IDEAS home Printed from https://ideas.repec.org/a/jre/issued/v36n32014p319-340.html
   My bibliography  Save this article

The Commercial Office Market and the Markup for Full Service Leases

Author

Listed:
  • Jonathan A. Wiley

    (Georgia State University)

  • Yu Liu

    (Georgia State University)

  • Dongshin Kim

    (Georgia State University)

  • Tom Springer

    (Clemson University)

Abstract

Because landlords assume all of the operating expense risk, rents for gross leases exceed those for net leases. The markup, or spread, for gross leases varies between properties and across markets. Specifically, the markup is expected to increase with the cost of real estate services at the property, and to be influenced by market conditions. A matching procedure is applied to measure the services markup as the percentage difference between the actual rent on a gross lease relative to the actual rent on a net lease in an office building with similar property and locational characteristics. Using a data set of 3,548 gross lease observations at office properties in six major U.S. office markets, we estimate a model for the determinants of the gross rent markup and find statistically significant evidence supporting the posited effects.

Suggested Citation

  • Jonathan A. Wiley & Yu Liu & Dongshin Kim & Tom Springer, 2014. "The Commercial Office Market and the Markup for Full Service Leases," Journal of Real Estate Research, American Real Estate Society, vol. 36(3), pages 319-340.
  • Handle: RePEc:jre:issued:v:36:n:3:2014:p:319-340
    as

    Download full text from publisher

    File URL: http://pages.jh.edu/jrer/papers/pdf/past/vol36n03/9829-02.319_340.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    More about this item

    JEL classification:

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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jre:issued:v:36:n:3:2014:p:319-340. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: JRER Graduate Assistant/Webmaster (email available below). General contact details of provider: http://www.aresnet.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.