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Hidden Vacancy Rate as a Part of Office Market Dynamics in Selected Polish Cities

Author

Listed:
  • Nowak Krzysztof

    (Faculty of Economics, University of Rzeszów)

Abstract

The hidden vacancy rate reflects the adjustments of the market vacancy rate that may occur in the future, in the event of a change in market conditions. Its occurrence results from the fact that the current level of rented office space reflects the demand based on past levels of rent and past predictions of changes in the tenants’ demand for space during the term of the lease. Thus, the level of total, occupied office space at given moment does not result from demand based on the current market rent. This is the result of the duration of lease agreements concluded for more than one period. The hidden vacancy rate is also related to the costs of searching for office space that meets the specific criteria of tenants, removal costs and office space adaptation costs. The hidden vacancy rate cannot be observed in the market, but can be determined based on available market data.

Suggested Citation

  • Nowak Krzysztof, 2020. "Hidden Vacancy Rate as a Part of Office Market Dynamics in Selected Polish Cities," Real Estate Management and Valuation, Sciendo, vol. 28(1), pages 1-12, March.
    • Handle: RePEc:vrs:remava:v:28:y:2020:i:1:p:1-12:n:1
    DOI: 10.2478/remav-2020-0001
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    References listed on IDEAS

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    More about this item

    Keywords

    office space market; hidden vacancy rate; vacancy rate and rent;
    All these keywords.

    JEL classification:

    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • R33 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Nonagricultural and Nonresidential Real Estate Markets
    • R39 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other

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