Office Real Estate Research Articles

The heterogeneous response of real estate prices during the Covid-19 pandemic

Abstract We estimate the transmission of the pandemic shock in 2020 to the residential and commercial real estate market by causal machine learning, using granular data for Germany. We exploit differences in the incidence of Covid infections and short-time work at the municipal level for the identification of epidemiological and economic effects of the pandemic. We find that (i) a larger incidence of Covid infections temporarily reduced rents for retail real estate; (ii) a larger incidence of short-time work temporarily reduced rents of office real estate; (iii) the pandemic increased prices, particularly in the top price segment of commercial real estate.

MARKETING INTUITION AND ITS REFLECTION ON FOMO MARKETING: AN EXPLORATORY STUDY OF THE OPINIONS OF A SAMPLE OF WORKERS IN A NUMBER OF REAL ESTATE OFFICES IN THE CITY OF MOSUL

The current research aims to clarify the relationship between marketing intuition as an independent variable and FOMO marketing as a dependent variable after the tremendous developments that occurred in the business environment and the crowding of markets with various organizations and products and the increasing intensity of competition between them to achieve profits, this prompted business organizations to try to anticipate the needs and desires of the customer to work on satisfying them through marketing intuition, in addition to their attempt to arouse feelings of fear in the customer of losing his opportunity to buy their products through FOMO marketing. To determine the relationship between these two variables statistically and at the overall level, the descriptive analytical approach and the questionnaire were used as the main tool to collect data from the research sample, which is represented by workers in a number of real estate offices in the city of Mosul. 60 questionnaires were distributed to workers in those offices with a response rate of 100%. The research concluded with a set of conclusions, the most important of which is that there is a significant effect of marketing intuition in FOMO marketing, in addition to a set of proposals, including the necessity of introducing workers to technical courses to better deal with customer data analysis, which will be reflected in a better understanding of their future needs and desires.

The spatial interlocking of commercial office real estate and advanced producer services: a central flow theory lens

ABSTRACT The paper extends geographical enquiry into the external urban relations described by central flow theory in an exploration of the roles of commercial office real estate (CORE) and advanced producer services (APS) as a conduit for inter-city flows of finance in corporate globalization. The analysis investigates and benchmarks the spatial overlap between these city-based service networks and uses this to consider how their respective servicing strategies influence international capital flows. We find that the networks are interlocked, as the connectivity in one network can significantly explain the connectivity in the other. Both CORE and APS services promote cross-border flows of finance. Cities providing multinational CORE and APS services are able to articulate direct as well as indirect inter-city capital flows and spillovers to non-service sectors.

The Impact of the Flight to Quality on Office Rents and Vacancy Rates in Tokyo

Abstract With the rapid spread of telecommuting since the COVID-19 pandemic, companies have been relocating to high-end business centers, thereby enhancing the workplace experience for employees, a phenomenon called the "flight to quality." However, this trend’s impact on rents and vacancy rates in individual office buildings has not been extensively studied. To determine the effects of the flight-to-quality phenomenon on individual buildings, we examine the impact of modern amenities, which directly influence employee lifestyles, on rents and vacancy rates in the Tokyo office market. Using a propensity score-based quasi-experimental method, we find that commercial properties with such modern amenities command higher rents and experience lower vacancy rates than those without. The difference in vacancy rates has increased since 2020. However, the significance of these amenities diminishes for properties less competitive in age, size, and location. The results indicate that the "flight to quality" may further polarize the office real estate market into two categories: one for high-end buildings experiencing increasing demand, and another for those with modest amenities experiencing decreasing demand. The findings have implications for office building owners/investors and the government, make educated decisions as to whether to invest in modern amenities, join the quality competition, or encourage urban restructuring.

