Commercial Property Values Research Articles

Trend of Macroeconomic Factors Influencing Commercial Property in Abuja, Nigeria

In recent time changes in rent invariably affect every type of real estate although in varying degrees. The aimed of this paper is to investigate the trend of macroeconomic factors influencing commercial property in Abuja. The study adopted quantitative design and questionnaire survey was used for data collection. The study adopted simple random sampling technique and SPSS software version 22 was used for data analysis and the results were presented in tables. Commercial properties under the management of Estate Surveyors and Valuation in Abuja metropolis was served as target population. The study indicates that the macroeconomic indicators considered in the study, namely gross domestic product (GDP), inflation rate, interest rate and exchange rate are all increasing, but at different rates. This suggests that the economy is growing, but that there are also some inflationary pressures and that the central bank is tightening monetary policy in an attempt to bring inflation under control. The rising exchange rate suggests that the domestic currency is becoming more valuable relative to other currencies, which can make exports more expensive and imports cheaper. However, the fact that the indicators are rising at different rates suggests that the growth is not uniform and that there are some challenges that need to be addressed. For example, the rising inflation rate suggests that there is some pressure on prices. This could be due to a number of factors, such as increased demand for goods and services, supply chain disruptions, or rising energy costs. The central bank may need to take steps to address inflation, such as raising interest rates. Macroeconomic indicators significantly influence rental value of commercial properties causing about 73.7% change in rental value of commercial properties. Central banks should monitor inflation closely and take steps to bring it under control if necessary. This could involve raising interest rates or other monetary policy tools. Policymakers should work to address the underlying causes of inflation and unemployment. This could involve measures such as increasing competition in the economy, improving education and training programs, or investing in research and development.

부동산 임대료의 현금 흐름에 대한 리스크 분석

Investment decisions in real estate development projects need to be made more flexibly in uncertain environmental changes such as legal and economic conditions in competitive business in the rapidly changing real estate market. In analyzing the economic feasibility of real estate development projects, the valuation method of the investment plans using the traditional NPV method is evaluated based on a fixed standard planned in advance. Therefore, it was not possible to flexibly cope with uncertain changes in the business environment. In the face of growing uncertainty in the real estate development market, a more sophisticated evaluation method that can evaluate investment plans is needed according to changes in the market. Accordingly, the valuation of real estate development projects was analyzed using real options approach. In this study, an analytical framework was presented to evaluate the return value of commercial rental properties from a financial engineering perspective and to analyze the risk of rent cash flows. Real estate rate assessment methods, risk analysis methods, rent derivatives valuation methods, and real estate option valuation methods were analyzed for uncertainty in rent, tenant residence, vacancy, and real estate price using Monte Carlo simulation. In terms of financial engineering probability models, research in the field of valuation and risk analysis of real estate is now in its infancy, and the framework for analysis itself is not sufficiently established. Based on these studies, various analysis methods will be developed, and in this sense, this study can play a fundamental role.

Analyzing the effects of walkable environments on nearby commercial property values based on deep learning approaches

Interest in the economic effects of walkable environments is growing as the multidimensional benefits of walkability can be capitalized into surrounding property values. Commercial properties may be more sensitive to the economic effects of walkability compared to other types of properties due to their distinct attributes, but not many studies have investigated the relationships between walkable environments and commercial property values. Additionally, previous studies identified walkable environments on a neighborhood-scale, not at a meso- and micro-scale. This study fills these gaps by examining the effects of multifaceted walkable environments on commercial property values in Seoul, Korea. Based on sales transaction data between 2017 and 2019, we employed the hedonic price model to clarify the relationships between walkable environments and commercial property values. This study estimated walkable environments using semantic segmentation based on Google Street View images. Furthermore, we accounted for commercial submarkets to identify how the impacts of walkability vary across areas stratified by living population density. The results show that various walkable environments positively affect nearby commercial property values. Additionally, these effects vary across commercial submarkets' heterogeneity. Our findings provide a variety of suggestions for encouraging the creation of walkable environments and increasing the economic benefits of commercial properties.

