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Apartment Rent, Concessions and Occupancy Rates

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Abstract

This paper examines the effects of rental concessions on apartment rent and occupancy rates. Using limited-information maximum likelihood estimation, equations for rent, occupancy, and concessions show that landlord-supplied rental concessions have a positive effect on both rent and occupancy rates. Rental concessions seem to provide the landlord a means to collect higher average rent and at the same time to increase occupancy rates. The results also indicate that a negative relationship exists between rent and occupancy rates and that certain amenities, services, and occupancy restrictions influence rent.

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  • G. Stacy Sirmans & C.F. Sirmans & John D. Benjamin, 1994. "Apartment Rent, Concessions and Occupancy Rates," Journal of Real Estate Research, American Real Estate Society, vol. 9(3), pages 299-312.
    • Handle: RePEc:jre:issued:v:9:n:3:1994:p:299-312
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    References listed on IDEAS

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    1. G. Stacy Sirmans & C.F. Sirmans & John D. Benjamin, 1989. "Determining Apartment Rent: The Value of Amenities, Services, and External Factors," Journal of Real Estate Research, American Real Estate Society, vol. 4(2), pages 33-44.
    2. Halvorsen, Robert & Pollakowski, Henry O., 1981. "Choice of functional form for hedonic price equations," Journal of Urban Economics, Elsevier, vol. 10(1), pages 37-49, July.
    3. Richard V. Butler, 1982. "The Specification of Hedonic Indexes for Urban Housing," Land Economics, University of Wisconsin Press, vol. 58(1), pages 96-108.
    4. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    5. James R. Frew & G. Donald Jud, 1988. "The Vacancy Rate and Rent Levels in the Commercial Office Market," Journal of Real Estate Research, American Real Estate Society, vol. 3(1), pages 1-8.
    6. Denton Marks, 1984. "The Effect of Rent Control on the Price of Rental Housing: An Hedonic Approach," Land Economics, University of Wisconsin Press, vol. 60(1), pages 81-94.
    7. Karl L. Guntermann & Stefan Norrbin, 1987. "Explaining the Variability of Apartment Rents," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 15(4), pages 321-340, December.
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    Cited by:

    1. Paul K. Asabere & Forrest E. Huffman, 1996. "Thoroughfares and Apartment Values," Journal of Real Estate Research, American Real Estate Society, vol. 12(1), pages 9-16.

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    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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