Анализ современных тенденций развития рынка офисной недвижимости Москвы

целью исследования настоящей статьи выступает проведение анализа современных тенденций развития рынка офисной недвижимости Москвы. Задачи заключаются в исследовании особенностей рынка офисной недвижимости Москвы в текущий период, изучении объемов спроса и предложения на офисную недвижимость, размеров арендных ставок, объемов строительства офисных площадей и оценки современных трендов развития столичного рынка офисной недвижимости в контексте конкурентоспособности и успешности собственников и управляющих компаний. В процессе проведения исследования использовались методы аналитического и логического анализа, метод статистическо-экономического анализа, графический метод. По итогам проведения анализа основных современных тенденций на рынке офисной недвижимости Москвы сделан вывод, что формирование спроса в 2024 году будет исходить со стороны крупных компаний государственного сектора и крупных корпоративных бизнес-структур, при этом преобладать будут сделки, нацеленные на приобретение офисных помещений в собственность, и спрос превысит предложение в премиальной локации. Дефицит офисных помещений будет способствовать развитию строительства бизнес-центров и росту арендных ставок, при этом сохранится зависимость рынка от макроэкономических показателей. Девелоперские компании будут тестировать новые форматы многофункциональных центров. Офисный рынок недвижимости Москвы вступил в фазу активного восстановления. Практическая значимость результатов исследования заключается в возможности их применения при прогнозировании развития современных тенденций рынка офисной недвижимости Москвы. the purpose of this article is to analyze modern trends in the development of the Moscow office real estate market. The objectives are to investigate the peculiarities of the Moscow office real estate market in the current period, to study the volume of supply and demand for office real estate, the size of rental rates, the volume of construction of office space and to assess the current trends in the development of the Moscow office real estate market in the context of competitiveness and success of owners and management companies. In the course of the research we used methods of analytical and logical analysis, statistical and economic analysis, and graphical method. Based on the results of the analysis of the main current trends in the Moscow office real estate market, it was concluded that the demand formation in 2024 will come from large public sector companies and large corporate business structures, with the predominance of transactions aimed at acquiring office premises for ownership, and demand will exceed supply in premium locations. The shortage of office space will contribute to the development of business centers construction and growth of rental rates, while the market will remain dependent on macroeconomic indicators. Development companies will test new formats of multifunctional centers. The Moscow real estate office market has entered the phase of active recovery. The practical significance of the research results lies in the possibility of their application in forecasting the development of current trends in the office real estate market in Moscow.

Тенденции развития столичного рынка офисной недвижимости в современных условиях

The article analyzes the state of the Moscow office real estate market during the crisis periods. The aim of the study is to consider how the real estate market changes under conditions of uncertainty. The objectives are to analyze the impact of crisis situations on demand, supply, as well as to assess the correlation of these indica-tors with the general economic environment. Research methods used in the article are comparative analysis, statistical methods. The study revealed patterns in changes in the volume of demand for office real estate dur-ing a period of high economic turbulence. At the same time, it is noted that the volume of supply at the moment is not growing significantly as interest increases after the peak crisis stages due to the long period of construc-tion of a new facility and the rise in the cost of project financing, conceived in connection with bank lending. The practical significance of the research results lies in the possibility of applicable in forecasting the market situa-tion, using the extrapolation method.

Potencijal poljoprivrednog zemljišta prema katastarskom klasiranju na prostoru prirodnog dobra u postupku zaštite Predela izuzetnih odlika "Planina Rudnik"

During 2023, the Institute for Nature Conservation of Serbia submitted a proposal and an act on the designation of a protected area, the Outstanding Natural Landscape Rudnik Mountain, to the Ministry of Environmental Protection. 33.70% of agricultural land, which is recognized as a resource of economic development potential, is included within the boundaries of the proposed protected area. Based on information obtained from the Republic Geodetic Office's Real Estate Cadastre, an analysis of the cadastral classification of land by cadastral municipalities was conducted to determine the potential for success of this rural region with regard to agricultural activities. The cadastral classification of agricultural land is based on natural production conditions and follows the morphological, physical, chemical, biological and paedological-geological characteristics of the soil of the Rudnik Mountain, as well as the dynamics of the area: relief, altitude, inclination of the terrain, slope aspect, erosional processes and other conditions aligned with the Rulebook on land cadastral classification. The results of this analysis set the basis for future activities to improve the situation regarding the use and possible protection of agricultural land within ONL Rudnik Mountain.

The pitfalls of a post-COVID-19 portfolio consolidation

The profound changes in the commercial real estate market brought about by the COVID-19 pandemic, including the widespread adoption of remote and flexible work arrangements, have significantly altered the utilisation of commercial office real estate. This paper outlines common pitfalls organisations may encounter when contemplating real estate portfolio consolidation due to these changes. It highlights the financial costs associated with reducing office space, while addressing the reputational cost of such decisions. The continually shifting landscape related to hybrid work policies is also explored, along with issues such as employee pushback, over-cutting space, timing issues, employee dissatisfaction and economic viability. To aid organisations in decision making, the paper suggests key metrics and data points for assessment, including headcount analysis, telework policies, badge analysis, sensor implementation, workplace observation, demand studies and pilot programmes. Ultimately, the paper underscores the importance of data-driven decision making while considering the holistic needs and preferences of employees. It acknowledges the challenges and uncertainties in the post-COVID-19 real estate market and provides a comprehensive checklist for organisations to consider prior to consolidating their real estate portfolios, and guidance for planning such consolidations effectively.

