Vacancy Rates and the Future of Office Rents

Vacancy Rates and the Future of Office Rents This research confirms the existence of a strong vacancy rental adjustment mechanism in the market for office space, such as has been found in housing markets. Using national time‐series data, we find that real office rents drop approximately 2% annually, for every percentage point of “excess vacancy” in the market. We also find that the definition of “excess vacancy” has been trending upward over time. Using a recent vacancy forecast suggests that office income streams seem likely to decline in both real and nominal dollars over the next few years. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Real Estate Economics Wiley

Vacancy Rates and the Future of Office Rents

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Publisher
Wiley
Copyright
Copyright © 1988 Wiley Subscription Services, Inc., A Wiley Company
ISSN
1080-8620
eISSN
1540-6229
DOI
10.1111/1540-6229.00466
Publisher site
See Article on Publisher Site

Abstract

This research confirms the existence of a strong vacancy rental adjustment mechanism in the market for office space, such as has been found in housing markets. Using national time‐series data, we find that real office rents drop approximately 2% annually, for every percentage point of “excess vacancy” in the market. We also find that the definition of “excess vacancy” has been trending upward over time. Using a recent vacancy forecast suggests that office income streams seem likely to decline in both real and nominal dollars over the next few years.

Journal

Real Estate EconomicsWiley

Published: Dec 1, 1988

References

  • The Cyclic Behavior of the National Office Market
    Wheaton, Wheaton

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