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Term Structures in the Office Rental Market in Stockholm

Author

Listed:
  • Gunnelin, Åke

    () (Swedish Institute for Financial Research)

  • Söderberg, Bo

    () (Royal institute of Technology)

Abstract

This paper contains an empirical study of the rental term structure in a property market that included a dramatic boom and bust cycle. The study is applied to office leases in commercial properties located in Stockholm CBD, Sweden. The time period under study is 1977-1991. The number of observations (lease contracts) that we were able to make full use of in the regression analyses is n=861. For seven out of fifteen years studied, a significant term structure was observed. The estimated hedonic rent equation was also used to construct an office rental index.

Suggested Citation

  • Gunnelin, Åke & Söderberg, Bo, 2002. "Term Structures in the Office Rental Market in Stockholm," SIFR Research Report Series 6, Institute for Financial Research.
  • Handle: RePEc:hhs:sifrwp:0006
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    File URL: http://www.sifr.org/PDFs/officemarkets.pdf
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    References listed on IDEAS

    as
    1. Grenadier, Steven R., 1995. "Valuing lease contracts A real-options approach," Journal of Financial Economics, Elsevier, vol. 38(3), pages 297-331, July.
    2. Patric H. Hendershott & Bryan D. MacGregor & Raymond Y.C. Tse, 2002. "Estimation of the Rental Adjustment Process," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 30(2), pages 165-183.
    3. Sivitanidou Rena, 1995. "Urban Spatial Variations in Office-Commercial Rents: The Role of Spatial Amenities and Commercial Zoning," Journal of Urban Economics, Elsevier, vol. 38(1), pages 23-49, July.
    4. Clapp, John M & Giaccotto, Carmelo, 1992. "Estimating Price Trends for Residential Property: A Comparison of Repeat Sales and Assessed Value Methods," The Journal of Real Estate Finance and Economics, Springer, vol. 5(4), pages 357-374, December.
    5. John D. Benjamin & J. Sa-Aadu & James D. Shilling, 1992. "Influence of Rent Differentials on the Choice between Office Rent Contracts with and without Relocation Provisions," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 20(2), pages 289-302.
    6. Patric H. Hendershott & Colin M. Lizieri & George A. Matysiak, 1999. "The Workings of the London Office Market," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 27(2), pages 365-387.
    7. Shilling, James D. & Sirmans, C. F. & Corgel, John B., 1987. "Price adjustment process for rental office space," Journal of Urban Economics, Elsevier, vol. 22(1), pages 90-100, July.
    8. Webb, R. Brian & Fisher, Jeffrey D., 1996. "Development of an Effective Rent (Lease) Index for the Chicago CBD," Journal of Urban Economics, Elsevier, vol. 39(1), pages 1-19, January.
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    Cited by:

    1. Clapham, Eric & Gunnelin, Åke, 2003. "Rental Expectations and the Term Structure of Lease Rates," SIFR Research Report Series 16, Institute for Financial Research.

    More about this item

    Keywords

    Rental Market; Office Rent; Lease Term; Term Structure; Property Market; Property Cycle; Rental Index;

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General

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