The Impact of COVID-19 on the Real Estate Market Based on Case and Data Analysis

In the previous two years, COVID-19 has been one of the pressing social issues, and empirical studies have shown that COVID-19 has a significant impact on the growth of the economy. However, more research and an analysis of the effects of COVID-19 on the global real estate market may be required. In order to better explore the effects of COVID-19 on the real estate market and the changes it has brought about, this study analyzes the real estate markets in China, the United States, and Europe together with pertinent real estate market statistics. According to the analysis, COVID-19 has caused a reduction in some office real estate deals, a rise in the market for luxury homes, a shift in consumer preferences from renting to buying. In addition, a significant uptick in the adoption of cutting-edge digital technologies by service providers. Therefore, it is advised that the real estate market performs sound market research, records changes in consumer demand, and promptly modifies its business plans. These results shed light on guiding further exploration of the impact of COVID-19 on the real estate market in the study area and the resulting changes.

Platform Firms, Commercial Real Estate Cycles and San Francisco’s Growth as a Tech Cluster, 2008–2020

Between the Great Recession and the COVID-19 pandemic, the U.S. technology industry increasingly shifted toward cities. Local governments pursuing innovation-led growth encouraged this shift, as exemplified by San Francisco, the spatial and symbolic urban home of the global technology industry. The commercial real estate market is central to understanding the city’s growth as a tech cluster between 2008 and 2020. Platform technology firms substantially contributed to employment growth and demand for office real estate in San Francisco during this period of rapid tech industry expansion. The city also exemplifies how the pandemic-led transition to remote work has profoundly changed the relationship between platform firms and urban space. In this article, we use interviews and secondary sources to study tech-led office leasing and development activity in San Francisco. We identify neighborhood-level trajectories of path dependence, industrial conversion, failed revitalization, and frontier-making during the period of growth leading up to 2020. Digital platform companies exert significant economic and political influence over cities, but their control over urban space is also constrained by the historical, material, and economic realities of commercial real estate.

التغير في أسعار الأراضي وبدلات الإيجار في مدينة هيت مورفولوجياً

The research aims to analyze the morphological change in land prices and rent allowances in the city of Hit, and the reason for this discrepancy in the city of Hit, and its municipal boundaries consisting of (18) neighborhoods, and to shed light on the prices and rents of land and to know the extent of the impact of commercial speculation in it, and then indicate the impact of these prices on the uses of land. The land in the city, as there is a large variation in the prices and rents of land during the urban stages that the city has gone through and between the parts of the city of Hit. The research relied mainly on the field study in the process of obtaining information and data, as well as a number of library sources and data from government departments related to this subject, in addition to personal interviews with owners of real estate offices in the study area.

The use of comparative market coefficients to measure office property market and fair values: Some special aspects

Subject. This article deals with the issues of assessing the market value of office real estate. Objectives. The article aims to substantiate the need to use special calculated values of multipliers differentiated by the main cost factors. Methods. The study is based on the verification of the considered methods of valuation of office real estate on the basis of pair and multiple regression methods, as well as the theoretical and methodological aspects of assessing the value of office real estate, in particular, on the application of the gross rent multiplier (GRM) method. We also used general scientific methods of cognition, empirical and economic analysis methods, methods of scientific abstraction, comparison, classification, generalization, grouping, and graphic analysis. Results. The article identifies the main factors in determining the value of office real estate, analyzes the values of the office real estate objects’ value by published multipliers and various calculated types of multipliers, and also it compares the values obtained. It focuses on the fact that the value of office real estate obtained on the basis of published values of gross rent multipliers, is underestimated. The article also justifies the need to use multipliers that are more detailed in terms of cost factors.

Post-COVID-19 Real Estate Net Absorption and Social Capital in U.S. Metropolitan Areas

The authors of this article studied the differential impact of the COVID-19 pandemic on the performance of office real estate markets using a sample of major U.S. metropolitan areas. During the pandemic, social capital became a significant determinant of net absorption and mitigated the decline in net absorption due to the impact of COVID-19. They found that social capital in U.S. metropolitan areas as measured by the density of social networks has a significant positive effect on net absorption in a post-COVID-19 period. The results suggest that social capital contributes to an increase in net absorption values by promoting trust and communication among members of a community, which increases the likelihood of a completed transaction resulting in more leasing contracts.

