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Industrial Warehouse Rent Determinants in the Dallas/Fort Worth Area

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Abstract

This paper presents the first empirical analysis of the determinants of pooled variation in industrial warehouse rents. It examines industrial warehouse rents using data for seventeen quarterly periods in the Dallas/Fort Worth metroplex. M/PF Research Inc. provided the data. A random effects model is used to estimate the relationship between market rents for industrial properties and various independent variables. Rent per square foot is positively related to the number of grade high doors, and the annual change in net employment. Rent per square foot is negatively effected by ceiling height, percentage of office space, building age, and the presence of a sprinkler system. The results indicate that rents are significantly impacted by physical characteristics, location, and general market conditions. Additionally, there is evidence to suggest that the relationship between physical characteristics and rents is nonlinear.

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  • Richard J. Buttimer, Jr. & Ronald C. Rutherford & Ron Witten, 1997. "Industrial Warehouse Rent Determinants in the Dallas/Fort Worth Area," Journal of Real Estate Research, American Real Estate Society, vol. 13(1), pages 47-56.
    • Handle: RePEc:jre:issued:v:13:n:1:1997:p:47-56
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    References listed on IDEAS

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    1. Edwin S. Mills, 1992. "Office Rent Determinants in the Chicago Area," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 20(2), pages 273-287, June.
    2. G. Stacy Sirmans & John D. Benjamin, 1991. "Determinants of Market Rent," Journal of Real Estate Research, American Real Estate Society, vol. 6(3), pages 357-380.
    3. Hoag, James W, 1980. "Towards Indices of Real Estate Value and Return," Journal of Finance, American Finance Association, vol. 35(2), pages 569-580, May.
    4. Brent W. Ambrose, 1990. "An Analysis of the Factors Affecting Light Industrial Property Valuation," Journal of Real Estate Research, American Real Estate Society, vol. 5(3), pages 355-370.
    5. Fuller, Wayne A. & Battese, George E., 1974. "Estimation of linear models with crossed-error structure," Journal of Econometrics, Elsevier, vol. 2(1), pages 67-78, May.
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    Cited by:

    1. Robert Thompson & Sotiris Tsolacos, 2000. "Projections in the Industrial Property Market using a Simultaneous Equation System," Journal of Real Estate Research, American Real Estate Society, vol. 19(2), pages 165-188.
    2. Thomas O. Jackson, 2002. "Environmental Contamination and Industrial Real Estate Prices," Journal of Real Estate Research, American Real Estate Society, vol. 23(1/2), pages 179-200.
    3. John Henneberry & Tony McGough & Fotis Mouzakis, 2005. "The Impact of Planning on Local Business Rents," Urban Studies, Urban Studies Journal Limited, vol. 42(3), pages 471-502, March.
    4. Bob Thompson & Sotiris Tsolacos, 2001. "Industrial Land Values — A Guide to Future Markets?," Journal of Real Estate Research, American Real Estate Society, vol. 21(1/2), pages 55-76.
    5. Bob Thompson & Sotiris Tsolacos, 1999. "Rent Adjustments and Forecasts in the Industrial Market," Journal of Real Estate Research, American Real Estate Society, vol. 17(2), pages 151-168.
    6. Kang, Sanggyun, 2020. "Warehouse location choice: A case study in Los Angeles, CA," Journal of Transport Geography, Elsevier, vol. 88(C).
    7. Lim, Hyunwoo & Yoo, Eun-Hye & Park, Minyoung, 2018. "Warehouse rental market segmentation using spatial profile regression," Journal of Transport Geography, Elsevier, vol. 73(C), pages 64-74.
    8. Hyunwoo Lim & Minyoung Park, 2019. "Modeling the Spatial Dimensions of Warehouse Rent Determinants: A Case Study of Seoul Metropolitan Area, South Korea," Sustainability, MDPI, vol. 12(1), pages 1-17, December.
    9. Rosenthal, Stuart S. & Strange, William C. & Urrego, Joaquin A., 2022. "JUE insight: Are city centers losing their appeal? Commercial real estate, urban spatial structure, and COVID-19," Journal of Urban Economics, Elsevier, vol. 127(C).
    10. Kang, Sanggyun, 2020. "Why do warehouses decentralize more in certain metropolitan areas?," Journal of Transport Geography, Elsevier, vol. 88(C).
    11. Oliveira, Renata Lúcia Magalhães de & Dablanc, Laetitia & Schorung, Matthieu, 2022. "Changes in warehouse spatial patterns and rental prices: Are they related? Exploring the case of US metropolitan areas," Journal of Transport Geography, Elsevier, vol. 104(C).

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    JEL classification:

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

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