically lease their space to tenants, who pay for the right to conduct business on land that isn’t theirs. Rent collected, less ownership costs, is an owner’s bottom line — the figure from which the property itself is valued, after some nominal consideration for what the future may hold.

How close-minded for owners to value real estate this way, to ignore a property’s ability to facilitate creation.

Creation generally happens inside. Think of the Bill Hewlett and Dave Packard, who holed up in a garage on their Palo Alto rental property to launch what would eventually become HP. How many more of today’s most valuable companies were launched in such dank structures.

Groundbreaking scientific research? Inside laboratories. Visionary art? Within the brick and timber of warehouses-turned-lofts. The bond of family? Molded and strengthened inside the home. The flame of love? Lit under the dim glow of a candlelit café.

Inspiration may come from nature, but creation is cultivated underneath a roof.

And real estate is the vehicle by which this creation happens. Developers, if they were to look past the bottom line, would see that the space they are building is more than just an exit price per square foot. Millions of dollars of future economic value and immeasurable benefits to human society may go on within what are far more than just a foundation, four walls and a roof.

Yet the development business model is tragically shortsighted. The allure of leverage, combined with return-hungry investors and the inevitability of cost overruns, too often result in value engineering away the potential of space. Scrap the skylights to keep returns high. Skimp on flooring to hit those numbers. Never mind that those countless decisions to cut add up to shitty space where the environment for creation, already fragile, cannot thrive.

What results is a flimsy rendition of a designer’s dream, a watered down version of beauty.

They say that visionary real estate investors can walk through property, however dilapidated, and see the potential, peer past the grit and into the future to what the crumbling warehouse could become.

I challenge real estate owners to take it one step further, asking not just what might be built, but what might be created inside.