COVID-19 and the Principles of Economics

Several fundamental principles in economics help enhance our understanding of COVID-19, including opacity and externalities. COVID-19 is a contagious disease whose spread has been difficult to manage due to opacity, as the disease is contagious prior to the presence of symptoms and in some instances testing results for the disease require a considerable time lag before they become available. This highlights the importance of alternative testing strategies to limit the extent of opacity and to manage the costs associated with accurate testing. In addition to individual tests, such strategies would include testing employees in small groups and testing for concentration of the disease in wastewater. Diminishing returns to scale, depreciation, and shocks to the underlying disease also all play an important role in understanding the effectiveness of vaccines. Externalities are central to the mechanism for transmitting contagious diseases. The strength of the externality can be reduced potentially by various preventive measures such as social distancing and masking, though quantitative studies of the efficacy of such measures can be enhanced. Further, efforts to undertake randomized trial studies of various questions related to vaccines and prevention would be helpful, especially in light of the magnitude of economic costs that have been imposed by contagious disease, such as COVID-19. COVID-19 and other contagious diseases also have had considerable effects on the structure of the economy. This has resulted in great development of technologies to support online meetings and work and the ability to work remotely, which in turn highlights dramatic challenges to the five-day work week, the potential for stay-at-home work, the relationship between residential and office real estate and the value of contractual flexibility in the face of dramatic shocks. Some of the effects arise during the period of acute societal disease, while other aspects reflect long-term learning. The nature of societal shocks to work and income generation also has led to important questions regarding the use of societal resources and potential shocks to the overall macroeconomy.

Impact of Real Estate Environment on Knowledge Worker Performance in IT Companies: Evidence from Sri Lanka

Knowledge worker performance is becoming an increasingly important requirement in information technology (IT) firms for its competitiveness. Although employee performance is an extensively researched area, the impact of the real estate environment of office on the performance of employees is still unexploited. The impact of the physical and social workplace on cognition and knowledge sharing by the knowledge worker and its impact on the knowledge worker's performance are hardly discussed in the literature. In this context, this study aims to investigate the relationship between the physical and social workspace setting on the knowledge worker performances in the Information Technology (IT) industry in Sri Lanka. The outcome of the study provides insight to top management of IT companies to confirm how attributes of office real estate environment contributes to knowledge worker performance. The study applied a quantitative approach to explore the impact of the physical and social workspace on the performance of knowledge workers. The study employed a convenience sampling method for collecting data from 185 respondents who worked in IT industry using a self-administered questionnaire. Partial Least Squares Structural Equation Model (PLS –SEM) was used to analyze the data. The findings of the study confirmed that physical workspace support cognitive work and knowledge sharing of a knowledge worker. Physical workspace characteristics have the strongest impact on knowledge sharing than the cognitive work of the knowledge employee. In addition, the analysis confirmed that cognitive work also supports knowledge worker performance. Thus, findings suggest that a review of the physical workspace of the IT organization is an important strategic decision to ensure higher order performance of the IT employees. In summary, the study argued that the physical workspace of the organization seems to play a pivotal role in ensuring the higher performance of the employee via cognition. Thus, this paper contributes to IT company management to think out of the box to ensure an improved physical workspace for better employee performance.

Impact of Forest Landscape on the Price of Development Plots in the Otwock Region, Poland

Building plots, understood as land properties intended for development, are an important object of commercial transactions. Their prices are determined by several factors, such as location, state of development, distance from important urban centres, and proximity to green areas. It is certain that, especially with regard to building plots intended for single-family housing, the proximity of natural areas, especially forest areas, is becoming increasingly important. The Otwock region, with a forest cover of more than 30%, has numerous undeveloped lands that are or could be development plots. This article concerns an analysis of transactions involving undeveloped development land of selected communes in the Otwock region. On the basis of an analysis of prices of real estate transactions from 2011 to 2016 from four municipalities of the Otwock region and a spatial visualisation of the plots, the relationship of price (m2) with physical characteristics (technical development, shape, area), distance from a large city (Warsaw), and distance from a railroad line stop and landscape values (landscape type, distance to the forest, number of landscape components) was determined. Statistical analyses used regression and correlation analysis. The preferences of 519 people interested in buying/selling real estate in the Otwock region were also investigated, and for this purpose, we cooperated with real estate offices and municipal offices. The results of the survey strongly indicate that forest landscapes increase the attractiveness of building plots, which in turn leads to higher prices on the market. The results of the study show that there is a relationship between the price of a property and its distance to the forest, the nature of the forest boundary, and the number of landscape elements. The forest landscape is one of the most important factors determining the attractiveness of a building plot. Proximity to a forest, especially forests under a form of protection, is an important value for prospective land plot buyers. The views of respondents varied considerably due to socio-demographic characteristics, mainly the age and education of respondents.

