Green Premium in the Tokyo Office Rent Market

More than 10 years have passed since studies on green buildings gained attention in the academic and industrial literature. Many studies report the economic value of green buildings, mainly in the U.S. and European markets. An empirical clarification of the dynamics of green premiums has significant implications for future urban sustainability. This study constructed a dataset of Tokyo office rents from 2009 to 2019. We estimated the green office rental premium using a hedonic approach. Our results show that, on average, an office property with a green label gains a premium of approximately 6.5% on contract rents. The Tokyo office market is heterogeneous, and endogeneity is an issue when identifying the green premium. We addressed the endogeneity issue with propensity score clustering. As a result of our estimation, the premium was approximately +5.4% for medium sized-old buildings and +2.6% for large-sized new buildings.

Stages of industrial heritage socialization in Moscow

Introduction. The actual tendency of creation of public architectural and spatial environments using industrial objects as foundation, which in this article is defined by the term “socialization”, is considered. The purpose of this paper is to identify and characterize the stages of socialization of Moscow’s industrial heritage (the process began in the mid-1990s). The systematization of accumulated experience in this field allows for the formulation of perspective integration models for territories of historical industrial development into urban surroundings. Materials and methods. 14 typical examples of renovation of historical industrial territories in Moscow were selected to be analyzed. Materials on the history of transfiguration of these areas have been systematized. Socioeconomic analysis of separate investigated objects and graph-analytical analysis of manifesting clustering of public spaces in historical industrial areas were conducted. Results. Three stages of socialization were identified on the basis of 14 examples: initial stage, focused stage and systematic stage. The stages correspond to the key dates of appearance of public spaces on the foundation of industrial heritage territorial formations. Dynamics of appearance of the public environment on industrial territories, from natural social develop-ment to the focused stage in which the principles of openness and public availability are set by a project, is noted. The third, systematic stage, which is focused on the preservation of historical industrial territories as a complex and involving the creation of a system of public spaces on the basis of conserving the historical industrial developments, is a promising direction for the creation of a unique urban environment. Conclusions. The defining role of the creation of public spaces in the process of industrial heritage renovation has been identified. The regular patterns of the location of the converted historical industrial areas relative to the center of Moscow are given, and the development areas, as well as real estate value within the boundaries of the areas under consideration (office rent and housing purchase) and on the adjacent territories are compared. The conclusion about social accessibility of territories is made, and the prospects of development of public spaces on the foundation of industrial heritage are outlined.

Lease structures and occupancy costs in eco-labeled buildings

Purpose The purpose of this paper is to investigate whether energy-efficient green buildings tend to provide net lease structures over gross lease ones. It then considers whether owners benefit by trading away operational savings in a net lease structure. Design/methodology/approach Empirical models of office leasing transactions in Sydney, Australia, with wider transferability supported by analysis of office rent data in the USA. Findings Labeled green buildings are approximately four to five times more likely than non-labeled buildings to use a net lease structure. However, despite receiving operational savings, tenants in net leases pay higher total occupancy costs (TOC), benefiting owners. On average, the increase in TOC paid by tenants in a net lease is equal to or greater than savings attributed to an eco-labeled building. Practical implications A full accounting of TOC in eco-labeled buildings suggests that net lease structures provide numerous benefits to owners that offset the loss of trading away operational savings. Originality/value The principal-agent market inefficiency, or “split incentive,” is a widely cited barrier to private investment in energy-efficient building technology. Here, a uniquely broad look at rental cash flows suggests its role as a barrier is exaggerated.

Local and global determinants of office rents in Istanbul

Purpose This paper presents a hedonic office rent model under the decentralized structure of Istanbul Office Market. The data set in the study includes 2,348 office spaces for the first quarter of 2018. This study aims to find determinants that affect the level of rent and examine whether the effects of office rent determinants are global or not. Design/methodology/approach To consider both global and local effects, the paper uses mixed geographically weighted regression approach in hedonic office rent analysis. Findings The empirical results indicate that office rent determinants such as physical, locational, neighborhood and market operational characteristics have significant impacts on the level of the rent. The findings also show that one of the office rent determinants has a global effect and the other determinants have local effects. According to the estimation results, local effects and statistical significances of these determinants vary from lower quartiles to upper quartiles. Originality/value To the best of the authors’ knowledge, this is the first paper to consider global and local effects of office rent determinants on the level of rent, with mixed geographically weighted regression approach. The paper provides new insights into the hedonic valuation of commercial real estates, especially for decentralized office markets.

Streetcars and Real Estate Rents with Implications for Transit and Land Use Planning

Modern streetcars seemed to have emerged as the darling of America’s downtown revival. Planners, however, have little experience with market responses to modern streetcars to help guide future efforts, or improve or expand current ones. This paper is the first to report the association between real estate rents and proximity to streetcar stations based on all streetcar systems launched in the U.S.A. since 1990. Using multiple functional forms, the paper shows that real estate rents for office, retail, and multifamily properties increase with proximity to streetcar stations. The analysis further tests outcomes using five functional forms: linear, semi-log, double-log, quadratic and fine-grained distance band (using one-eighth mile increments). It appears that the distance band functional form specification may be the most useful for transit and land use planning purposes. Results suggest that streetcar planning and associated land use planning should anticipate heightened demand for multifamily residential development near streetcar stations, perhaps displacing office development to about half a mile away. Retail activities may benefit from additional level of competition for location near streetcar stations by both residential and office development. Indeed, analysis finds that whereas multifamily residential rent premiums with respect to streetcar station proximity extend a mile outward, office rent premiums are lower closer to stations but rise rapidly about a half mile away, presumably outbidding multifamily residential development. Retail activities take advantage of this competition roughly to the area between the office and multifamily rent premium thresholds. Implications for fixed guideway transit and land use planning practice are offered.