Keywords

office rent determinants, market cycle analysis, time-varying parameters

Abstract

This article empirically examines office rent determinants in distinct periods of a market cycle. The study uses a dataset of office properties located in a large metropolitan area and spanning a six-year period. During this period, office rents experienced a significant decline and recovery. A time-varying parameter rent index identifies three distinct periods of the cycle: decline, trough and recovery. Tests of structural change conclude that market participants value the determinants of office rents differently during the periods. A microexamination of each rent determinant over the periods of the market cycle provides a greater understanding of how rents vary over time and the factors that influence them.

Original Publication Citation

Slade, B., 2000, Office Rent Determinants during Market Decline and Recovery, Journal of Real Estate Research, 20:3, pp. 357 – 380. (Best Paper Award).