An analysis of the determinants of office real estate price modelling in Nigeria: using a Delphi approach

PurposeThere are a plethora of putative influencing variables available in the literature for modelling real estate prices using AI. Their choice tends to differ from one researcher to the other, consequently leading to subjectivity in the selection process. Thus, there is a need to seek the viewpoint of practitioners on the applicability and level of significance of these academically established variables.Design/methodology/approachUsing the Delphi technique, this study collated and structured the 35 underlying micro- and macroeconomic parameters derived from literature and eight variables suggested by 11 selected real estate experts. The experts ranked these variables in order of influence using a seven-point Likert scale with a reasonable consensus during the fourth round (Kendall's W = 0.7418).FindingsThe study discovered that 16 variables are very influential with seven being extremely influential. These extremely influential variables include flexibility, adaptability of design, accessibility to the building, the size of office spaces, quality of construction, state of repairs, expected capital growth and proximity to volatile areas.Practical implicationsThe results of this study improve the quality of data available to valuers towards a fortified price prediction for investors, and thereby, restoring the valuers' credibility and integrity.Originality/valueThe “volatility level of an area”, which was revealed as a distinct factor in the survey is used to add to current knowledge concerning office price. Hence, this study offers real estate practitioners and researchers valuable knowledge on the critical variables that must be considered in AI-based price modelling.

SPATIAL ORGANISATION OF KYIV’S OFFICE BUILDINGS

Problem statement and purpose. During the post-socialist period Kyiv began to demonstrate itself not only as an industrial centre, but also as a business centre, which had contributed to the dynamic development of the office real estate. During the second half of the 1990s, most of the offices were concentrated in the Central Business District, and after the financial crisis of 2008, the emphasis in office construction had shifted to the middle and peripheral areas of the city. These shifts were caused by the lack of suitable areas for the office construction, compact building design, high land cost, transport problems, the lack of opportunity to create the ap propriate infrastructure for new construction or reconstruction in the capital central part. That’s why the industrial areas of the middle and peripheral city zones with abandoned industrial enterprises are especially important for the study of expediencyof their usage in the modern economic realities not only for creating innovative industrial enterprises, but also for business centres, office centres and business units. The purpose of the study is to find out the patterns of the office real estate spatial organisation in the large city. Data & Methods. The information base of the research is the statistical data of the Main Department of Statistics in Kyiv, analytical materials of the commercial real estate agency Colliers International, the consulting company Ukrainian Trade Guild and field research results. During the research such methods as field research, historical-geographical, comparative-geographical, statistical, cartographic, GIS‑technologies were used. Results. The transformation of Kyiv’s urban space in the period of post-socialist transformations is accompanied by significant changes in the urban space structure. The significant concentration of business centres and office centres is observed in the city central part, which is mainly the result of a new construction, which has affected the planning structure and architectural heritage in a bad way. The transformation have occurred in the industrial areas, where as a result of deindustrialization the share of construction under industrial enterprises have declined and under commercial buildings continues to increase. Mostly such industrial areas are located near the important highways and the subway lines. It is proved that the peripheral areas, which are located near the main transport arteries, have a significant potential for the construction of business centres and office centres. Taken into account the negative processes observed in the city central part, the interests of investors should be focused on creating areas specialised in the business services within degraded industrial areas in distant city zones, which is the strategic interests of the large city spatial development.

Work From Home and the Office Real Estate Apocalypse

Work From Home and the Office Real Estate Apocalypse

Agglomeration Economies and Capitalization Rates: Evidence from the Dutch Real Estate Office Market

Agglomerations of economic activity result in higher rents for users. However, these benefits do not necessarily carry over to real estate investors because higher rents might also come with higher investment amounts and risks. We address this by testing whether the effects of agglomeration economies, as observed in office rents, carry over to capitalization rates as a theoretically more refined measurement of productivity externalities. Using transaction-based data for the period 1996-2011 in the Netherlands, we show that agglomeration economies result in capitalization rates that are 4.6 percent, or 40 basis points, lower.