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Situations Vacant: A Conceptual Framework for Commercial Real Estate Vacancy

Author

Listed:
  • Kevin Muldoon-Smith
  • Paul Greenhalgh

Abstract

Commercial real estate vacancy is a key indicator of property market efficiency, economic performance and urban resilience. However, there has been little conceptual reflection into the abstract notion of vacancy beyond binary distinctions of natural and structural vacancy. Although useful simplifying meta-concepts, neither accounts for the internal complexity and imperfection that permeates real commercial property markets. Consequently, the objective of this article is to outline a conceptual framework that describes vacancy across the commercial real estate building life-cycle – from initial construction to final demolition and redevelopment. The originality of the research rests in its utility as the first known holistic examination of commercial real estate vacancy beyond that of an abstract economic factor, while its value is explicit in the conceptual typology which can be used by researchers interested in market imperfections and consequent interventions.

Suggested Citation

  • Kevin Muldoon-Smith & Paul Greenhalgh, 2017. "Situations Vacant: A Conceptual Framework for Commercial Real Estate Vacancy," ERES eres2017_341, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2017_341
    as

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    References listed on IDEAS

    as
    1. Carsten Lausberg, 2008. "The Rising Natural Vacancy Rate In The German Office Market And Its Effects On Real Estate Finance," ERES eres2008_190, European Real Estate Society (ERES).
    2. repec:arz:wpaper:eres2008-190 is not listed on IDEAS
    3. Paul Greenhalgh & Mary Lou Downie & Peter Fisher & Mike Barke, 2003. "Grease to the Wheel or a Spanner in the Works? An Investigation of Office and Industrial Occupier Displacement and Property Market Filtering in Tyne and Wear Using the Chaining Technique," Regional Studies, Taylor & Francis Journals, vol. 37(4), pages 381-394.
    4. Raymond Y. C. Tse & James R. Webb, 2003. "Models of Office Market Dynamics," Urban Studies, Urban Studies Journal Limited, vol. 40(1), pages 71-89, January.
    5. Miceli, Thomas J. & Sirmans, C.F., 2013. "Efficiency rents: A new theory of the natural vacancy rate for rental housing," Journal of Housing Economics, Elsevier, vol. 22(1), pages 20-24.
    6. Sara Jane Wilkinson & Richard Reed, 2011. "Examining and quantifying the drivers behind alterations and extensions to commercial buildings in a central business district," Construction Management and Economics, Taylor & Francis Journals, vol. 29(7), pages 725-735, May.
    7. William C. Wheaton, 1999. "Real Estate “Cycles”: Some Fundamentals," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 27(2), pages 209-230, June.
    8. Paul Greenhalgh, 2008. "An Examination of Business Occupier Relocation Decision Making: Distinguishing Small and Large Firm Behaviour," Journal of Property Research, Taylor & Francis Journals, vol. 25(2), pages 107-126, November.
    9. Neil Crosby & Steven Devaney, 2006. "Depreciation And Its Impact On The Total Return Of Uk Commercial Real Estate, 1994-2003," ERES eres2006_162, European Real Estate Society (ERES).
    10. Robert A. Beauregard, 2005. "The Textures of Property Markets: Downtown Housing and Office Conversions in New York City," Urban Studies, Urban Studies Journal Limited, vol. 42(13), pages 2431-2445, December.
    11. Andrew E. Baum, 1993. "Quality, Depreciation, and Property Performance," Journal of Real Estate Research, American Real Estate Society, vol. 8(4), pages 541-566.
    12. Daniel A. Hagen & Julia L. Hansen, 2010. "Rental Housing and the Natural Vacancy Rate," Journal of Real Estate Research, American Real Estate Society, vol. 32(4), pages 413-434.
    13. Neil Crosby & Steven Devaney, 2006. "Depreciation and its Impact on the Total Return of UK Commercial Real Estate, 1994-2003," Real Estate & Planning Working Papers rep-wp2006-05, Henley Business School, University of Reading.
    14. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, December.
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    18. Hilde Remøy & Philip W. Koppels & Hans de Jonge, 2009. "Structural Vacancy of Office Buildings: The Influence of Building- and Location- Characteristics in the Case of Amsterdam," ERES eres2009_157, European Real Estate Society (ERES).
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    More about this item

    Keywords

    Building life-cycle; Commerical real estate; Natural vacancy; Resilience; Structural vacancy;
    All these keywords.

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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    This paper has been announced in the following NEP Reports:

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