Local and national determinants of office vacancies
Article Abstract:
More than three decades of semiannual vacancy-rate data for 20 of the largest office markets in the US are used to identify the factors affecting office market vacancies. Three significant findings are obtained. The first is that the level of equilibrium mostly depends on local factors and not on national factors. The second result shows that local deviations from equilibrium, which are representative of the integration across markets, are the result of random shocks. More specifically, significant contemporaneous correlations of shocks were discovered across most cities. The unexpected, not the expected, is found to have an impact on the market. Finally, the findings reveal that there is a dramatic level of persistence in all markets. There is little proof to support the presence of a structural break in the vacancy model during the 1980s.
Publication Name: Journal of Urban Economics
Subject: Government
ISSN: 0094-1190
Year: 1995
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Flexibility and tenant mix in real estate projects
Article Abstract:
A model where owners select the optimal mix of tenants is developed. One of the three important characteristics of the model is the stochastic variation of relative rent levels for different tenant types over time. The second key feature is the interrelation of tenant demands for space and their tendency to generate positive or negative externalities for other tenants. The third element of the model is the inducement of adjustment-cost payment if the standing mix is modified. The intertemporally optimal tenant mix policy is then obtained and examined using the option pricing theory. The factors that affect the level of landlord carefulness in modifying the current mix are identified. Lastly, the value of the optimal policy is decomposed into two forms of flexibility: dynamic flexibility and static flexibility.
Publication Name: Journal of Urban Economics
Subject: Government
ISSN: 0094-1190
Year: 1995
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Rent control, rental housing supply, and the distribution of tenant benefits
Article Abstract:
Tenants in rent controlled housing are negatively affected when higher prices are implemented in the uncontrolled sector. Therefore, most tenants in rental units with controls would be better off economically if the controls had never begun.
Publication Name: Journal of Urban Economics
Subject: Government
ISSN: 0094-1190
Year: 2000
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