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Rental Price Adjustment and Investment in the Office Market

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Author Info
John S. Hekman
Abstract

This study presents estimates of the rental price adjustment mechanism and investment response in the office construction market using data from fourteen cities over the period 1979-1983. Market rents are seen to adjust in response to local as well as national economic conditions. Investment, as measured by building permits, responds strongly to rent in a two-stage regression model, as well as to the long-term growth rate of office employment. Tests for a cobweb-type overreaction by investors do not reveal any cyclical characteristics of the market, indicating that the effects of random demand shocks are not felt beyond the normal construction period. Copyright American Real Estate and Urban Economics Association.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/1540-6229.00339
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Publisher Info
Article provided by American Real Estate and Urban Economics Association in its journal Real Estate Economics.

Volume (Year): 13 (1985)
Issue (Month): 1 ()
Pages: 32-47
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Handle: RePEc:bla:reesec:v:13:y:1985:i:1:p:32-47

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=1080-8620

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  1. Fuerst, Franz, 2006. "Predictable or Not? Forecasting Office Markets with a Simultaneous Equation Approach," MPRA Paper 5262, University Library of Munich, Germany. [Downloadable!]
  2. Waldo L. Born & Stephen A. Pyhrr, 1994. "Real Estate Valuation: The Effect of Market and Property Cycles," Journal of Real Estate Research, American Real Estate Society, vol. 9(4), pages 455-486. [Downloadable!]
  3. John L. Glascock & Minbo Kim & C.F. Sirmans, 1993. "An Analysis of Office Market Rents: Parameter Constancy and Unobservable Variables," Journal of Real Estate Research, American Real Estate Society, vol. 8(4), pages 625-638. [Downloadable!]
  4. V. Öven & Dilek Pekdemir, 2006. "Office Rent Determinants Utilising Factor Analysis—A Case Study for İstanbul," The Journal of Real Estate Finance and Economics, Springer, vol. 33(1), pages 51-73, August. [Downloadable!] (restricted)
  5. Francois Des Rosiers & Marius Theriault & Laurent Menetrier, 2005. "Spatial Versus Non-Spatial Determinants of Shopping Center Rents: Modeling Location and Neighborhood-Related Factors," Journal of Real Estate Research, American Real Estate Society, vol. 27(3), pages 293-320. [Downloadable!]
  6. V.Atilla Oven & Dilek Pekdemir, 2004. "A comparison between office rent determinants of Istanbul and other major metropolitan areas," ERSA conference papers ersa04p166, European Regional Science Association. [Downloadable!]
  7. Jos Janssen & Bert Kruijt & Barrie Needham, 1994. "The Honeycomb Cycle in Real Estate," Journal of Real Estate Research, American Real Estate Society, vol. 9(2), pages 237-252. [Downloadable!]
  8. McCartney, John, 2008. "An Empirical Analysis of Development Cycles in the Dublin Office Market 1976-2007," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI), vol. 2008(4-Winter), pages 68-92. [Downloadable!]
  9. Franz Fuerst, 2004. "Forecasting the Manhattan office market with a simultaneous equation model," Urban/Regional 0410006, EconWPA. [Downloadable!]
  10. Stephen A. Pyhrr & Stephen E. Roulac & Waldo L. Born, 1999. "Real Estate Cycles and Their Strategic Implications for Investors and Portfolio Managers in the Global Economy," Journal of Real Estate Research, American Real Estate Society, vol. 18(1), pages 7-68. [Downloadable!]
  11. Yoon Dokko & Robert H. Edelstein & Allan J. Lacayo & Daniel C. Lee, 1999. "Real Estate Income and Value Cycles: A Model of Market Dynamics," Journal of Real Estate Research, American Real Estate Society, vol. 18(1), pages 69-96. [Downloadable!]
  12. Jacques Gordon & Paige MosbaughTodd Canter & Todd Canter, 1996. "Integrating Regional Economic Indicators with the Real Estate Cycle," Journal of Real Estate Research, American Real Estate Society, vol. 12(3), pages 469-501. [Downloadable!]
  13. Tony McGough & Sotiris Tsolacos, 1999. "Interactions within the Office Market Cycle in Great Britain," Journal of Real Estate Research, American Real Estate Society, vol. 18(1), pages 219-232. [Downloadable!]
  14. Timothy W. Viezer, 1999. "Econometric Integration of Real Estate's Space and Capital Markets," Journal of Real Estate Research, American Real Estate Society, vol. 18(3), pages 503-519. [Downloadable!]
  15. Mark Gallagher & Asieh Mansour, 2000. "An Analysis of Hotel Real Estate Market Dynamics," Journal of Real Estate Research, American Real Estate Society, vol. 19(2), pages 133-164. [Downloadable!]
  16. Kicki Björklund & Bo Söderberg, 1999. "Property Cycles, Speculative Bubbles and the Gross Income Multiplier," Journal of Real Estate Research, American Real Estate Society, vol. 18(1), pages 151-174. [Downloadable!]
  17. Yuming Fu & Maarten Jennen, 2009. "Office Construction in Singapore and Hong Kong: Testing Real Option Implications," The Journal of Real Estate Finance and Economics, Springer, vol. 38(1), pages 39-58, January. [Downloadable!] (restricted)
  18. Raymond E. Owens, 1994. "Commercial real estate overbuilding in the 1980's : beyond the hog cycle," Working Paper 94-06, Federal Reserve Bank of Richmond. [Downloadable!]
  19. Ko Wang & James R. Webb & Suzanne Cannon, 1990. "Estimating Project-Specific Absorption," Journal of Real Estate Research, American Real Estate Society, vol. 5(1), pages 107-116. [Downloadable!]
  20. Thomas E. McCue & John L. Kling, 1994. "Real Estate Returns and the Macroeconomy: Some Empirical Evidence from Real Estate Investment Trust," Journal of Real Estate Research, American Real Estate Society, vol. 9(3), pages 277-288. [Downloadable!]
  21. Sofia Dermisi, 2005. "Industry location patterns in metropolitan area office markets - Central Business Districts versus suburbs," Urban/Regional 0509007, EconWPA. [Downloadable!]
  22. Petros S. Sivitanides, 1997. "The Rent Adjustment Process and the Structural Vacancy Rate in the Commercial Real Estate Market," Journal of Real Estate Research, American Real Estate Society, vol. 13(2), pages 195-210. [Downloadable!]
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This page was last updated on 2009-11-22.

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