Organizational Ecology's Contagion Growth Perspective in the Study of Standalone Charter Schools in New York City

This study aims to examine standalone charters in terms of organizational ecology's contagion growth that spread across New York City's neighborhoods from 2000 to 2007. Spatial autoregressive models and geographic information systems reveal that the density dependence that occurs from one standalone charter location to its nearby neighborhoods is associated with low commercial property values, renter-occupied housing units, African-American and Hispanic population, school-age children, and income measures. Among nonprofit types, education- and religious-related nonprofits appear to be among the most consistent significant variables. This study suggests that promising directions for future research centered on ecosystems of charter school growth are context-dependent.

Rethinking development and redistribution policy: Testing the local expenditure assumption using the Community Development Block Grant program

ABSTRACT Local governments make important public service decisions based on a critical assumption from urban political economy scholarship that development activities lead to economic growth, while redistributive activities do not. Using the Community Development Block Grant (CDBG) program, we test this local expenditure assumption by exploring the differential effectiveness of CDBG activities on individual and neighboring residential and commercial property values. To this end, we challenge the notion that development policies frequently improve economic returns while redistributive policies do not. We analyze the economic impact of 16 different CDBG activities on more than seven million properties between 2004 and 2017 in Dallas County, Texas. We find strong evidence that, contrary to conventional wisdom, redistributive policies can yield positive economic returns while development expenditures have mixed results. These findings have important implications for local governments seeking to grow their economy equitably.

Quantifying the Impact of Light Rail Transit on Commercial Property Values: New Evidence From Greater Kuala Lumpur, Malaysia

Evidence shows that improving accessibility through investment in public transport, such as urban rail transit, can have a positive impact on land values and subsequently on property values. This paper, therefore, presents empirical results on the impact of proximity to the nearest Kelana Jaya light rail transit (LRT) station on commercial property values in Greater Kuala Lumpur, Malaysia. Using the hedonic pricing model, the paper attempts to quantify these effects. The sample consists of 399 office transaction data for the years 2014 and 2018, marking more than a decade of Kelana Jaya LRT line operation in the region. The results show that an office unit located within a 400 m radius of the nearest Kelana Jaya LRT station enjoys the highest premium, reaching about 0.637%, which, at the mean, is MYR802,620 (USD200,655). However, the premium appears to decrease rapidly for an office unit located within a radius of 401–800 m from the nearest Kelana Jaya LRT station, reaching 0.232% (MYR292,320 or USD73,080 of the mean office price). From the results of this study, it can be concluded that this paper contributes to the growing literature on the positive relationship between urban rail transit and commercial property values. More importantly, this paper provides the necessary evidence for the potential implementation of a land value capture policy as an alternative source of revenue to fund or partially fund urban rail transit in Greater Kuala Lumpur, which is presently absent.

DOES MACHINE LEARNING PREDICTION DAMPEN THE INFORMATION ASYMMETRY FOR NON-LOCAL INVESTORS?

In this study, we examine the prediction accuracy of machine learning methods to estimate commercial real estate transaction prices. Using machine learning methods, including Random Forest (RF), Gradient Boosting Machine (GBM), Support Vector Machine (SVM), and Deep Neural Networks (DNN), we estimate the commercial real estate transaction price by comparing relative prediction accuracy. Data consist of 19,640 transaction-based office properties provided by Costar corresponding to the 2004–2017 period for 10 major U.S. CMSA (Consolidated Metropolitan Statistical Area). We conduct each machine learning method and compare the performance to identify a critical determinant model for each office market. Furthermore, we depict a partial dependence plot (PD) to verify the impact of research variables on predicted commercial office property value. In general, we expect that results from machine learning will provide a set of critical determinants to commercial office price with more predictive power overcoming the limitation of the traditional valuation model. The result for 10 CMSA will provide critical implications for the out-of-state investors to understand regional commercial real estate market.

Transit Stations and Commercial Property Values: A Case Study with Policy and Land-Use Implications

There is little research about the association between rail transit station proximity and commercial property values. There is even less research on the role of public policy in influencing commercial property markets near transit stations without resorting to supply-side constraints. The research reported in this article helps close these gaps in research.This article develops a theory on commercial property value with respect to both transit station proximity and the role of policies that encourage commercial development around transit stations without discouraging commercial development elsewhere. The theory is applied to the universe of commercial property sales in the area of Atlanta known as “Midtown, “ which is located about 1 kilometer north of the downtown edge. Midtown is served by three heavy rail transit stations operated by the Metropolitan Atlanta Rapid Transit Authority (MARTA). To encourage development around MARTA stations, Atlanta waives parking and floor area ratio requirements in Special Public Interest Districts (SPIDs) located around rail stations. Research shows that commercial property values are influenced positively by both access to rail stations and policies that encourage more intensive development around those stations. This article explores both theoretical and policy implications.

