Do Market Rents Reflect the Value of Special Building Features? The Case of Office Atriums

John Doiron, James D. Shilling () and C.F. Sirmans ()
Additional contact information
John Doiron: Appraisal Services 606 Colonial Drive Suite B P.O.Box 66965 Baton Rouge, Louisiana 70896
James D. Shilling: Department of Real Estate and Urban Land Economics School of Business University of Wisconsin, Madison Madison, Wisconsin 53706, http://wiscinfo.doit.wisc.edu/bschool/dept/re.htm
C.F. Sirmans: Department of Finance School of Business University of Connecticut Storrs, Connecticut 06269, http://www.sba.uconn.edu/index.htm

Journal of Real Estate Research, 1992, vol. 7, issue 2, 147-156

Abstract: Office buildings, hotels, and even residential apartment buildings often contain large amounts of space used for public purposes. An example is provided by buildings with atriums. In this article we examine the trade-off between leasable area in office buildings and the amount of the structure's space that is used for an atrium. The insights of our model suggest that the optimal level of planned atrium space increases with a decrease in unit development cost and decreases with an increase in market rents. The model is used to specify a hedonic rent function for comparable office buildings with and without atriums. This hedonic model allows us to test the extent to which charges for amenities such as atrium space are passed through to tenants in the form of higher rents.

JEL-codes: L85 (search for similar items in EconPapers)
Date: 1992
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Citations: View citations in EconPapers (10)

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