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A STRUCTURAL MODEL FOR THE DEMAND FOR LEASE RENEWALS IN THE U.S. LEASING INDUSTRY

Gustavo Gomez-Sorzano

Applied Econometrics and International Development, 2006, vol. 6, issue 1

Abstract: I estimate a theoretically and statistically satisfying model to account for the demand for lease renewals for one of the largest Real Estate Investment Trust companies (REIT) in the U.S. The variables that together account for ninety eight percent of the variation in the demand for lease renewals are, one-period time lag of the dependent variable (lease renewals), one period time lag of the Federal Funds interest rate end of month, the ratio between total non-farm employment and total construction permits authorized, the total non-farm employment, one period time lag of this REIT’S total concessions; the personal consumption expenditures – household operation, one period time lag of this REIT’S economic occupancy, one period time lag of this REIT’S net rental income, and this REIT apartment units occupied. The application of the model for out of the sample projections shows a forecasting accuracy of 99%.

Keywords: REIT; demand for lease renewals (search for similar items in EconPapers)
JEL-codes: C22 C51 C53 R21 (search for similar items in EconPapers)
Date: 2006
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