A factor analysis of landlords’ and retail trade tenants’ different beliefs in lease negotiations

Berndt Lundgren (), Cecilia Hermansson, Filip Gyllenberg () and Johan Koppfeldt ()
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Berndt Lundgren: Department of Real Estate and Construction Management, Royal Institute of Technology, Postal: Teknikringen 10B, 100 44 Stockholm, Sweden
Filip Gyllenberg: Department of Real Estate and Construction Management, Royal Institute of Technology, Postal: Teknikringen 10B, 100 44 Stockholm, Sweden,
Johan Koppfeldt: Department of Real Estate and Construction Management, Royal Institute of Technology, Postal: Teknikringen 10B, 100 44 Stockholm, Sweden

No 22/7, Working Paper Series from Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance

Abstract: Previous research on factors that affect real estate rent levels have focused on the importance of, e.g., lease structure, the effect of location, size, and anchor or non-anchor tenants. To add to the knowledge of the research community, we investigate how retailers’ and real estate landlords’ views differ on factors they deem important in negotiating rent by investigating differences in their beliefs, and we also investigate the impact of education. We use a websurvey sent to Swedish landlords and retail tenants, and answered by 156 respondents (106 complete answers). With principal component analysis (PCA), the number of variables are reduced and the factors deemed important are established. Seven underlying dimensions in the rent negotiation process were labeled: Regional and industrial growth, Rent and vacancies, GDP growth, E-commerce, Customer focus, External information, and Trust. Landlords were found to put more weight on the importance of Regional and industrial growth, E-commerce, Customer focus and Trust than do tenants. We also find significant educational differences for the following factors: Rent and vacancies; E-commerce; and Customer focus.

Keywords: rent negotiation; principal component analysis; landlords; retail tenants; trust; education (search for similar items in EconPapers)
JEL-codes: C38 L81 L85 R30 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2022-06-22
New Economics Papers: this item is included in nep-dem and nep-ure
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