The Impact of Hiawatha Light Rail on Commercial and Industrial Property Values in Minneapolis

The impact of proximity to transit on property values has become a key question in the debate on the relationships between public infrastructure investment and economic development. The focus has been on value captured by residential properties, with far fewer studies examining non-residential properties. Furthermore, few studies differentiate the effect of rail access and the effect of access to major interactions that later become station sites, and even fewer addressed the gradient of the accessibility effect. Based on the economic theory of firm location choice, this study develops hedonic pricing models to assess the value-added of the Hiawatha LRT on commercial and industrial properties, using data on properties sold before and after its completion. The results show that the LRT has induced a significant price premium for properties nearby and that the impact extends to almost 0.9 miles away from LRT stations.

Holding back the storm: Dam capitalization in residential and commercial property values

Large-scale flooding is becoming increasingly common due to prolonged and intensive rainfall caused by climate change. Communities have mitigated this risk by building flood protection, though it is unclear whether residents are aware of these public works or the protection they confer. We provide insight on this matter by examining whether apartment, commercial, and single-family home values responded to the completion of the Gokayama Dam in Fukuoka Prefecture, Japan. Using listing data between 2015 and 2019, we find apartments downstream from the Gokayama Dam experienced a 1.8% price increase relative to apartments in other floodplains after Typhoon Prapiroon hit western Japan and tested the dam. Renters used the natural disaster as a learning experience to update their perceptions of flood risk as opposed to the completion of the dam, suggesting a possible disconnect between perceptions of flood risk and objective risk. Higher price premiums are also observed in first floor units, units closer to rivers, and in areas where floodwaters are expected to exceed 2 m, while rental units designed as temporary housing received no premium. Finally, we find the capitalized gains from the apartment rental market are small in comparison to premiums paid by homeowners and commercial renters, where prices increased by 11.7% and 9.2% respectively. Taken altogether, the Gokayama Dam provides $146.5 million in downstream benefits each year, though it is unclear how long these price effects will last.

Closed for mafia: Evidence from the removal of mafia firms on commercial property values

AbstractUsing a sample of almost 7000 Italian municipalities from 2002 to 2019, we investigate how the removal of mafia‐infiltrated firms affects commercial sale and rental prices. We conjecture that targeting mafia businesses leads to a reduction in local disamenities and an increase in the demand for commercial properties. Applying the latest methodologies based on difference‐in‐differences approaches, we show that antimafia policies aimed at confiscating and reassigning mafia firms have positive spillover effects on commercial real estate prices, driving values upward by about 4%. This is especially true for small–medium municipalities in mafia‐ridden provinces. The evidence we provide supports the enforcement of antimafia policies with an economic content, as they pose a threat to criminal financial interests and curb the mafia influence in the market.

A systematic literature review of the effects of coworking spaces on the socio-cultural and economic conditions in peripheral and rural areas

PurposeThe literature on coworking spaces (CSs) is growing fast; notably, this topic has attracted a wide range of contributions from various disciplines during the past years. Although CSs first appeared in major cities, small towns and rural areas are also becoming attractive. To date, no literature review has systematically studied the effects of such collaborative-flexible new working spaces proliferating in non-urban areas. Therefore, this paper aims to present a systematic literature review about the effects of coworking spaces located in peripheral and rural areas.Design/methodology/approachThe methodological approach is based on the Preferred Reporting Items for Systematic Reviews and Meta-Analyses, also known as PRISMA. Following the PRISMA checklist items, this study provides different aspects and identifies indicators from various cross-studies published in 10 years (2011–2021).FindingsResults show that, in the past decade, Europe has recorded the highest number of publications on the topic of coworking spaces (CSs); the main research focus was on spatial planning. CSs foster communities of specialized and high-skilled workers, attract businesses and venture capitalists and may accelerate urban revitalisation processes. The regeneration of spaces can positively affect the value of commercial properties in the vicinity and attract developers. Moreover, by establishing communities and networks beyond the working life, coworking was found to reduce depopulation and even foster the influx of non-urban areas.Practical implicationsThe findings of this study can be transferred to policymakers to be considered in designing tailored policies in non-urban areas and also places-that-don't matter.Originality/valueBy date, this study is the first attempt to conduct a systematic review of the literature on the effects of coworking spaces in peripheral and rural areas. This is important since this typology of flexible-collaborative working space is gaining public attention, especially during the pandemic and the development of such spaces in non-urban areas.

