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Bargaining Strength and Property Class in Office Markets

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  • Peter Colwell

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  • Henry Munneke

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Abstract

This paper examines the influence of bargaining power and property class on the prices of heterogeneous goods. Specifically, it explores the impact of buyer and seller characteristics on the transaction prices of office properties. The empirical model is based on the work of Harding, Rosenthal, and Sirmans ( 2003 ), which developed a method to distinguish between the impact of buyer and seller attributes on bargaining power and the choice of otherwise unidentified price effects (i.e., property class) in the context of hedonic price models. The data set contains information on transaction prices of office properties in Cook, DuPage, and Lake Counties, Illinois from 1995 to 1997. The results reveal systematic differences in bargaining power and property class for certain groups of buyers and sellers contained within the sample. Copyright Springer Science + Business Media, LLC 2006

Suggested Citation

  • Peter Colwell & Henry Munneke, 2006. "Bargaining Strength and Property Class in Office Markets," The Journal of Real Estate Finance and Economics, Springer, vol. 33(3), pages 197-213, November.
  • Handle: RePEc:kap:jrefec:v:33:y:2006:i:3:p:197-213 DOI: 10.1007/s11146-006-9982-6
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    References listed on IDEAS

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    1. Fisher, Jeffrey D & Geltner, David M & Webb, R Brian, 1994. "Value Indices of Commercial Real Estate: A Comparison of Index Construction Methods," The Journal of Real Estate Finance and Economics, Springer, vol. 9(2), pages 137-164, September.
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    6. Chambers, Daniel N., 1992. "The racial housing price differential and racially transitional neighborhoods," Journal of Urban Economics, Elsevier, vol. 32(2), pages 214-232, September.
    7. Gunnelin, Ake & Soderberg, Bo, 2003. "Term Structures in the Office Rental Market in Stockholm," The Journal of Real Estate Finance and Economics, Springer, vol. 26(2-3), pages 241-265, March-May.
    8. Val E. Lambson & Grant R. McQueen & Barrett A. Slade, 2004. "Do Out-of-State Buyers Pay More for Real Estate? An Examination of Anchoring-Induced Bias and Search Costs," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 32(1), pages 85-126, March.
    9. 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..
    10. John P. Harding & Stuart S. Rosenthal & C. F. Sirmans, 2003. "Estimating Bargaining Power in the Market for Existing Homes," The Review of Economics and Statistics, MIT Press, vol. 85(1), pages 178-188, February.
    11. Yinger, John, 1986. "Measuring Racial Discrimination with Fair Housing Audits: Caught in the Act," American Economic Review, American Economic Association, vol. 76(5), pages 881-893, December.
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    13. John P. Harding & John R. Knight & C.F. Sirmans, 2003. "Estimating Bargaining Effects in Hedonic Models: Evidence from the Housing Market," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 31(4), pages 601-622, December.
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    15. Munneke, Henry J & Slade, Barrett A, 2000. "An Empirical Study of Sample-Selection Bias in Indices of Commercial Real Estate," The Journal of Real Estate Finance and Economics, Springer, vol. 21(1), pages 45-64, July.
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    1. repec:eee:jhouse:v:36:y:2017:i:c:p:8-24 is not listed on IDEAS
    2. Tao Chen & John P. Harding, 2016. "Changing Tastes: Estimating Changing Attribute Prices in Hedonic and Repeat Sales Models," The Journal of Real Estate Finance and Economics, Springer, vol. 52(2), pages 141-175, February.
    3. Martijn (M.I.) Droes & Boris Ziermans & Philip Koppels, 2017. "Information Asymmetry, Lease Incentives, and the Role of Advisors in the Market for Commercial Real Estate," Tinbergen Institute Discussion Papers 17-106/IV, Tinbergen Institute.
    4. David Ling & Milena Petrova, 2008. "Avoiding Taxes at Any Cost: The Economics of Tax-Deferred Real Estate Exchanges," The Journal of Real Estate Finance and Economics, Springer, vol. 36(4), pages 367-404, May.
    5. Franco, Sofia & Cutter, Bowman & DeWoody, Autumn, 2010. "Do Parking Requirements Significantly Increase The Area Dedicated To Parking? A Test Of The Effect Of Parking Requirements Values In Los Angeles County," MPRA Paper 20403, University Library of Munich, Germany.

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