The Price Implications of "Standing Out"

Prashant Das, Patrick Smith and Paul Gallimore

ERES from European Real Estate Society (ERES)

Abstract: Conspicuous features of a commercial real estate asset may qualify it either as “atypical” or “trophy.” Past studies on this topic are fragmented and suggest conflicting price impacts of the two qualities. This is the first study to robustly measure the price implication of conspicuous commercial assets. We geospatially enrich a dataset of nearly 5000 hotel transactions consolidated from two independent sources. We detect asymmetric impact across locally versus nationally superlative features. In particular, locally largest hotels are discounted while the nationally largest ones enjoy premiums. High status of the locality leads to significant price premium after controlling for submarket effects. Also, news coverage is associated with significant price premium.

JEL-codes: R3 (search for similar items in EconPapers)
Date: 2016-01-01
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Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:eres2016_7

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