Implicit forward rents as predictors of future rents
2004 (English)In: Real estate economics (Print), ISSN 1080-8620, E-ISSN 1540-6229, Vol. 32, no 2, 183-215 p.Article in journal (Refereed) Published
This paper investigates the relation between the term structure of rents and future spot rents. A rich database of office rental agreements for various maturities is used to estimate the term structure of rents, and from this structure implicit forward rents are extracted. The data pertain to commercial properties in the three largest Swedish cities for the period 1998-2002. A positive relation between forward and spot rents is found in some regions, but forward rents underestimate future rent levels. Another contribution of the paper lies in the area of rental index construction. We provide evidence that rental indices should not only be quality constant (i.e., control for characteristics), but should also be maturity constant.
Place, publisher, year, edition, pages
2004. Vol. 32, no 2, 183-215 p.
office rent, chicago cbd, contracts, rates
Economics and Business
IdentifiersURN: urn:nbn:se:kth:diva-23455DOI: 10.1111/j.1080-8620.2004.00089.xISI: 000221701100002ScopusID: 2-s2.0-3042573603OAI: oai:DiVA.org:kth-23455DiVA: diva2:342153
QC 20100525 QC 201110202010-08-102010-08-102011-10-27Bibliographically approved