1999
Abstract:
This paper synthesizes elements of the traditional and contemporary theory of
real estate markets to formulate an empirical framework for exploring metropolitan
office rent processes. Such a framework is then applied to the analysis of office rents
across eighteen U.S. office markets during 1986-1995. The empirical results
underscore the sluggishness of rental adjustments, highlight the extent of rental
disequilibria across markets, and uncover the role of office employment factors--size,
diversity, spatial organization, growth rates, and volatility--, construction costs,
interest rates, amenities, and zoning in shaping interarea differentials in the
equilibrium component of office rents.
