Designer Office Buildings: An Evaluation of the Price Impacts of Signature Architects

The quality of a building's architectural design can be transmitted to its price through a number of channels. There are complex interactions between the different dimensions of brand (of the architect and the building), design (aesthetic and functional) and value (exchange/owner, user/operator and neighbour/social). This paper addresses a specific aspect of this topic: whether office buildings designed by signature architects in the US achieve rental and price premiums compared to buildings designed by non-signature architects. Our aim is to test the ability of signature architects to add value to office buildings. We focus on markers of excellence in architectural design by using data on two of the most prestigious prizes, the Pritzker Prize and the Gold Medal awarded by the American Institute of Architects. We then create a sample of commercial office buildings designed by winners of these prestigious prizes drawing on CoStar's comprehensive national database. Hedonic regression and a logit model are applied to estimate the various price determinants. While the first approach measures the typical price differential over the typical building in a particular market over a specific timeframe, the second identifies a potential price differential over a set of buildings closely matched on important characteristics (such as age, size, location etc).