Year Published
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.
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.
Research Category