Analyzing the Effects of Walkable Environments on Nearby Commercial Property Values Based on Deep Learning Approaches

Analyzing the Effects of Walkable Environments on Nearby Commercial Property Values Based on Deep Learning Approaches

Analyzing the Influence of Metro Stations on Commercial Property Values in Delhi: A Hedonic Approach

Abstract The effect of proximity to a transit system on property values has become a key issue of debate regarding public infrastructure and economic development. This article aims to examine the impact of selected stations along the Blue line of Delhi Mass Rapid Transit System (MRTS) on commercial property prices. The research analyzed 1,413 commercial property parcels sold before and after the commissioning of Blue line in 2005. Hedonic Price Analysis (HPA) was used to estimate the effects of proximity to the metro rail on commercial property values. The method was applied to two time periods, i.e., from 2000-2004 and 2005-2008, coinciding with planning and construction (pre-commissioning phase and the operation phase (post-commissioning phase) of metro rail using actual sale prices of commercial units. The results indicate that a station node shows a negative trend during the planning and construction period. However, the operation period has produced a significant price premium associated with commercial properties, connected with improved accessibility. The coefficients indicate that MRTS has induced an increase in prices from INR 732.80 to INR 246.19, and its radius of impact covers an area of approximately 1/2 km from the stations. The methodology and results provide insight with a specific focus on commercial real estate values in other metropolitan cities developing and expanding MRTSs.

The impact of sports stadiums on localized commercial activity: Evidence from a Business Improvement District

AbstractThis analysis exploits the relocation of a professional baseball team from downtown Atlanta to a pre‐existing Community Improvement District (CID) in suburban Cobb County to estimate the impact of the stadium development on commercial property values. The existence of multiple CIDs in the metro‐Atlanta area provides the opportunity to estimate a counterfactual comparison absent the stadium to draw causal inference regarding the stadium's impact on economic activity using the synthetic control method. Estimates do not identify increased commercial property values from the stadium development, which is consistent with past studies that find little to no positive impact on economic activity.

On the Impact of Infrastructure Improvement on Real Estate Property Values: Evidence from a Quasi-natural Experiment in an Emerging Market

Prior studies show infrastructural improvements impact property values positively. The effect is often reflected soon after the announcement and continues until the project is complete. These studies, however, are primarily set in developed countries. Emerging markets pose unique risks where uncertainty around implementation and funding could dampen these positive effects significantly. We utilize a quasi-natural experiment around an inner-city road redesign and improvement project in Bangalore, the fastest growing city in India. We exploit the difference-in-difference regression approach to examine the project’s impact on residential and commercial property values around two sets of geographically proximate roads, one of which was chosen for the redesign. Unlike in developed countries, we find that property values are unaffected by the announcement when uncertainty is the highest but start reflecting the positive value of the infrastructure once construction starts and show significant gains upon completion. Our findings carry important policy implications for structuring value capture strategies in emerging markets.

Analyzing Indicators Affecting Commercial Property Value in Metro Station Accessible Area Using Walking Time Consumption: Case of Xi’an, China

In studies investigating the property value enhancements along metro lines, study ranges in most cases are measured in Euclidean distance. However, city roads are not always straight, and Euclidean distance sometimes does not equal to actual distance the passenger travels from the public transport station to their home or a commercial spot. To solve this problem, this study analyzed the indicators affecting commercial property value in metro station accessible area in Xi’an, using walking time consumption in measuring the study range. Following a conceptual framework, considering empirical evidences in related studies, information in city structure, and metro distribution, the initial indicator set is built. Using hedonic price model (HPM), spatial autoregressive model (SAR), and error term (SEM), significant indicators affecting commercial property value are investigated. In this study, 14 significant indicators are determined and quantified. Threshold distance equals to 900 m is found to be appropriate in addressing the autocorrelation problem with the weighted decision matrix tool. Compared to HPM and SEM, SAR is found to perform the best in evaluating the significant indicators with the largest R2 (0.415) and the lowest Akaike Info Criterion (AIC) (−395.214). Besides, it is discovered that the value of the commercial property lies in the study range of 20 min walking time and is obviously influenced by the metro station. The results discovered in this study could provide some empirical evidences to commercial property planning in Xi’an.

