Premium
National Vacancy Rates and the Persistence of Shocks in U.S. Office Markets
Author(s) -
Voith Richard,
Crone Theodore
Publication year - 1988
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/1540-6229.00467
Subject(s) - disequilibrium , vacancy defect , persistence (discontinuity) , economics , central business district , variance (accounting) , econometrics , condensed matter physics , physics , engineering , accounting , medicine , geotechnical engineering , transport engineering , ophthalmology
In this paper, we develop and estimate a model that decomposes the variance in office vacancy rates into market‐specific, time‐specific, and random components. The results indicate significant differences in natural vacancy rates across markets. We also find some persistence in deviations from these natural vacancy rates. The analysis is applied to both central business district (CBD) and suburban office markets. We find that natural vacancy rates differ across CBD markets and across suburban markets. Further, the persistence of disequilibrium in one CBD market seems to differ significantly from that in another. This is not shown to be true for suburban markets.