An Investment Model of the Demand and Supply For Industrial Real Estate
AbstractA recent inventory of industrial building in fifty-two major metropolitan areas of the country indicates that most such space is either owner occupied or single tenant. This suggests that the production of industrial space may be modeled as a firm "investment" decision. Using the completion date of each inventoried building, we construct a time series of plant completions that moves similarly to some other national investment data. We are able to successfully estimate an "accelerator" type model of plant deliveries, driven by movements in employment and the after-tax cost of corporate capital. Our model can be used to estimate a measure of excess plant capacity in the market, and historic values of this measure do move parallel to some recent industrial vacancy data. Copyright American Real Estate and Urban Economics Association.
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Bibliographic InfoArticle provided by American Real Estate and Urban Economics Association in its journal Real Estate Economics.
Volume (Year): 18 (1990)
Issue (Month): 4 ()
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- Steven H. Ott & Timothy J. Riddiough & Ha-Chin Yi, 2008. "On Demand: Cross-Country Evidence From Commercial Real Estate Asset Markets," International Real Estate Review, Asian Real Estate Society, vol. 11(1), pages 1-37.
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- Timothy Riddiough & Paul Childs & Steven Ott, 2001. "Noise, Real Estate Markets, and Options on Real Assets: Applications," Wisconsin-Madison CULER working papers 01-06, University of Wisconsin Center for Urban Land Economic Research.
- John Benjamin & G. Donald Jud & Daniel T. Winkler, 1998. "The Supply Adjustment Process in Retail Space Markets," Journal of Real Estate Research, American Real Estate Society, vol. 15(3), pages 297-308.
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