Impact of rail transit station proximity to commercial property prices: utilizing big data in urban real estate

Urban transport investments have contributed to the exponential increase of value from land and properties around the built infrastructure. Although literature had shown evidence of value uplift from the residential property due to transit development, little is known about the impact on commercial property values. This paper aims to evaluate the impact of rail transit proximity to the commercial property market by taking into account the pre-operation of the LRT project in Jakarta, Indonesia. This study utilizes a big data approach to accelerate research data processing by employing data mining method, as well as geographical information system (GIS) and hedonic price modeling (HPM) to investigate the property prices to formulate empirical evidence for the research. The results show opposite evidence compared to previous studies which argued that accessibility may contribute to the property price when closer to the transit station. The findings indicate that proximity to rail transit has an insignificant impact on the commercial property price compared to other variables such as building size, number of rooms, location, and hospitals. A comparison of the findings between this research with other studies was discussed and recommendation for further research development was proposed.

The Impact of Sports Stadiums on Localized Commercial Activity: Evidence from a Business Improvement District

Local government funding of sports stadiums is frequently justified as stimulating economic activity despite consensus contrary findings in the academic literature. Though some studies have identified positive neighborhood effects from stadiums on nearby residential property, scant research exists regarding impacts on highly-localized commercial activity that is hypothesized to spur further local economic development. This analysis exploits the recent relocation of a professional baseball team from downtown Atlanta to a pre-existing Georgia Business Improvement District (Community Improvement District or CID) in suburban Cobb County to estimate the impact of the stadium development on commercial property values. The existence of multiple CIDs in the metro-Atlanta area provides the opportunity to estimate a counterfactual comparison absent the stadium to draw causal inference regarding the stadium’s impact on economic activity using the synthetic control method. Estimates do not identify increased commercial property values in the district following the stadium opening, which is consistent with past studies that find little to no positive impact on economic activity. The results indicate that previous findings of positive impacts on residential property may not be applicable to commercial property.

Impact of urban regeneration on commercial property values in Osogbo, Osun State, Nigeria

Purpose The purpose of this paper is to assess the effect of urban regeneration and renewal activities initiated by the Osun State Government in Nigeria on the rental values of commercial properties in Osogbo, the state capital between 2008, before the urban renewal programme through 2017, after the urban renewal programme had been completed. Design/methodology/approach Primary data utilised for this study were collected from all the Estate Surveying and Valuation firms involved in the formal management of commercial properties in Osogbo, Osun-State, Nigeria. Information on the types of urban infrastructure renewed and rental values of 63 commercial properties from 2008 to 2017 were obtained from the sampled estate surveying and valuation firms practicing in the study area. Data were analysed using descriptive statistics, analysis of variance and Duncan post hoc test. Findings The findings showed that physical urban infrastructure such as roads, drainages, water supply and wastes disposal have been upgraded in the study area. Also, the study established that the urban regeneration programme had significant impact on the rental values of commercial properties in Osogbo, arising from the statistically significant difference (F(7, 600) = 22.264, p<0.000) between and within annual rental values of commercial properties in the study area. The annual rental values of the commercial properties also exhibited considerable variation based on the Duncan post hoc test. Practical implications The findings from this study indicate that urban regeneration programme by the Osun state Government has significantly increased the investment performance of commercial properties in the study area. Hence, while investors could achieve higher returns on investment by venturing into commercial property investment, revenue could also be generated for government through the collection of property taxes in the study area. Originality/value This study is one of the few studies that have analysed the effect of urban regeneration programme on commercial property values from the perspective of an emerging African economy, using data from Osun State, Nigeria.