Price Adjustment Process for Rental Office Space
Shilling, James D.; Sirmans, C. F.; Corgel, John B.
This paper analyzes the price adjustment process for rental office space in 17 cities across the United States over the time period 1960 to 1975. The results confirm much of what economic theory suggests. Landlords react to fluctuations in demand by building up or drawing down inventories of unlet or vacant office space. Other things equal, higher levels of vacant office space mean that landlords lower their rents and reduce the difference between desired and actual vacancies. Empirical evidence is also presented on the normal vacancy rate across different cities.
commercial office space; vacancy rates; Durbin-Watson statistic
Required Publisher Statement: © Elsevier. Final version published as: Shilling, J. D., Sirmans, C. F., & Corgel, J. B. (1987). Price adjustment process for rental office space. Journal of Urban Economics, 22, 90-100. doi:10.1016/0094-1190(87)90051-9Reprinted with permission. All rights reserved.